The Philippines’ annual inflation rate eased to 6.8% in May 2026 from a three-year high of 7.2% in April, defying expectations of a further rise to 7.5%. The slowdown was driven largely by transport inflation, which decelerated to 16.2% from 21.4% in April, reflecting a rollback in fuel prices later in the month. Even so, transport remained the single biggest contributor to overall inflation.
Price increases also moderated in food and non-alcoholic beverages (5.7% vs 6.0%) and in housing, water, electricity, gas, and other fuels (7.8% vs 8.2%). By contrast, inflation picked up in several categories: clothing and footwear (3.0% vs 2.8%), furnishings and household maintenance (3.9% vs 3.5%), health (4.1% vs 3.8%), recreation and culture (5.2% vs 4.9%), and restaurants and accommodation services (6.7% vs 6.0%).
On a monthly basis, the consumer price index (CPI) fell by 0.5%, its first decline in a year and contrary to market expectations of a 0.2% increase. Meanwhile, annual core inflation climbed to 4.1%, just below the forecast of 4.2% but still the highest rate since December 2023.
