Inflation Preview: A little more pressure

Inflation is anticipated to speed up in November on the back of typhoon-related supply shocks, although rice deflation will keep it below the Bangko Sentral ng Pilipinas’ (BSP) target.

Metrobank forecasts last month’s headline inflation at 1.8% year-on-year, slightly faster than the October number.

Waiting to stabilize

Rice deflation persisted in November, though at a slower pace than the month prior. In late October, the current rice import ban was extended by President Ferdinand Marcos Jr. until year-end. Though rice importation will restart temporarily in January 2026, an adjustable tariff based on international price movements will be applied, with rates ranging from 15% to 35%.

As local rice prices have yet to stabilize to a favorable level, rice is expected to provide downward pressure to November’s inflation rate.

Weathering storms

Other food commodities, meanwhile, will provide upward pressure to headline inflation in November.

Relative to the same month last year, we saw higher prices of fruits, vegetables, and fish as adverse weather conditions hounded the agriculture and fisheries sectors. Based on preliminary estimates by the Department of Agriculture, Typhoons Tino and Uwan caused approximately PHP 5.2 billion in agricultural damage in November. This led to higher prices in said commodities compared to the preceding month and in November last year.

Meanwhile, meat prices, particularly pork and chicken, continued to drop month-on-month, as hog and poultry production continued to improve. However, prices remain relatively higher compared to November last year.

Energy’s upside risk

Following recent price hikes, gasoline and diesel pump prices are finally approaching last year’s price level.

Similarly, electricity rates were also higher year-on-year in November after the nation’s three major power distributors increased their rates from last month due to higher transmission costs. Given these, energy rates continue to be sources of upward pressure on headline inflation.

Metrobank’s take

We expect food and energy prices to remain the major contributors to inflation in November, driven by storm-slicked price pressure and higher power transmission charges. However, lower prices of rice year-on-year will continue to pose downside risks to inflation. Metrobank expects headline inflation to remain below the BSP’s 2%-4% target in November.

(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.) 

MARIA KAILA BALITE is a Research Officer of the Research and Market Strategy Department, Institutional Investors Coverage Division, Financial Markets Sector, at Metrobank. She holds a Master’s degree in Applied Economics and also majored in Financial Economics for her Bachelor’s degree, both from De La Salle University Manila. Outside of work, she enjoys watching thriller movies and K-dramas.


JOAQUIM PANTANOSAS is a Research Officer of the Research and Market Strategy Department, Institutional Investors Coverage Division, Financial Markets Sector, at Metrobank. He holds a BS in Statistics from the University of the Philippines-Diliman, where he developed an interest in quantitative research as a tool for complex problem-solving. He enjoys a good laugh with the people he cares about.