Central Visayas inflation to remain elevated throughout the year

CEBU CITY, Philippines — Global oil prices may be easing as Middle East tensions cool, but inflation – or the general increase in the prices of goods and commodities – in Central Visayas isn’t following suit.

Inflation rates in the region will stay elevated through 2026, the Department of Economy, Planning and Development-7 (DepDev-7) reported in its first-quarter Regional Economic Situationer.

“Inflationary pressures are expected to remain elevated in the coming quarters,” the agency said.

READ MORE: Better logistics, food supply key to cooling Central Visayas inflation

DepDev-7 cited geopolitical risks, mainly the war between the United States and Iran, and a possible El Niño as reasons why inflation is unlikely to ease.

Those factors “could disrupt agricultural output and increase electricity demand for cooling, potentially leading to higher power spot prices and utility rates,” the agency said.

READ MORE: To further tame inflation, BSP hikes policy rate for 2nd time

The region’s reliance on inter-island food shipments, worsened by the U.S.-Iran crisis, also leaves it exposed to high transportation costs.

Drivers, impacts

Central Visayas remains the country’s inflation hotspot, DepDev-7 said, posting the highest rate among the Philippines’ 18 regions for eight straight months as of March.

READ MORE: Inflation, Duterte impeachment spark concerns over possible Ph unrest

First-quarter inflation averaged 6.33 percent, more than double the 2.93 percent recorded in the same period last year.

DepDev-7 attributed the surge to transportation, energy, food and beverages, tourism and services, and global risks and currency swings.

The high inflation has also hit investment and construction, with investors taking a “wait-and-see” stance, the agency said.

Total construction value fell 12.78 percent in the first quarter amid rising fuel costs, while new business registrations dropped 7.75 percent, reflecting caution as higher costs squeeze household spending.

DepDev-7 also linked the pressures to a 5.8 percent unemployment rate for the quarter.

Recommendations

To ease food inflation and supply chain disruptions, DepDev-7 urged local governments to buy directly from accredited farmers and cooperatives, shortening supply chains and stabilizing markets for local produce.

The agency also called for streamlined business permitting, pointing to the tripartite partnership among the Philippine Chamber of Commerce and Industry, the Anti-Red Tape Authority, and the Philippine Ease of Doing Business Foundation as a model.

It further recommended that local leaders keep expanding trade and commerce ties with other countries.

Economists also advised leveraging the peso’s depreciation to boost the competitiveness of regional exports such as electronics and shipbuilding.

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