Philippine headline inflation accelerated to 7.2% year-on-year in April, the highest level since March 2023. 

Key points
 

• Philippine headline inflation soared to 7.2% year-on-year in April from 4.1% in March, higher than the 5.5% Bloomberg consensus and above the central bank’s 5.6-6.4% projection for the month.
• This brings year-to-date inflation to 3.9%.  
• The acceleration in inflation was mainly driven by a 6.0% rise in food and non-alcoholic beverages, which accounted for 37.3% of the overall increase. Additional upward pressure came from transport costs, as well as LPG and rent.

What's next

• Given higher‑than‑expected inflation in April and renewed risks of further escalation in US-Iran tensions, we revised our full‑year average headline inflation forecast to 7.0% this year and 4.0% next year.
• For fixed income, a neutral duration stance is recommended, with a preference for 2- to 5-year tenors as yields may rise. For equities, a defensive approach focused on high-quality names is advised amid ongoing uncertainty.