PH inflation to ease gradually but risks remain on the upside, says BSP

The country's inflation is expected to ease gradually over the medium term but risks remain, said Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. on Monday.

"Over the medium term, we expect inflation to ease gradually. However, risks remain tilted to the upside," he said during the briefing of the Development Budget Coordination Committee (DBCC) as the House of Representatives begin the deliberations on the proposed P7.2 trillion national budget for next year.

The BSP said the monetary board is expected to meet on August 27 to discuss its next move.

"The monetary board will meet next week to decide on the next policy action. We will look at all the evidence and we are prepared to take further steps as necessary to ensure that inflation returns to target," said Remolona.

The country’s inflation rate slowed down further for the third straight month in July 2026 to 6.2% from 6.4% in June 2026. still above the government’s comfortable ceiling of 2% to 4%.

"However, inflation remains above our target of 3%. As you know, this is due largely to global supply shocks and the spillover effects on prices in the domestic economy," said Remolona.

Further, the BSP projects headline inflation to ease at 3.1% by 2028.

"The BSP sees headline inflation averaging at 6.4% in 2026, 4.5% in 2027, and both numbers are above the inflation target of 3%. However, by 2028, it's possible that inflation will be close to the target at around 3.1%," said BSP Deputy Governor Zeno Abenoja.

"The BSP sees upside inflation risk and this could emanate largely from the higher global oil prices and higher inflation expectations," he added. — BM, GMA News