PHL inflation could peak at 6.5% in July, average 6% for 2026, economist says

INFLATION could peak at 6.5% in July and bring the 2026 average to 6% due to the energy crisis, amplified by base effects, an economist said.

“We expect the inflation to peak by July to around 6.5%, and then that’s when I believe it’s going to start slowing down, maybe in the last month, depending on how things move in the Middle East,” University of Asia & the Pacific (UA&P) School of Economics Senior Economist Victor A. Abola said at a forum on Wednesday.

“The average for this year will be close to 6%,” he added.

In 2025, inflation averaged 1.7%, the weakest reading since the 1.3% recorded in 2016.

“That’s also the reason why (inflation projections are) high, because we had very low inflation last year,” he said.

The Bangko Sentral ng Pilipinas expects consumer price index growth to average 6.3% this year, well above its 2-4% target.

March inflation accelerated to a two-year high of 4.1% as fuel, electricity and food prices surged. This brought the three-month inflation average to 2.8%.

Economic growth is also expected to come in at 4.2% this year, Mr. Abola said.

He noted that opportunities for growth include boosting agricultural productivity, manufacturing, infrastructure, education, and health products and services.

If realized, this projection would be a new record low after the 4.4% gross domestic product growth reading in 2025, when public spending was muted due to the infrastructure corruption scandal. 

UA&P School of Economics Dean Peter L. U said the Middle East conflict is driving a shift to electric vehicles.

“This is probably the last, or to be safe, the second to the last oil crisis that we will face… as modern technology has brought us to a point where we can actually substitute away from oil,” he said. — Justine Irish D. Tabile