DEPDev Warns of Persistent Inflation in Central Visayas

Inflation in Central Visayas is expected to remain elevated in the coming months as global commodity prices, geopolitical tensions, weather-related disruptions and power supply challenges continue to put pressure on the prices of essential goods and services, according to the Department of Economy, Planning and Development (DEPDev) Region 7.

In its First Quarter 2026 Regional Economic Situationer, DEPDev said the region remains exposed to several external and domestic risks that could keep inflation above normal levels, particularly because of its dependence on imported goods and inter-island shipments for food supplies.

The agency said transportation costs remain a major concern, as increases in fuel prices could quickly translate into higher retail prices for basic commodities across the region.

“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.

DEPDev also warned that the anticipated effects of El Niño could create additional challenges for the region’s power sector.

Higher temperatures are expected to increase electricity consumption, placing greater demand on power generation facilities and increasing the risk of supply interruptions.

According to the agency, increased demand during hotter months could lead to operational strain on generating plants, raising the possibility of unplanned outages.

Reduced power supply could also drive prices higher in the Wholesale Electricity Spot Market, resulting in increased electricity rates for households and businesses.

Aside from domestic concerns, DEPDev pointed to ongoing geopolitical tensions in the Middle East as another factor contributing to inflationary pressures.

The agency noted that the continuing US-Israel-Iran conflict has contributed to higher global oil prices, increasing transportation and logistics costs worldwide.

The agency also warned that the conflict could disrupt fertilizer supplies since countries in the Persian Gulf are major exporters of fertilizer and petrochemical-based agricultural inputs. Higher fertilizer costs could raise agricultural production expenses, placing additional pressure on food prices and food security.

Climate-related risks likewise remain a concern for Central Visayas. DEPDev said stronger typhoons associated with warmer ocean temperatures could damage agricultural production, interrupt supply chains and affect transportation and utility infrastructure, all of which could contribute to further increases in consumer prices.

The warning comes after inflation in Central Visayas accelerated significantly during the first quarter of 2026.

Data from DEPDev showed that average inflation in the region reached 6.33 percent from January to March, more than double the 2.93 percent recorded during the same period in 2025.

Inflation steadily increased throughout the quarter, rising from 5.6 percent in January to 6 percent in February before reaching 7.4 percent in March.

The March figure marked the eighth straight month that Central Visayas posted the highest inflation rate among all regions in the country.

Restaurants and accommodation services were among the primary contributors to inflation in January, recording a 9.1-percent annual increase.

DEPDev attributed the higher prices to stronger tourism activity following the Sinulog Festival, which boosted demand for food and hospitality services.

Food inflation also intensified in February. Inflation for food and non-alcoholic beverages rose to 9.3 percent from 8.2 percent in January. Rice prices likewise shifted from a 3.6-percent deflation in January to a 2.3-percent inflation rate the following month.

DEPDev said the increase in rice prices was partly due to lingering supply disruptions caused by the Northern Cebu earthquake and Typhoon Tino in late 2025.

The disasters affected transportation networks and slowed food distribution across several areas of the region.

Article by – Rickee Martin Sucayre, TMC Intern