THE Bangko Sentral ng Pilipinas (BSP) expects inflation in March 2026 to settle within the 3.1 percent to 3.9 percent range, as mounting price pressures offset easing trends in some food items.
February inflation stood at 2.4 percent. Inflation is the general increase in prices for goods and services over time, which reduces the purchasing power of money.
In a statement on Tuesday, March 31, 2026, the central bank said inflation risks have intensified due to a sharp rise in domestic petroleum prices, higher rice costs and increased electricity rates in areas served by Manila Electric Company. The depreciation of the peso has also added to upward price pressures by making imports more expensive.
The BSP noted that lower prices of vegetables, fish and meat could help temper overall inflation. However, these easing factors may not be enough to fully offset the impact of rising fuel and utility costs.
It flagged external risks, particularly developments in the Middle East, which could further influence global oil prices and, in turn, domestic inflation and economic activity.
In a recent press briefing, the BSP signaled that inflation could breach its two to four percent range in the coming months. While March inflation is expected to remain above three percent, price growth could accelerate and potentially exceed the four percent ceiling by the second half of the year as oil-related costs feed through the economy.
Despite the near-term uptick, the central bank said inflation expectations remain well anchored, supporting its decision to keep rates steady. Expectations may rise in 2026 but are projected to return within the target by 2027, indicating continued confidence in the BSP’s ability to manage price stability.
However, officials warned that any de-anchoring of expectations would be a “major concern” and could warrant a more aggressive policy response.
With global uncertainties — particularly developments in the Middle East — continuing to cloud the outlook, the BSP said it will remain vigilant and guided by incoming data on inflation and growth.
The central bank underscored that future policy moves will depend on how inflation evolves, especially whether second-round effects begin to take hold. / KOC