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Jekki Pascual

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MANILA — The Bangko Sentral ng Pilipinas is projecting an average of 5.1 percent inflation for 2026 due to the fuel price shocks brought by the conflict in the Middle East, where the US and Israel ignited a regional conflict by attacking Iran in late February.This is higher than earlier projections and also higher than the government target of 2 to 4 percent. BSP Governor Eli Remolona Jr said the conflict in the Middle East is not only affecting the price of oil products but of other commodities as well, including fertilizers.&quot;Globally, aside from oil, other commodity prices have climbed, notably fertilizer, which would add to food inflation. Domestic fuel prices are rising. This inflation is driven by supply shocks where the potency of monetary policy is limited,&quot; Remolona told reporters during the off-cycle monetary policy meeting press conference.<div><a href="https://www.abs-cbn.com/news/business/2026/3/25/marcos-jr-cuts-oil-excise-tax-to-ease-double-digit-spikes-in-ph-fuel-prices-1901">Marcos Jr. cuts oil excise tax to ease double-digit spikes in PH fuel prices </a></div>&quot;If you look at 2026, previously we were projecting an average of 3.6 percent, now it is possible that it could average 5.1 percent this year,” Deputy Governor Zeno Abenoja added.Month ahead outlook for inflation points at 3.5 percent for March and a jump to 5 percent for April 2026.This is much higher than the January inflation rate of 2 percent and 2.4 percent in February 2026.The full year 2025 inflation meanwhile was 1.7 percent.Abenoja added that they also factored in the possible transport fare hike and possible electricity rate hike and potential higher tariffs and higher fertilizer prices. But they recognize the mitigating effects of a possible removal of the fuel excise tax.Remolona said the Monetary Board has decided to hold an off-cycle meeting and they decided to maintain the key policy rate at 4.25 percent.&quot;To raise rates at this time would be painful,&quot; he added.<div><a href="https://www.abs-cbn.com/news/business/2026/3/25/dbm-approves-release-of-p20-billion-to-secure-fuel-supply-1506">DBM approves release of P20 billion to secure fuel supply </a></div>The BSP chief said they are looking at all data and information as they remain vigilant to keep prices stable amid the war in the Middle East.He also assured the public that the weakening of the peso is not necessarily a bad thing. “So far it hasn’t merited heavy intervention... The peso, where it’s going, seems to help with our current account deficit, seems to help with our exports. It’s not necessarily a bad thing,” he added.The next scheduled Monetary Policy meeting will be on April 23, 2026. Remolona said with the ongoing conlfict abroad, they may hold more off-cycle meetings.<div><a href="https://www.abs-cbn.com/news/business/2026/3/23/peso-continues-to-depreciate-breaches-new-low-again-1751">Peso continues to depreciate, breaches new low again</a></div>

BSP Governor Eli Remolona Jr said the conflict in the Middle East is not only affecting the price of oil products but of other commodities as well, including fertilizers.

BSP Governor Eli Remolona Jr said the conflict in the Middle East is not only affecting the price of oil products but of other commodities as well, including fertilizers.

BSP projects average inflation to hit 5.1%

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BSP projects average inflation to hit 5.1%

Jekki Pascual,

ABS-CBN News

Published March 26, 2026 06:21 PM PHT

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Bangko Sentral ng Pilipinas

Inflation

Oil Price Hike

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