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Philippine inflation may have slightly accelerated in October amid elevated prices of food, fuel and electricity as well as a weak peso, analysts said.

A BusinessWorld poll of 17 analysts yielded a median estimate of 1.8% for the consumer price index in October. If realized, October inflation would have slightly picked up from the 1.7% clip in September but slowed from the 2.3% seen in the same month last year.

The median estimate also falls within the Bangko Sentral ng Pilipinas’ (BSP) 1.4-2.2% forecast for October.

It may also be the fastest clip in eight months or since the 2.1% in February and would match the 1.8% in March.

October could likewise mark the eighth month in a row that inflation undershot the BSP’s 2-4% target.

The Philippine Statistics Authority is set to release the October inflation data on Nov. 5.

Aris D. Dacanay, economist for the Association of Southeast Asian Nations at HSBC Global Investment Research, said inflation likely settled at 1.8% in October as prices of vegetables rose following typhoons.

“Electricity prices also increased as the depreciation of the peso over the US dollar led to higher generation charges,” he added.

The Manila Electric Co. hiked the overall electricity rate by PHP 0.2331 per kilowatt-hour (kWh) to PHP 13.3182 per kWh in October. 

Moody’s Analytics economist Sarah Tan said increased transport and fuel prices may have also contributed to faster inflation in October.

“Higher transport and fuel costs, together with weather-related disruptions affecting some food items, are putting mild upward pressure on prices,” she said in an e-mail.

In October, pump price adjustments stood at a net increase of PHP 1.80 a liter for gasoline, PHP 2.10 per liter for diesel and PHP 1.10 per liter for kerosene.

“Fuel prices also remained stable; global oil prices cooled in October, offsetting any inflationary impact brought by a weaker peso,” Mr. Dacanay said.

In October, the peso performed weaker against the greenback at PHP 58.850 per dollar, slipping by 65.4 centavos from its PHP 58.196 finish at end-September. The peso also hit a new all-time low of PHP 59.13 versus the greenback on Oct. 28.

“Downside price pressures also persisted (in October), the biggest coolant being rice. The price of regular milled rice in Metro Manila remained stable at PHP 39.4 a kilogram despite the ongoing import ban on the grain,” Mr. Dacanay said.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said lower prices of meat, fruit and oil could have also prevented further acceleration of inflation.

“Going forward, upside risks to inflation are building as favorable rice base effects fade and the extension of the rice import suspension through yearend adds further pressure,” Mr. Neri said.

President Ferdinand R. Marcos, Jr. had earlier ordered a 60-day suspension of rice imports starting Sept. 1 to support Filipino farmers during harvest season and to stabilize rice prices.

The suspension was originally supposed to end on Nov. 2 but is now expected to be extended until end-2025. The ban applies only to imports of regular milled and well-milled rice.

Sticky core inflation

Meanwhile, core inflation is expected to remain “sticky,” analysts said.

“That is partly driven by firm inflation expectations and recent wage increases. Further, the peso has weakened broadly since June, feeding through to services and other core components as firms adjust prices to reflect higher costs,” Ms. Tan said.

Core inflation, which excludes volatile prices of food and fuel, slowed to 2.6% in September from 2.7% in August. It averaged 2.4% in the nine-month period, easing from 3.1% in the same period a year ago.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in an e-mail that he expects core inflation to remain near that level in October.

“This stickiness suggests underlying demand-side pressures and second-round effects (e.g., wage adjustments, service costs) are persisting despite low headline inflation. It signals that disinflation is largely driven by volatile items, while structural price components remain firm,” Mr. Asuncion said.

Security Bank Chief Economist Angelo B. Taningco said in an e-mail that core inflation will likely remain elevated in the coming months amid holiday-driven spending.

Meanwhile, Maybank Investment Bank economist Azril Rosli said core inflation may settle between 2.5% and 3% until December.

