MANILA, Philippines – Inflation sped up further for the second straight month as higher fuel, electricity, and transport prices squeezed households already struggling with the rising cost of living.

Inflation soared to 7.8% in October from 7.2% in September, the Philippine Statistics Authority (PSA) said on Thursday, November 5. It stood at just 1.7% in October 2025.

October 2026’s rate now marks the highest inflation rate since February 2023, when it reached 8.6% amid the lingering effects of Russia’s 2022 invasion of Ukraine, which had disrupted global food and energy markets.

The latest inflation figure brought average inflation from January to October to 5.6%, well above the government’s target range of 2% to 4%.

OCTOBER INFLATION. The commodities above contributed the most to October’s overall inflation, but they are not necessarily the same ones that drove its acceleration, which measures what pushed inflation up compared with September. Image from Philippine Statistics Authority

Transport was the biggest driver of the rise in October inflation. As a whole commodity group, transport inflation surged to 20.1% from 14.6% as fare increases implemented in late September reflected fully in the data. Inflation for other passenger transport by road, including jeepneys and tricycles, reached 11.6%, its highest since June 2023. Bus fares recorded 10.2% inflation. Fuel prices added to the pressure, with gasoline inflation reaching 51.1% and diesel 62.4%.

The second biggest commodity group driver was housing, water, electricity, gas, and other fuels, which recorded 9.3% inflation. Liquefied petroleum gas or LPG inflation soared to 43.4%, while electricity and housing rents registered 14.5% and 4.2%, respectively.

Food inflation actually eased to 6.1% from 6.7% in September. However, rice inflation reached 20.7%, its highest since July 2024. Rice alone contributed 1.4 percentage points to October’s 7.8% headline inflation rate. National Statistician Dennis Mapa attributed this partly to a drop in palay production throughout the third quarter of 2026 and the effects of El Niño.

More worrying was the continued rise in core inflation, which excludes volatile components of the inflation basket, like food and energy. Even without those, the core inflation rate climbed to 5.4% in October 2026, its highest since September 2023, when it reached 5.9%.

The poorest Filipinos continue to be the hardest hit. Inflation among the bottom 30% income households reached 9.5%, up from 9% in September. Average inflation for the bottom 30% has now reached 6.8% for 2026.

The weakening peso has also made imported fuel and other goods more expensive, although Mapa said the PSA had yet to estimate the exact impact of the depreciation.

Asked by Rappler about the late September minimum wage hike, Mapa said higher labor costs could be feeding into prices of restaurant meals and labor-intensive services, but how much of those increases came from wages alone has yet to be established.

Looking ahead, Mapa warned that the effects of El Niño on agricultural production, continued increases in global energy prices, and transport fares could keep inflation elevated. Transport inflation, in particular, could be a repeated pressure point because fares are now being compared with lower levels a year ago, before the recent hikes.

Filipinos are already feeling financially stretched. An October study by Organic Intelligence found that 45% of urban Filipinos said inflation had drained their motivation to get ahead, while 42% had borrowed money for essentials such as food and transportation.

The persistent price pressures have also pushed the BSP to tighten monetary policy. The central bank hiked its benchmark interest rate by a “jumbo” 50 basis points to 5.50%, its fourth consecutive increase in 2026.

BSP Governor Eli Remolona Jr. warned that inflation could accelerate further in the coming months due to oil prices, transport fares, and the potential effects of El Niño on food production.

The BSP forecasts inflation to average 6.1% in 2026 and 6% in 2027. – Rappler.com

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