Rising transport and energy costs push inflation to 4.1% amid fallout from Middle East conflict…..
Inflation in the Philippines accelerated sharply in March, climbing to its highest level in nearly two years as soaring global fuel prices rippled through the economy.
Official data released Tuesday showed inflation hitting 4.1%, a significant jump from 2.4% in February and the steepest increase since mid-2024. The surge comes as the import-reliant nation grapples with what authorities have already declared a “national energy emergency.”
At the center of the spike is a dramatic rise in transport costs, driven by an unprecedented surge in fuel prices linked to ongoing tensions in the Middle East. According to national statistician Dennis Mapa, transport inflation reached 9.9% in March, making it the single biggest contributor to the overall increase.
Diesel prices critical for the country’s public transport system have soared by nearly 60%, placing additional strain on commuters and businesses alike.
Government data also showed broader price pressures building beyond fuel. Non-food inflation climbed to 4.9% from 2.8% the previous month, while private transport costs surged by over 31%, reversing a decline recorded in February.
Food prices added to the pressure, with the cost of food and non-alcoholic beverages rising by 3.0% year-on-year in March, up from 1.8% a month earlier.
The inflationary shock underscores the Philippines’ vulnerability to global energy disruptions. Since late February, fuel prices have surged worldwide following military strikes involving the United States and Israel on Iran, and Tehran’s subsequent restrictions on traffic through the Strait of Hormuz, a critical route for global oil shipments.
In response, Manila has moved aggressively to secure alternative energy supplies, opening negotiations with non-traditional partners such as Russia. Authorities have also rolled out emergency measures at home, including financial assistance for transport workers and a temporary shift to a four-day work week for some government employees to reduce fuel consumption.
There are, however, tentative signs of diplomatic progress. Officials recently disclosed that a conversation between Philippine Foreign Secretary Theresa Lazaro and her Iranian counterpart resulted in assurances that oil shipments bound for the Philippines would be allowed safe passage through the Strait of Hormuz.
Even so, with global oil markets still volatile, the outlook remains uncertain leaving policymakers balancing urgent relief measures with longer-term strategies to shield the economy from external shocks.