“(This is due to) holiday season labor market tightening, annual rent adjustment cycles incorporating (year-to-date) inflation expectations, utility cost pass-through to business operating expenses, school year 2025-2026 tuition adjustments continuing to flow through, healthcare cost pressures from pharmaceutical imports affected by peso weakness, and the BSP’s expected continuation of supportive monetary policy,” he said in an e-mailed note.

Below 2% inflation

Despite emerging risks, analysts still expect full-year inflation to settle below the 2-4% target band of the central bank.

“Looking ahead, inflation is expected to remain manageable, averaging below the BSP’s 2-4% target this year and hovering around the midpoint of the target range next year,” Chinabank Research said in an e-mail.

If the 1.8% median estimate materializes, headline inflation would average 1.7% in the 10-month period, matching the BSP’s goal for the year.

For 2026, the central bank sees inflation accelerating to 3.1%, before slowing to 2.8% in 2027.

“Even with slight upticks in Q4, full-year inflation will likely stay below the BSP’s 2-4% target range, thanks to benign global commodity prices, improved domestic food supply, and policy support and subdued demand conditions,” Mr. Asuncion said.

This expectation gives the central bank room to continue its accommodative monetary policy until yearend and potentially in 2026, analysts said.

“We don’t expect the central bank to deviate much from their planned monetary policy easing path, especially if economic growth remains muted,” Reinielle Matt M. Erece, economist at Oikonomia Advisory & Research, Inc., said in a Viber message.

Last month the Monetary Board cut its benchmark policy rate by 25 basis points (bps) to 4.75%, the lowest in over three years. This brought its cumulative reductions to 175 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. has penciled in another 25-bp cut at the Monetary Board’s last meeting this year on Dec. 11 and potentially more in 2026 as they seek to support the economy amid weak business sentiment due to the flood control scandal.

“Looking beyond December, the BSP could still deliver up to two additional cuts in 1H 2026 if growth continues to run below potential,” BPI’s Mr. Neri said. “The central bank may also align its policy path with that of the Federal Reserve, particularly if markets begin to price in aggressive US rate cuts after Chairman Powell’s term ends in May 2026.”

Last week, the Fed delivered its second 25-bp cut this year, bringing its interest rate to the 3.75-4% range. This brought its cumulative cuts since September 2024 to 150 bps.

However, Fed Chair Jerome H. Powell signaled a pause at their next rate-setting meeting this year, citing risks from the unavailability of economic data due to the ongoing US government shutdown. — Katherine K. Chan

Government underspending in the third quarter, mainly due to a corruption crackdown that curbed public disbursements, is expected to temporarily dent economic growth this year, Finance Secretary Ralph G. Recto said.

“This (underspending in the third quarter) is expected to temporarily weigh on government final consumption expenditure and the overall GDP (gross domestic product) growth,” he told BusinessWorld in a Viber message on Oct. 31.

The Marcos administration only disbursed PHP 1.46 trillion in the third quarter, data from the Bureau of the Treasury showed, PHP 141.73 billion less than its PHP 1.6-trillion program for the period. This is mainly due to lower spending by the Department of Public Works and Highways, which is at the center of a corruption scandal involving flood control projects.

“Nevertheless, the government’s swift and decisive action following the recent flood control controversy marks the beginning of a major government cleanup that will lead to stronger institutions, better governance, and faster growth in the medium term,” Mr. Recto said.

President Ferdinand R. Marcos, Jr. had flagged anomalous flood control projects during his State of the Nation Address in late July. This sparked several investigations into alleged corruption involving lawmakers, government officials, and private contractors.

“The controversy has also revealed that not all capital expenditures translate into growth. And now that we’re plugging those leaks and reallocating funds to high-impact investments — such as education, healthcare, agriculture, and digitalization — we will only grow faster,” Mr. Recto said.

As of end-September, the National Government has released PHP 4.48 trillion, equivalent to 73.72% of its PHP 6.08-trillion full-year disbursement program for 2025.

Economic managers, including Mr. Recto, earlier warned that gross domestic product (GDP) growth likely softened in the third quarter. The government is targeting 5.5-6.5% GDP growth this year.

Official GDP data will be released by the Philippine Statistics Authority on Nov. 7.

