MANILA, Philippines — Higher global oil prices are beginning to "erode the purchasing power" of Filipino households, a Fitch Group unit said, as rising fuel costs have pushed inflation above target and reduced consumers’ ability to spend.
“We hold a cautious but positive outlook for consumer spending in the Philippines,” BMI Country Risk & Industry Research said in a commentary on Tuesday.
BMI noted that inflation accelerated to 4.1 percent last month, breaching the Bangko Sentral ng Pilipinas’ (BSP) 2- to 4-percent target range for the first time since July 2024. The uptick was largely driven by higher energy prices, with domestic pump prices rising sharply in recent months.
Diesel prices in particular have surged by around 80 percent compared to pre-conflict levels, reflecting the impact of elevated global oil prices. This has translated into higher transportation and production costs, which are being passed on to consumers in the form of more expensive goods and services.
BMI said this “will erode household purchasing power and weigh on domestic consumption.”
