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Inflation Update: Bracing for the storm
A protracted geopolitical clash in the Middle East will likely quicken inflation and lead to policy rate hikes
March 5, 2026
By Metrobank Research
By Metrobank Research
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Philippine headline inflation accelerated to 2.4% year-on-year (YoY) in February. This brings year-to-date inflation to 2.2%, still within the Bangko Sentral ng Pilipinas’ (BSP’s) target of 3±1%.
Key points
- Core inflation, which excludes volatile food and energy items, also quickened to 2.9% in February.
- The food and non-alcoholic beverages basket was the largest upward driver to inflation due to faster price increases for vegetables and seafood.
- Rice deflation slowed down in February, with a possible reversal into positive territory in the coming months.
What’s next
- Given recent surges in global oil prices due to conflict in the Middle East, transport inflation is expected to rise going forward.
- Headline inflation is expected to quicken even more as a result. Metrobank revises its full
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