Annual headline inflation may accelerate further in April after hitting its fastest pace since 2024 in the preceding month.
Despite recent peace talks and an ongoing ceasefire between Iran and the US, the global oil crisis persists and continues to weigh on the domestic economy.
Metrobank forecasts headline inflation at 5.6% in April.
The Philippines imports nearly all its oil requirements. As global oil prices were volatile this month given the unpredictability of the US-Iran conflict, oil continued to be the main driver of inflation in April.
Domestically, pump prices remained elevated year-on-year, even with the government’s suspension of fuel excise taxes, and price rollbacks for diesel and gasoline later in April.
Electricity rates were also costlier year-on-year for customers of Manila Electric Company, Davao Light and Power Company, and Visayan Electric Company.
Stock inventory of rice remains higher year-on-year after favorable weather conditions in 2025. However, retail prices of rice continue to accelerate amid high production costs in the domestic space, as well as high shipping and logistics costs for imported rice.
Related article: More than oil: The US-Iran conflict’s cost for the Philippines
Metrobank sees sustained inflationary pressure from rice in April, as the global oil crisis persists, putting a strain on production and fanning shipping costs for the staple grain.
With how critical oil and fuel are to food production, oil inflation likely impacted food prices as well.
Preliminary data from the Philippine Statistics Authority suggests that price rise accelerated for vegetables and fruits. Moreover, Metrobank expects meat to enter positive inflation in April after two months of year-on-year price declines, as high oil prices begin to outweigh improved supply for meat products.
Metrobank anticipates that headline inflation will remain elevated at 5.6% in April, as the global oil crisis persists and continues to adversely impact domestic prices.
The Bangko Sentral ng Pilipinas already hiked their policy interest rate on April 23 to address rising inflation, which they forecast to average at 6.3% in 2025. Metrobank projects at least one more rate increase before the year ends.
A combination of faster inflation and interest rate hikes will likely push bond yields upward in the near-term, especially for longer tenors. More expensive imports will also put the peso on the backfoot and keep USD/PHP elevated above the 60-level.
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.
