Petrol prices drive highest Philippine inflation in years

MANILA

A woman stands next to a money changer shop in Manila on November 5, 2026. (AFP Photo)

Soaring petrol prices driven by the Middle East conflict pushed inflation in the Philippines to a 44-month high of 7.8 percent in October, the government said on Nov. 5, as the country continues to struggle with a devalued peso.

The latest inflation number was the highest since the 8.6 percent recorded in February 2023, chief Philippine statistician Dennis Mapa said, topping analysts' forecast of 7.6 percent.

"The main reason for the rise in inflation in October compared to September is the 20 percent rise in transport costs," he told a news conference.

The Middle East conflict has had a harsh impact on the oil import-dependent Philippines, with the peso also diving to record lows, driving up transportation costs for commuters while also affecting other costs from power generation to food transport.

The latest figures bring the inflation rate for the year to 5.6 percent, well above the government target of 2 to 4 percent.

"There are risks that we face ahead," Mapa said, citing the El Nino dry spell now starting to affect the country's food supply as well as rising energy commodity prices.

The inflation data was released two weeks after the central bank raised its key lending rate by a substantial 50 basis points to 5.5 percent.

The bank said it needed a "strong monetary policy response to broadening price pressures and further upside risks to inflation."

As the peso fell to 64 to the dollar last week, President Ferdinand Marcos told Filipinos "don't panic", and blamed the exchange rate woes on the rising prices of oil.