Two inflation shocks, one policy challenge

PHILIPPINES - Report 20 Jul 2026 by Diwa Guinigundo

The Philippines is facing two simultaneous inflation shocks: a larger-than-expected wage increase and renewed external pressures from volatile oil markets and a weaker peso. Together, these could delay the return of inflation to target, underscoring the importance of maintaining credible monetary policy and keeping inflation expectations well anchored while addressing the structural sources of inflation through broader government action.

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