Amid surging fuel and electricity costs, worsened by a weakening peso, the Bangko Sentral ng Pilipinas (BSP) expects April inflation to have accelerated to at least 5.6 percent—potentially the fastest pace in nearly three years.

In a statement on Thursday, April 30, the BSP said it expects consumer price increases in April to clock in within 5.6 percent to 6.4 percent. This suggests inflation will continue accelerating from March’s 4.1 percent, which already absorbed the initial impact of the global oil shock.

If the minimum assumption holds true, the April inflation print could emerge as the fastest since September 2023’s 6.1 percent. The top end of the forecast, meanwhile, would be the highest since April 2023’s 6.6 percent.

“Inflation risks have intensified amid upward price pressures from significantly higher domestic petroleum prices, rising prices of key food items such as rice, fish, and meat, increased electricity charges, and the peso depreciation,” the BSP said.

Declines in vegetable and fruit prices could partially offset headline inflation, but the BSP said the major drivers of inflation continue to warrant close monitoring.

“We will continue to monitor recent developments in the Middle East for their implications on inflation and economic activity,” the BSP said.

The BSP raised its average inflation assumptions for full-year 2026 and 2027 from 5.1 percent and 3.8 percent to 6.3 percent and 4.3 percent, respectively. Both projections are higher than the four-percent ceiling.

If the BSP’s 2026 headline inflation forecast is achieved, it would mark an 18-year high since the 8.2 percent recorded at the height of the global financial crisis (GFC) in 2008.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas said April inflation may have seen upticks but at levels lower than the BSP’s assumption, potentially tempering expectations of further interest rate tightening.

Ravelas estimated inflation to have reached five percent in April, which he said reflects “continued pressure from food prices—especially rice and meat—higher transport costs from firmer oil prices, and seasonal demand tied to summer activity.”

Ravelas said the BSP’s recent move to raise key borrowing costs by a quarter point to 4.5 percent “helps anchor inflation expectations and curb second-round effects, though the real impact will be felt with a lag.”

He also projected inflation to stay above the four-percent ceiling in the months ahead. This could fuel further tightening, with additional rate hikes, Ravelas said, noting that the BSP’s future moves will be anchored on data, “mainly hinging on food prices, oil, and inflation expectations.”