Mr. Recto also vowed that “catch-up measures” are underway to keep spending on track and fuel growth.

“Although there has been a slowdown in government spending as we continue to address the flood control corruption controversy, this reflects the administration’s commitment to spend only on legitimate programs and projects,” he said.

He noted the “short-term adjustment” will pave the way for more efficient and transparent public expenditures in the future.

“Having identified and removed anomalous projects, we are ensuring that taxpayers’ money goes to genuine initiatives, eliminating waste and paying only for the true cost of government programs,” Mr. Recto said, adding the President has directed government agencies to cut costs by 50%.

Economy Secretary Arsenio M. Balisacan and Budget Secretary and Development Budget Coordination Committee Chairperson Amenah F. Pangandaman has earlier said the 5.5% to 6.5% GDP growth target remains achievable.

However, some economists have lowered their growth forecast for the Philippines, citing the corruption probe that led to lower investor sentiment.

Last week, Nomura Global Markets Research slashed its 2025 growth forecast for the Philippines to 4.7% from 5.3%, noting the mounting downside risks from a corruption scandal tied to flood control projects.

Sought for comment, Mr. Recto said Nomura’s downgrade is “overly conservative.”

“To reach a 4.7% GDP for 2025, this means the economy will grow by just 4% in the second half of the year. This fails to account for progress made in terms of lower inflation and improvements in the labor market, which will boost household spending, recovery in the agriculture sector, continued growth in services, and stronger performance of merchandise exports despite higher US tariffs,” he said.

Meanwhile, Mr. Recto said the Department of Finance (DoF) is regularly assessing the performance of revenue-collecting agencies as revenues are expected to be affected by the corruption scandal.

“The DoF… is open to making the necessary adjustments, when necessary,” he said. “Nevertheless, the economic managers remain committed to fiscal consolidation by closely monitoring the latest developments internally and externally to ensure we attain the set deficit targets.” — Aubrey Rose A. Inosante, Reporter

Philippine President Ferdinand R. Marcos, Jr. approved the extension of the country’s rice import ban until yearend to help stabilize farmgate prices for unmilled rice, Agriculture Secretary Francisco P. Tiu Laurel, Jr. said on Sunday.

An executive order formalizing the decision would be issued on Nov. 3, Mr. Laurel said in a statement.

“With the import ban having little impact on retail prices and supply of rice but a significant effect on the farmgate price of palay, President Marcos deemed it necessary to extend the suspension for two more months,” he added.

Palace Press Officer Clarissa A. Castro did not immediately reply to a Viber message when asked for confirmation.

The Marcos administration first imposed the import halt on Sept. 1 to counter falling palay prices ahead of the wet harvest season. 

Prices briefly improved after the suspension but began easing again as the policy neared its Oct. 31 expiry.

The country is the world’s top rice importer, according to the US Department of Agriculture (USDA). However, due to the rice import ban, it lowered its 2025 forecast for Philippine rice imports to 4.9 million metric tons (MT) from 5.4 million MT.

As of August, the Philippines had already imported 2.58 million MT of rice this year, compared with 4.81 million MT in 2024.

Mr. Laurel said the extended ban, coupled with assistance to farmers and fisherfolk and the implementation of a floor price for palay, would provide continued relief to rice farmers.

Mr. Laurel said the extension will allow the government to conduct a better assessment of the ban’s impact on the market while “continuing to protect local producers from the downward pressure of cheaper imports.”

At a Senate hearing last month, the Agriculture chief cited excessive import volume, poor-quality harvest, and adverse weather as factors that drove farmgate prices lower.

The Department of Agriculture (DA) estimated that the national rice supply will remain sufficient even with a four-month import suspension.

Retail rice prices have stayed relatively stable, according to the DA’s Agribusiness and Marketing Assistance Service. By November, well-milled rice is expected to average PHP 42 per kilo, while regular-milled varieties will hover around PHP 40 per kilo.

Sought for comment, Roy S. Kempis, retired agriculture economics professor at the Pampanga State Agricultural University, said he supported the extension of the rice import ban.

