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Nomura finds Philippine price pressures the broadest among Asian economies it tracks

Published Data as of PhilippinesMacro & householdsUnsecured
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Key points

Implications for lenders

With price rises spreading to 72.8% of the basket and core inflation at 4.7%, borrowers' disposable income may fall across many spending lines at once, so affordability checks based on older expense norms may overstate repayment capacity. If the policy rate rises to 5.25% as Nomura expects, funding costs for lenders that borrow from banks may also increase.

Implications

ExecutivesPlan for broad cost-of-living pressure and a possible further rate rise when setting loan pricing and growth targets for the rest of the year.
InvestorsWatch whether broad-based inflation feeds into consumer-loan arrears with a lag, as rate rises and price increases hit the same borrowers.
OperatorsRefresh affordability assumptions: with 72.8% of the basket above the target midpoint, fixed household expense allowances may understate actual outgoings.

Facts

Breadth: in a report covered by Philstar on 12 October, Nomura said the Philippines shows the most widespread inflation pressures among the Asian economies it tracks. Its inflation generalisation index for the Philippines is 108 (highest of seven Asian economies tracked by Nomura); higher readings signal more widespread pressure. 1 The share of the CPI basket, weighted by household spending, with inflation above the BSP target midpoint was 72.8% in September (up from 70.8% in August). 2 Nomura noted price increases in restaurants, accommodation and personal care services, which it read as higher energy costs passing into services.

Official data: headline inflation was 7.2% in September (up from 6.1% in August; matches April 2026). 3 Core inflation, which excludes selected volatile food and energy items, rose to 4.7%, a nearly three-year high. 4 Average inflation for January to September was 5.4%, 5 above the 2–4% target range. 6

Outlook: Nomura expects the BSP to raise its policy rate from 5.0% 7 to 5.25% this month, with more tightening possible afterwards. 8 It kept its average inflation forecasts at 5.8% for 2026 9 and 3.4% for 2027, with upside risk from a potentially strong El Niño. 10

Analysis

Cross-country: on Nomura's measure, the share of the basket above the target midpoint is 72.8% in the Philippines against 45.5% in Singapore 11 and 43.7% in Indonesia. 12 Official headline inflation shows the same gap: Indonesia's was 3.28% in September. 13 Nomura's regional index was 102 in August (up from 97.1 in March; below 115 in the 2022 surge), 14 so the Philippine reading stands out against a region where pressure is rising more slowly.

Time series: headline inflation is back at its April peak after easing to 6.1% in August (chart). The rise in core inflation and the spread into services suggest the September jump is not only food and fuel, which is why Nomura sees quick pass-through.

Why breadth matters for credit: when most of the basket rises above target, more household budget lines are squeezed at once, not just transport or rice. For the poorest households, inflation was already 9.0% in September. 15

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)

Counterpoints and uncertainties

The breadth index and basket shares are Nomura's calculations, not BSP statistics, and the report does not give the method or the month for other economies' figures. Nomura's regional view notes that inflation expectations and wage growth remain contained, which could limit second-round effects. The BSP may also pause rather than hike if it judges the shock to be supply-driven.

Key figures

  1. Inflation generalisation index (Nomura): 108 (highest of seven Asian economies tracked by Nomura)
    Nomura's own index; the report does not give the method, the reference month or the other economies' values.
    . Nomura index of how widely price increases spread across goods and services; above 100 signals stronger pressure. Philippines, latest reading. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  2. Share of CPI basket above BSP target midpoint (Nomura): 72.8% (up from 70.8% in August). Share of the CPI basket, weighted by household spending, with inflation above the BSP target midpoint, as calculated by Nomura. Philippines, September 2026. Basis date: 30 Sep 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  3. 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)
  4. Core inflation (PSA): 4.7% (nearly three-year high). Year-on-year change in the CPI excluding selected volatile food and energy items. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation surged to 3-yr high of 7.2% in September (2026-10-07, PSA data)
  5. Average CPI inflation, January–September: 5.4% (up from 5.2% for January–August). Average of monthly year-on-year headline CPI inflation, January–September 2026. Philippines, national. Basis date: 30 Sep 2026. Source: SunStar: PH inflation jumps to 7.2% in September (2026-10-06)
  6. 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
  7. 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)
  8. Nomura expected BSP policy rate after October meeting: 5.25% (25 bp increase from 5.0%). Policy rate Nomura expects the BSP to set at its October 2026 meeting. Philippines. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  9. Nomura forecast: average inflation 2026: 5.8% (unchanged). Nomura forecast of average year-on-year CPI inflation for 2026. Philippines, 2026 average. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  10. Nomura forecast: average inflation 2027: 3.4% (unchanged; risks tilted up). Nomura forecast of average year-on-year CPI inflation for 2027. Philippines, 2027 average. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  11. Share of CPI basket above central-bank target midpoint (Nomura): 45.5% (vs 72.8% in the Philippines)
    Nomura's latest available figure; the report does not state the month.
    . Share of the CPI basket, weighted by household spending, with inflation above the target midpoint, as calculated by Nomura. Singapore, latest available month. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  12. Share of CPI basket above central-bank target midpoint (Nomura): 43.7% (vs 72.8% in the Philippines)
    Nomura's latest available figure; the report does not state the month.
    . Share of the CPI basket, weighted by household spending, with inflation above the central bank's target midpoint, as calculated by Nomura. Indonesia, latest available month. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  13. 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)
  14. Regional inflation generalisation index (Nomura): 102 (up from 97.1 in March; below 115 in the 2022 surge). Nomura index of how widely price increases spread, average of the Asian economies it tracks. Asian economies tracked by Nomura, August 2026. Basis date: 31 Aug 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  15. CPI inflation, bottom 30% income households (PSA): 9.0% (up from 8.2% in August). Year-on-year change in the CPI for the bottom 30% income households. Philippines, national. Basis date: 30 Sep 2026. Source: PSA: Summary Inflation Report CPI for the Bottom 30% Income Households (2018=100), September 2026

Sources

  1. Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  2. Inquirer: PH inflation surged to 3-yr high of 7.2% in September (2026-10-07, PSA data)
  3. Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
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A Japanese version of this article is available: 日本語版

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