Student activists hold a demonstration along Taft Avenue in Manila against the continued implementation of excise taxes on oil on March 17, 2025.
The STAR / Edd Gumban
MANILA, Philippines — Surging global oil prices driven by tensions in the Middle East could push Philippine inflation beyond the central bank’s target range this year, an economist said, raising concerns about renewed price pressures.
Rizal Commercial Banking Corporation chief economist Michael Ricafort said inflation may breach the 4% upper end of the Bangko Sentral ng Pilipinas target band, as higher fuel costs spill over into transport, wages and other goods.
“Inflation would likely go up and could potentially breach above the 4 percent upper range of the BSP’s inflation target,” Ricafort said in an interview with the Philippine News Agency.
Ricafort said rising oil prices could trigger second-round effects, where higher transport and production costs lead to broader increases in consumer prices.
“High oil/fuel prices would lead to higher fares, wages, and other prices of other affected goods and services,” he said.
Global oil prices have climbed close to $100 per barrel, with US benchmark West Texas Intermediate (WTI) at $98.32 as of posting time.
Locally, diesel prices are projected to increase by P16.60 to P17.50 per liter, while gasoline prices may rise by P7.50 to P8.50 per liter next week.
Philippines: Consumer Price Index (CPI) Feb. 2023 to Feb. 2026
CPI, which measures the average change over time in prices paid by consumers for a fixed basket of goods and services, increased to 131.20 points in February from 131 points in January of 2026.
120.5 122.5 124.5 126.5 128.5 130.5 Feb. 2023 Feb. 2024 Feb. 2025 Feb. 2026
121.4
121.1
120.9
120.9
121.1
121.2
122.5
123.9
123.7
123.9
124.1
124.8
125.5
125.6
125.5
125.6
125.6
126.5
126.6
126.3
126.5
127.0
127.7
128.4
128.1
127.8
127.3
127.2
127.3
127.7
128.5
128.5
128.6
128.9
130.0
131.0
131.2 131.2
Inflation trend
The latest data show inflation had been relatively contained before the recent oil shock.
Inflation stood at 2% in January, at the lower end of the BSP’s 2% to 4% target, before accelerating to 2.4% in February.
However, analysts now expect faster price increases, similar to the surge seen during the early stages of the Russia-Ukraine war in 2022.
Policy response. Ricafort said targeted subsidies could help cushion the impact of higher fuel prices on consumers.
He added that the BSP may need to adjust its policy stance again to keep inflation within target, even if tighter conditions could slow economic growth.
The BSP’s Monetary Board in February cut its key policy rate by 25 basis points to 4.25%, bringing total rate reductions since August 2024 to 2.25 percentage points.
https://www.philstar.com/headlines/2026/03/22/2516087/inflation-seen-breach-4-oil-prices-surge
