Inflation in Central Visayas is expected to remain elevated in the coming months, driven by higher global oil prices, geopolitical tensions, and climate-related disruptions, according to the Department of Economy, Planning and Development (DEPDev) 7.
Key Drivers of Inflation
The regional outlook highlights that the area's reliance on inter-island and imported food shipments makes consumers vulnerable to rising transport costs. Warmer temperatures associated with the expected El Niño could strain the power sector and push electricity prices higher.
“Reliance on inter-island and imported food shipments means increased transport expenses may raise retail prices of rice and essential commodities,” the agency said in its First Quarter 2026 Regional Economic Situationer.
Higher electricity demand during hotter weather may also place operational stress on power generation facilities, increasing the likelihood of unplanned outages. These supply constraints could drive up prices in the Wholesale Electricity Spot Market, leading to higher electricity rates for households and businesses.
Geopolitical and Climate Risks
Geopolitical tensions in the Middle East, particularly the US-Israel-Iran conflict, have lifted global oil prices and threaten fertilizer supplies. Since the Persian Gulf is a major exporter of fertilizer and petrochemical-based agricultural inputs, higher costs could increase food production expenses and worsen food security concerns.
Climate risks also remain a major concern. Stronger typhoons linked to warmer ocean temperatures could disrupt food supply chains, damage crops, and affect transport and utility infrastructure, adding further upward pressure on prices.
First Quarter Inflation Data
Inflation in Central Visayas accelerated sharply in the first quarter of 2026. Average inflation reached 6.33 percent in the January-to-March period, more than double the 2.93 percent recorded in the same period last year. Inflation climbed steadily from 5.6 percent in January to six percent in February before peaking at 7.4 percent in March, making Central Visayas the region with the country’s highest inflation rate for the eighth consecutive month.
January’s increase was largely driven by restaurants and accommodation services, which posted a 9.1-percent annual increase, reflecting stronger tourism demand following the Sinulog Festival.
Food prices also accelerated in February. Inflation for food and non-alcoholic beverages rose to 9.3 percent from 8.2 percent in January, while rice prices reversed from a 3.6-percent deflation in January to a 2.3-percent inflation rate in February. DEPDev attributed the turnaround partly to lingering supply disruptions caused by the Northern Cebu earthquake and typhoon Tino in late 2025, which affected logistics and food distribution.
Transport and Electricity Costs
Transport emerged as the biggest inflation driver in March, surging to 8.2 percent from 1.7 percent in February as global oil prices climbed amid escalating tensions in the Middle East. Higher fuel costs raised public transportation fares, freight charges, and logistics expenses across the region.
Housing and utilities also contributed to faster inflation. Inflation for housing, water, electricity, gas, and other fuels accelerated to 3.1 percent in January from 1.1 percent in December before reaching 4.1 percent in February, partly due to higher residential electricity rates imposed by distribution utilities and electric cooperatives across Central Visayas.
Data cited by DEPDev showed the regional average residential electricity rate increased from P11.24 per kilowatt-hour in January 2025 to P12.31 per kWh in January 2026, while February’s average rose from P11.35 to P11.75 per kWh year on year.
Outlook and Monitoring
Although global rice prices ended their downward trend during the first quarter, DEPDev cautioned that rising oil and fertilizer prices could offset any gains by increasing production and transport costs, keeping food inflation elevated in the months ahead.
Despite the challenging outlook, the agency said close monitoring of global commodity markets, weather developments, and power supply conditions will be critical in managing inflation risks and limiting their impact on households and businesses across Central Visayas.