“This allows adjustments to align with (1) the desired outcome of higher and stable farmgate prices expected by farmers, (2) the predicted farmer behavior to produce and supply more rice because of the incentive to rake in more revenues and profits at the end of each cropping given a higher and stable farmgate price regime, and (3) the clearer policy regime surrounding trade, prices, production, and supply,” Mr. Kempis said in a Viber message.

Jayson H. Cainglet, executive director of the Samahang Industriya ng Agrikultura, urged the government to restore rice import tariffs to their original levels — 35% for Association of Southeast Asian Nations (ASEAN) countries and 50% for non-ASEAN nations — and to strengthen state participation in the palay market.

He said the current 15% tariff has kept farmgate prices low by encouraging cheaper imports, undermining local producers.

Mr. Cainglet added that the rice import ban and Executive Order (EO) No. 100, which established a floor price for unmilled rice, have failed to lift palay prices to the equitable level of PHP 18 per kilo.

He also noted that limited government procurement, covering only 2-4% of total harvest, leaves most of the market under the control of private traders and millers.

“The institutionalization of a palay floor price is a crucial reform,” he said via Viber.

“However, its success depends on the government’s capacity and commitment to buy directly from farmers at scale, ensuring that state procurement truly sets a price floor rather than a symbolic benchmark.”

On Oct. 25, Mr. Marcos signed EO 100, which established a floor price for unmilled rice to protect farmers from sharply falling farmgate prices and to promote fair returns on production.

The order mandated the DA to determine and regularly adjust the floor price based on production costs, market conditions, and regional disparities. — Chloe Mari A. Hufana

The national government’s (NG) debt service bill more than tripled in September as the government increased both amortization and interest payments, the Bureau of the Treasury (BTr) said.

The latest data from the Treasury showed that the debt service bill surged by 250% to PHP 327.89 billion in September from PHP 93.61 billion in the same month last year.

Month on month, the debt service bill slides by 50.67% from PHP 664.72 billion in August.

Debt service refers to the payments made by the government on domestic and foreign borrowings.

The bulk, or 75.08% of debt payments, was made up of amortization payments, the BTr data showed.

In September, amortization payments soared by 1,146% to PHP 246.19 billion from PHP 19.76 billion in the same month a year ago.

This was mainly composed of principal payments on domestic debt, which sharply grew to PHP 237.93 billion in September from PHP 87 million in the same month last year.

Amortization paid on foreign debt plunged by 57.99% to PHP 8.26 billion in September from PHP 19.67 billion in 2024.

Meanwhile, interest payments stood at PHP 81.7 billion in September, up by 10.63% from PHP 73.85 billion a year ago.

Domestic interest payments also increased by 17.81% to PHP 65.27 billion in September from PHP 55.41 billion in the same month last year.

Broken down, PHP 42 billion went to fixed-rate Treasury bonds, PHP 19.18 billion to retail Treasury bonds, PHP 4.04 billion to Treasury bills (T-bills) and PHP 48 million to others.

Interest payments for foreign borrowings slipped by 10.92% to PHP 16.43 billion in September from PHP 18.45 billion in the same month in 2024.

“This is largely due to the large Treasury bond maturity worth P288 billion in September 2025 in terms of large principal payments of the NG,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message over the weekend.

Nine-month period

The NG debt service bill stood at PHP 1.87 trillion in the first nine months of the year, up 13.69% from PHP 1.64 trillion in the same period last year.

The nine-month tally already accounted for 90.97% of the PHP 2.05-trillion debt service program this year.

Amortization payments, which made up the bulk of total payments, rose by 13.43% to PHP 1.2 trillion in the January-to-September period from PHP 1.06 trillion. This was 99.73% of the PHP 1.21-trillion full-year amortization program.

Principal payments on domestic debt increased by 14.4% to PHP 1.01 trillion, while payments on external debt rose by 8.7% to PHP 196.48 billion.

