T&S Asset Management

Philippine inflation jumps to 7.2% in September, matching April's peak

Published Data as of PhilippinesMacro & households

Key points

Facts

Headline: the Philippine Statistics Authority (PSA) reported on 6 October that consumer price inflation was 7.2% year on year in September (up from 6.1% in August; matches April 2026). 1 April's 7.2% 2 had been the highest reading since March 2023, when inflation was 7.6%. 3

Components: food and non-alcoholic beverages inflation was 6.7% (up from 4.6% in August); 4 transport 14.6% (up from 13.5% in August); 5 and housing, water, electricity, gas and other fuels 8.4% (up from 7.9% in August). 6

Policy context: Bangko Sentral ng Pilipinas (BSP) had projected September inflation at 6.4%–7.4%. 7 Its policy rate stands at 5.0%, 8 against a government inflation target of 2–4%. 9

Analysis

Time series: inflation jumped from 4.1% in March to 7.2% in April, eased for four months to 6.1% in August 10, and has now returned to the April level (chart). The composition has changed: in August food inflation was only 4.6%, 11 while in September food joined transport and utilities in pushing prices up. Food price increases weigh most on lower-income households, which are also the main users of small-ticket consumer and salary loans.

Cross-country: Philippine inflation is now more than double Indonesia's September rate of 3.28% 12 and far above Malaysia's 1.9% in August. 13 Among the three maritime markets, the Philippines is the only one where inflation sits well above the policy rate, which leaves real borrowing costs negative but real household incomes under pressure.

Credit link: banks' consumer-loan NPL ratio had already risen to 5.49% in July 14 while consumer loan growth slowed to 16.2% in August. 15 A second inflation peak in the same year extends the period over which household budgets are squeezed.

Headline CPI inflation (%)
024684.12026-037.22026-046.82026-056.42026-066.22026-076.12026-087.22026-09
Headline CPI inflation (%)
2026-034.1
2026-047.2
2026-056.8
2026-066.4
2026-076.2
2026-086.1
2026-097.2

Year-on-year change in the national consumer price index (PSA, 2018=100), monthly · Source: Philippine Statistics Authority, Summary Inflation Reports (2026-03, 2026-04, 2026-05, 2026-06, 2026-07, 2026-08, 2026-09)

Implications

ExecutivesPlan for a longer period of high inflation; budget for higher consumer credit costs into 2027 rather than a quick normalisation.
InvestorsA renewed rise raises the chance that BSP keeps policy tight for longer, which weighs on loan demand and on consumer-lender valuations.
OperatorsRefresh affordability buffers in scorecards for food and transport costs, and watch early arrears among salary-loan and low-income borrowers.

Counterpoints and uncertainties

Part of the September rise came from vegetable prices, which can reverse quickly when supply normalises. Fuel prices depend on external oil markets and the peso, so inflation could ease again as it did after April. Higher inflation does not automatically mean higher defaults: wage adjustments and remittances can offset part of the squeeze on household budgets.

Figures: see definitions

  1. Headline CPI inflation (PSA): 7.2% (up from 6.1% in August; matches April 2026). Year-on-year change in the consumer price index. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  2. Headline CPI inflation, April 2026 (PSA): 7.2% (up from 4.1% in March 2026). Year-on-year change in the consumer price index. Philippines, national. Basis date: 30 Apr 2026. Source: PSA: Summary Inflation Report CPI (2018=100), April 2026 (2026-05-05)
  3. Headline CPI inflation, March 2023 (PSA): 7.6%. Year-on-year change in the consumer price index. Philippines, national. Basis date: 31 Mar 2023. Source: The Manila Times: BSP sees inflation hitting 7.4% in Sept (2026-10-01)
  4. Food and non-alcoholic beverages inflation (PSA): 6.7% (up from 4.6% in August). Year-on-year change in the CPI for food and non-alcoholic beverages. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  5. Transport inflation (PSA): 14.6% (up from 13.5% in August). Year-on-year change in the CPI for transport. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  6. Housing, water, electricity, gas and other fuels inflation (PSA): 8.4% (up from 7.9% in August). Year-on-year change in the CPI for housing, water, electricity, gas and other fuels. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  7. BSP month-ahead inflation forecast, September 2026 (high end): 7.4%. Upper bound of BSP's forecast range for September 2026 year-on-year headline CPI inflation. Philippines, national. Basis date: 30 Sep 2026. Source: The Manila Times: BSP sees inflation hitting 7.4% in Sept (2026-10-01)
  8. BSP policy rate (as reported): 5.0% (unchanged since the 28 August 2026 increase from 4.75%). 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)
  9. Government inflation target: 2–4%. Official inflation target range. Philippines, national. Basis date: 4 Sep 2026. Source: GMA News: Inflation slows down for fourth straight month at 6.1% in August
  10. 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
  11. Food and non-alcoholic beverages inflation: 4.6% (down from 5.2% in July). Year-on-year change in the consumer price index. Food and non-alcoholic beverages index. Basis date: 31 Aug 2026. Source: GMA News: Inflation slows down for fourth straight month at 6.1% in August
  12. Headline CPI inflation (BPS): 3.28% (up from 3.19% in August). Year-on-year change in the consumer price index. Indonesia, national. Basis date: 30 Sep 2026. Source: ANTARA: Inflasi tahunan RI capai 3,28 persen pada September 2026 (2026-10-01, BPS data)
  13. Headline CPI inflation (DOSM): 1.9% (up from 1.8% in July). Year-on-year change in the consumer price index (DOSM). Malaysia, national. Basis date: 31 Aug 2026. Source: The Star: Malaysia's inflation rises to 1.9% in August (2026-09-18, DOSM data)
  14. Consumer loan NPL ratio: 5.49% (up from 5.44% in June). Non-performing consumer loans as a share of consumer loans (BSP data). Philippine banking system. Basis date: 31 Jul 2026. Source: Inquirer: Bad loans up amid continuing consumer strain (2026-09-09)
  15. Consumer loan growth: 16.2% (down from 17.1% in July). Year-on-year growth of outstanding consumer loans to residents. Universal and commercial banks. Basis date: 31 Aug 2026. Source: Philstar: Bank lending growth reaches 3-month high (2026-10-02)

Sources

  1. PSA: Consumer Price Index and Inflation Rate (release page)primary
  2. PSA: Summary Inflation Report CPI (2018=100), April 2026 (2026-05-05)primary
  3. Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  4. Philstar: Inflation jumps to 7.2%, highest since March 2023 (2026-05-05)

Reports are for information only and are not investment advice.

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