Oil shock drives Philippine inflation to 20-month high of 4.1% in March 2026

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Diesel inflation soars to 59.5% while gasoline inflation reaches 27.3%, causing the overall inflation rate to be at its fastest since July 2024

MANILA, Philippines – Inflation in the Philippines nearly doubled to 4.1% in March as the Middle East crisis pushed fuel and transport costs higher, the Philippine Statistics Authority reported on Tuesday, April 7.

This brings the average inflation print for the year at 2.8%, still within the government’s target range of 2% to 4%. However, March’s inflation rate is the fastest since July 2024 — a 20-month high.

According to National Statistician Dennis Mapa, the Middle East crisis drove up inflation of fuel prices to double digits, the highest since September 2022. Diesel inflation accelerated to 59.5% from a negative rate of -1.3% last February. A negative inflation rate means price levels for a particular commodity are decreasing.

Meanwhile, inflation of gasoline prices surged to 27.3% from -5.7% in February.

The spike in pump prices pushed inflation of transport costs faster to a 37-month high of 9.9%.

Image from Philippine Statistics Authority

Inflation in Metro Manila jumped to 3.6% in March from just 1.9% in February, while inflation in areas outside Metro Manila quickened to 4.2% from 2.5%.

Central Visayas continued to log the fastest inflation rate at 7.4% from 6%, while the Negros Island Region logged the slowest inflation rate at 1.5% from 0.7%. All regions in the Philippines saw inflation accelerate.

Mapa said the oil price shocks from the Middle East crisis played a big part in the inflation spike since the Philippines imports most of its oil supply. He also noted that the last time inflation of fuel prices spiked was during the first months of the Russia-Ukraine war in 2022.

“But definitely we’re seeing higher numbers this April because we had a series of price increases during the first week and we’re not seeing any development that it might go down,” Mapa added in a mix of English and Filipino.

The Department of Economy, Planning, and Development (DEPDev) sought to assure the public that the government is rolling out “coordinated” measures to mitigate the impact of the Middle East crisis on Filipino households.

These measures include the operationalization of the Unified Package for Livelihoods, Industry, Food, and Transport or UPLIFT Committee, as well as the delivery of 165.6 million liters of diesel throughout April to stabilize domestic supply.

“The government is firmly committed to ensuring the continuous delivery of services, even as we pursue decisive measures to enhance the resilience of our economy and institutions, carefully balancing short-term relief measures and longer-term considerations toward enabling the economy to recover high growth quickly,” DEPDev Secretary Arsenio Balisacan said in a statement.

The Bangko Sentral ng Pilipinas (BSP) earlier forecast that inflation in March would settle between 3.1% and 3.9%.

The monetary authority on March 26 decided to keep benchmark interest rates at 4.25% in a rare off-cycle meeting. BSP Governor Eli Remolona Jr. said the surprise Monetary Board meeting was meant to reassure markets that they are constantly monitoring the situation. – Rappler.com