Philippine inflation eases to 6.1% in August, still well above target
Key points
- August CPI inflation was 6.1% year on year (down from 6.2% in July; fourth consecutive monthly slowdown), per PSA data.
- The January–August average of 5.2% remains above the government's 2–4% target.
- BSP raised its policy rate to 4.75% in June and lifted its 2026 average inflation forecast to 6.4%.
Facts
Headline: CPI inflation was 6.1% year on year in August 2026 (down from 6.2% in July; fourth consecutive monthly slowdown). The January–August average was 5.2%. Source: Philippine Statistics Authority (PSA) release as reported by GMA News on 4 September. 1
Components: food and non-alcoholic beverages inflation was 4.6% (down from 5.2% in July); housing, water, electricity, gas and fuels was 7.9% (down from 8.2% in July). Same source.
Monetary policy: on 18 June 2026 Bangko Sentral ng Pilipinas (BSP) raised the overnight reverse repurchase rate to 4.75% (raised by 25 bp on 18 June 2026) and raised its 2026 average inflation forecast to 6.4% (raised from 6.3%), with 4.5% for 2027. Source: Philippine News Agency (PNA). Later press coverage puts the policy rate at 5.0% (Inquirer, 9 September). 2
Analysis
Regionally, Philippine inflation of 6.1% is roughly double Indonesia's 3.19% (August, BPS) and well above Malaysia's 1.8% January–July average (BNM). The BSP governor has cited elevated oil and fertiliser prices and broadening second-round effects, pointing to supply-driven inflation. Even as the rate of increase slows, the price level keeps rising cumulatively, so pressure on household real incomes persists.
Implications
Counterpoints and uncertainties
If the slowdown continues, BSP could stop tightening before year-end. Some expect faster disinflation via lower oil and food prices if the Middle East situation calms. The PSA primary release could not be retrieved; figures rely on GMA's report.
Figures: see definitions
- Headline CPI inflation (PSA): 6.1% (down from 6.2% in July; fourth consecutive monthly slowdown). Year-on-year change in the consumer price index. Philippines, national. Basis date: 31 Aug 2026. Source: GMA News: Inflation slows down for fourth straight month at 6.1% in August
- BSP policy rate (as reported): 5.0% (reported by the Inquirer; date of the decision taking it to this level unverified). BSP overnight reverse repurchase rate as cited in press coverage. Philippines, national. Basis date: 9 Sep 2026. Source: Inquirer: Bad loans up amid continuing consumer strain (2026-09-09)
Sources
Reports are for information only and are not investment advice. Methodology: sources, verification and definitions