Philippines Core Inflation Rises to 2.9% in February: Trend and Market Impact
Table of Contents
Big-Picture Snapshot
- Core inflation rate (YoY): 2.9% in February 2026
- January 2026: 2.8%
- 12-month average: 2.5%
- September 2025: 2.7%
- Lowest in past year: 2.2% (May–June 2025)
Drivers This Month
- Services: +0.22 percentage points
- Processed food: +0.13pp
- Transport: +0.07pp
- Housing: +0.04pp
Policy Pulse
The 2.9% reading sits comfortably within the BSP’s 2–4% target band, reducing immediate pressure for policy adjustment.
Market Lens
PHP was steady after the release, reflecting market confidence in the central bank’s inflation management. The muted reaction highlights expectations for continued policy stability barring further price shocks.
Foundational Indicators
- Core inflation has climbed for two consecutive months: 2.4% (December 2025), 2.8% (January 2026), 2.9% (February 2026).
- Headline inflation (not seasonally adjusted) remains above core, but the gap has narrowed since late 2025.
- Food and energy components outside the core basket showed mixed trends, with processed food contributing more than fresh produce.
Drivers This Month
- Services inflation: highest monthly contribution since October 2025
- Processed food: sustained upward pressure
Policy Pulse
BSP’s inflation target remains 2–4%. The current print is well within range, supporting the central bank’s cautious stance.
Market Lens
Bond yields were little changed, as investors saw no immediate risk of policy tightening. The stable core reading reassured fixed income markets.
Chart Dynamics
What This Chart Tells Us: The persistent climb in core inflation since late 2025 underscores broad-based price pressures, especially in services and processed food. The current level, while within the BSP’s target, signals that disinflationary forces have weakened. If the trend persists, it could challenge the central bank’s policy flexibility in the coming quarters.
Forward Outlook
- Bullish scenario (25–35%): Core inflation moderates below 2.7% by mid-2026 as food and services pressures ease.
- Base case (50–60%): Core inflation remains between 2.7% and 3.1% over the next quarter, tracking within the BSP’s target.
- Bearish scenario (10–20%): Sustained increases in services and food push core inflation above 3.1%, raising policy risk.
Upside risks include further supply-side shocks in food and transport, while downside risks stem from weaker domestic demand. The BSP’s data-driven approach and the current reading’s alignment with the target band suggest a steady policy hand for now.
Data source: Philippine Statistics Authority, Sigmanomics database. Methodology: Core inflation excludes volatile food and energy items, focusing on underlying price trends.
Closing Thoughts
Core inflation in the Philippines has edged higher for a second month, reaching 2.9% in February 2026. The indicator remains within the central bank’s comfort zone, but the upward trend since late 2025 warrants close monitoring. Services and processed food continue to drive underlying price pressures, while market and policy responses remain measured.
Key Markets Reacting to Core Inflation Rate YoY
Core inflation readings in the Philippines influence a range of asset classes, from equities to currencies. The following symbols, verified from Sigmanomics, have shown sensitivity to inflation data releases:
- AAPL (Equities): Global tech shares often react to inflation-driven shifts in risk sentiment.
- EURUSD (Forex): The pair reflects broad dollar moves tied to emerging market inflation trends.
- BTCUSD (Crypto): Bitcoin’s price can respond to inflation surprises in key emerging markets.
| Year | PH Core Inflation YoY (%) | AAPL (Annual % Change) |
|---|---|---|
| 2020 | 2.9 | 80.7 |
| 2021 | 3.2 | 34.0 |
| 2022 | 2.6 | -26.8 |
| 2023 | 2.8 | 48.2 |
| 2024 | 2.5 | 49.0 |
| 2025 | 2.4 | 41.2 |
Since 2020, AAPL’s annual returns have not shown a direct correlation with Philippine core inflation, but both reflect broader risk appetite and macroeconomic cycles.
FAQs: Philippines Core Inflation Rises to 2.9% in February: Trend and Market Impact
- What is the latest core inflation rate in the Philippines?
- The core inflation rate for February 2026 is 2.9% year-over-year, according to official data.
- How does this reading compare to recent months?
- February’s 2.9% is up from January’s 2.8% and above the 12-month average of 2.5%.
- Why is the core inflation rate important?
- Core inflation strips out volatile items, providing a clearer view of underlying price trends and informing monetary policy decisions.
Philippine core inflation’s steady climb since late 2025 signals persistent underlying price pressures, but remains within the central bank’s comfort zone.
Updated 3/5/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
- Sigmanomics database, “Core Inflation Rate YoY, PH,” accessed March 5, 2026.
- Philippine Statistics Authority, official inflation releases, February–March 2026.
February’s 2.9% core inflation marks a slight increase from January’s 2.8%, and stands above the 12-month average of 2.5%. The last time core inflation was this high was in September 2025, when it reached 2.7%. Over the past six months, the indicator has trended upward from a low of 2.2% in June 2025, reflecting persistent price pressures in services and processed food.
Compared to the previous quarter, the pace of increase has accelerated: October 2025 saw 2.6%, November 2.5%, December 2.4%, followed by a jump to 2.8% in January and 2.9% in February. This sequence signals a gradual but steady build-up in underlying inflationary momentum.