UOB Cuts Philippines 2026 Inflation Forecast to 6.0% on Faster-Than-Expected Recent Cooling

UOB said the Philippines’ near-term inflation outlook faces risks from El Nino-related supply disruptions and peso volatility, which could slow the pace of disinflation. According to Jin10, UOB economists said in a report that persistent dry weather may hurt agricultural output and push up food prices, especially rice and vegetables. They said supply-side pressures typically last for several quarters and may delay inflation’s decline. UOB noted that because food carries a large weight in the CPI basket, El Nino’s impact on overall inflation could be stronger. The report added that even though energy prices have eased, El Nino remains a key risk factor. Despite these risks, UOB lowered its Philippines 2026 inflation forecast to 6.0% from 7.5%, citing factors including a larger-than-expected drop in overall inflation over the past two months.