Inflation in the Philippines slightly quickened in April, says poll

MANILA, Philippines — Inflation might have slightly quickened in April as lower oil and food prices were likely offset by higher electricity bills and train fares.

An Inquirer poll of 10 economists yielded a median estimate of 1.9 percent for the April consumer price index (CPI). 

If that prediction is correct, it would mark a slight uptick from the 1.8-percent CPI in March.

The forecast was in line with the outlook of the Bangko Sentral ng Pilipinas. The BSP expected price growth to have settled in the range of 1.3. to 2.1 percent last month.

Both projections suggested that the figure that the Philippine Statistics Authority (PSA) will report on May 6 would stay within the 2 to 4 percent target range of the BSP.

Electricity costs drove inflation in April

Emilio Neri Jr., lead economist at Bank of the Philippines Islands (BPI), said a major source of upward price pressure in April was higher electricity costs. This, amid increased demand for air-conditioning due to the summer heat.

The hike in Light Rail Transit 1 (LRT-1) fares was also a driver of price growth.

But Neri said those cost increases were partially offset by lower food and oil prices. He expected inflation to have eased to 1.6 percent in April.

READ: Inflation further slows to 1.8% in March

“Broad-based declines in major food items—particularly rice, vegetables, and fish—along with softer oil and LPG rates continued to drive disinflation,” he said.

“This, combined with the sharp rise in electricity charges and the P5 to P10 LRT fare hike, which affects around half a million daily commuters in the National Capital Region, partially offset the downward pressure on prices,” he added.

Nicholas Mapa, chief economist at Metrobank, had the same view. He penciled in a CPI of 1.9 percent.

“Rice deflation and slower vegetable costs likely keeping inflation subdued as will transport costs,” Mapa said. “Electricity prices might offset the downward pressure.”

Slower inflation could lead to interest rate cuts

As it is, a benign inflation would give the BSP more room to further ease monetary policy settings. This can support economic growth at a time of tariff-induced global uncertainties.

The central bank in April resumed its easing cycle with a quarter-point cut to the policy rate.

The decision brought the overnight rate to 5.5 percent.  It was made in the wake of US President Donald Trump’s flip-flopping on his “reciprocal” tariffs.

Meanwhile, BSP Governor Eli Remolona Jr. hinted at “further cuts” and the end of the easing cycle this year.

“If inflation continues to run below or around the lower end of the BSP’s target, we think this could give room for another policy rate cut from the BSP at its next meeting in June,” said analysts at Chinabank Research who estimated a 1.6 percent CPI for April.

(2025/05/02-02:30)