Meanwhile, interest payments grew by 14.15% to PHP 665.85 billion as of end-September from PHP 583.29 billion a year ago. This was 78.52% of the PHP 848.03-billion programmed interest payments for 2025.

Interest payments on domestic debt stood at PHP 494.39 billion, 18.24% higher than PHP 418.13 billion in 2024.

This was made up of PHP 334.14 billion in fixed-rate Treasury bonds, PHP 118.89 billion in retail Treasury bonds, PHP 34.4 billion in T-bills and others (PHP 6.96 billion).

On the other hand, interest payments on external debt rose by 3.81% to PHP 171.46 billion as of end-September from PHP 165.17 billion in the same period a year ago.

In the coming months, Mr. Ricafort said no large Treasury bonds will mature in the fourth quarter, which will likely temper the debt servicing bill.

“Large Treasury bond maturity of at least PHP 200 billion each are scheduled in February 2026 and April 2026,” he said.

The US Federal Reserve and Bangko Sentral ng Pilipinas’ cumulative rate cuts since the later part of 2024 may have helped to trim NG’s interest payments, he said.

However, this may be offset by the peso weakness against the US dollar, which could lead to higher servicing of foreign debt, Mr. Ricafort said.

The peso plunged to a record low of PHP 59.13 per dollar on Oct. 28.

The NG debt stock fell to PHP 17.46 trillion as of end-September but still remained above its projected PHP 17.36-trillion ceiling by end-2025. — Aubrey Rose A. Inosante

Philippine exports of semiconductor and electronic products may see single-digit growth this year, but uncertainty over the US tariff policy continues to cloud the industry’s outlook, the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said.

“We’re looking forward to a single-digit growth, which means anywhere from 1% to 9%,” SEIPI President Danilo C. Lachica told reporters on the sidelines of the Philippine Semiconductors and Electronics Convention and Exhibition on Tuesday.

“My official position is still flat [growth,] but like I said before, there are signs of a positive outlook, modest growth,” he said.

Citing the latest trade data, Mr. Lachica said there are signs of export growth.

“If you look at the PSA (Philippine Statistics Authority) numbers, it looks like we might look forward to that modest growth, a single-digit growth. But now, the projection for the industry is still flat,” he said.

PSA data showed that as of end-August, exports of electronic products reached USD 29.48 billion, 7.4% higher than a year ago. Semiconductor exports during the period likewise grew by 4.9% year on year to USD 22.07 billion.

The SEIPI board is set to meet in November to review its industry projections.

“Even though I’ve seen positive movement, I was hesitant to declare, ‘OK, we’re going to grow,’ because who knows what’s going to happen with the US tariffs,” Mr. Lachica said. “It depends on what side of the bed Trump wakes up on.”

US President Donald J. Trump earlier threatened to slap sectoral tariffs on chips as high as 300%, a move expected to bring back manufacturing to the US.

At present, semiconductor exports are not included in the 19% tariff imposed by the US on Philippine-made goods.    

The US Supreme Court is set to hear oral arguments on Nov. 5 on the legality of Mr. Trump’s tariffs.

“We’ll just continue to ride the wave of zero-percent tariffs for semiconductors and some selected EMS (electronics manufacturing services) products,” Mr. Lachica said.

The SEIPI official said Philippine exports of electronics and semiconductors to the US have declined since the tariffs took effect in August.

“The US Embassy called me and asked, ‘Why are the exports to the US decreasing?’ I said, ‘Why do you think?’” Mr. Lachica said.

The electronics industry is looking to diversify its trade relations with the European Union (EU) and the rest of Asia to mitigate the risks of the US’ uncertain tariff policies, Mr. Lachica said.

“One of the strategies, notwithstanding the progress of the tariff, is we’re looking at diversifying our markets, whether that’s the EU or whether that’s with the rest of Asia,” he added.

Meanwhile, Mr. Lachica said the ongoing corruption scandal involving infrastructure projects is a “major concern” for the industry as investors may reconsider expansion plans in the country.

Asked if corruption in government is affecting investor sentiment, Mr. Lachica replied: “Absolutely.” — Beatriz Marie D. Cruz