The Philippines’ headline inflation, or overall inflation, eased to 6.8 percent in May 2026 from 7.2 percent in April 2026. This is below market expectations and the BSP forecast range, bringing the average inflation rate from January to May 2026 to 4.5 percent. In May 2025, the inflation rate was 1.3 percent.
1. Transport: This was the biggest factor behind the slowdown, mainly due to lower fuel prices both globally and locally (e.g., gasoline and diesel).
2. Food and Non-Alcoholic Beverages: The second major contributor. Food inflation cooled due to slower price increases in vegetables, tubers, and meat.
3. Housing, Water, Electricity, Gas, and Other Fuels: This category also contributed to the easing of inflation, with utilities, liquefied petroleum gas (LPG), and electricity showing slower price growth.
While easing inflation may provide some relief on household expenses, it is only one part of the picture. Whether consumers can actually spend depends just as much on whether they have a stable income.
So what does the labor market look like? In April, the labor force participation rate was estimated at 62.7%, or about 51.30 million Filipinos aged 15 and above who were either working or actively looking for work. With the number of employed Filipinos increasing compared with January, alongside declining unemployment figures relative to those recorded from January to March, labor market conditions appear to be showing slight improvement.
In terms of job types, wage and salary workers continued to make up the largest share of the workforce in April 2026, followed by self-employed individuals without paid employees, unpaid family workers, and those running family businesses or farms. From March to April 2026, there was a small but positive shift, with an increase in the share of wage and salary workers, while unpaid family work declined. This suggests that more people are moving into paid and relatively more stable jobs. But month-on-month progress only tells part of the story — compared with a year ago, the picture is less positive.
On a year-on-year basis, both unemployment and underemployment rose — a reminder that the recovery is still uneven.
While more Filipinos may technically be employed, the rise in underemployment compared with last year suggests that many workers are still struggling to secure enough income or stable working hours. Around 7.41 million employed Filipinos were still looking for additional work hours or a second job. This may reflect lingering pressure on household incomes and consumer spending, even as headline employment figures appear to improve
And what do these numbers say about where Filipino consumers stand today?
The latest inflation and labor market data show a mixed but slightly improving picture for Filipino consumers. Inflation has eased a bit, which may give households some breathing room on everyday costs like transport, food, and utilities. More Filipinos are also moving into wage and salary jobs, which usually means more stable and predictable income.
Still, it’s not completely smooth sailing. Many Filipinos continue to face underemployment and higher living costs compared with last year, so even with jobs, a lot of households are still careful with how they spend.
Because of this, spending behavior is likely to stay practical in the near term. Consumers are expected to remain selective, leaning toward essentials, comparing prices more closely, and taking advantage of discounts when available.
Retailers are already adjusting to this kind of behavior. Puregold, for example, recently launched its “Always Price Packs,” a move aimed at keeping basic goods more affordable and predictable for budget conscious shoppers as inflation continues to affect household spending.
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