Inflation in Central Visayas eased in June, but the region still posted the highest rate among the country's 18 regions and remained well above the national average.
The inflation rate, which measures the general increase in the prices of goods and services over time, slowed to 10 percent in June from 10.8 percent in May, according to the Philippine Statistics Office (PSA).
Despite the decline, it remained significantly higher than the national inflation rate of 6.4 percent, which also eased from 6.8 percent in May.
While inflation eased across several sectors in June, transportation recorded the sharpest slowdown, with inflation dropping to 16.8 percent from 21.9 percent in May, according to the Philippine Statistics Office (PSA).
Food and non-alcoholic beverage inflation also moderated, although more gradually, easing to 14.2 percent in June from 15.2 percent the previous month.
The decline coincided with falling fuel prices, which began easing in mid-April after reaching as high as P160 per liter for diesel and P110 per liter for gasoline.
The first major rollback took effect on April 14. Diesel prices now range from P86 to P97 per liter, while gasoline sells for P94 to P100 per liter.
Elevated
Amid geopolitical tensions, rising global commodity prices, and climate-related risks such as El Niño, inflation is expected to remain elevated in the succeeding quarters of 2026, according to the first-quarter report of the Department of Economy, Planning and Development in Central Visayas (DepDev-7).
This is expected to result in a slowdown in investment activity in Central Visayas due to heightened business uncertainty.
“Moreover, persistent inflationary pressures and higher electricity rates may also temper investment or expansion plans among firms. Furthermore, due to high inflation, investors may adopt a wait-and-see stance regarding the possibility of further policy rate adjustments by the Bangko Sentral ng Pilipinas (BSP),” the DepDev report said.
The region is particularly vulnerable to fluctuations in fuel prices because it relies heavily on maritime shipping, trucking, and logistics networks to transport goods. It also depends on inter-island and imported shipments for much of its food supply.
As a result, increases in fuel prices quickly drive up transportation costs, pushing higher the retail prices of rice and other essential commodities.
Major input
Fuel is a key production input for many industries in the region, including the manufacture of essential construction materials such as cement and steel.
The fisheries sector also depends heavily on fuel for boat operations. Rising fuel costs have already forced fishers to reduce the frequency and duration of their fishing trips, contributing to lower production.
In Cebu, fisheries production fell by 22.08 percent in the first quarter of 2026 to 7,499 metric tons from 9,623 metric tons in the same period last year.
Despite these challenges, domestic trade expanded significantly in the first quarter, underscoring Central Visayas' continued role as a major distribution and logistics hub in the Visayas.
Total domestic trade reached P126.62 billion, including P100.50 billion in outbound shipments and P26.13 billion in inbound shipments. Outbound trade surged by 177.89 percent, while inbound trade contracted by 59.39 percent.
As a result, the region posted a domestic trade surplus of P74.37 billion, reversing the P28.18 billion deficit recorded in the first quarter of 2025. The turnaround reflected the stronger movement of goods from Central Visayas to other parts of the country.
Anticipated slowdown
Elevated inflation, coupled with higher fuel and construction material costs, is expected to slow construction activity in Central Visayas in the coming months, according to DepDev-7.
Retail trade is also expected to face continued headwinds as inflation and higher logistics costs constrain household spending while increasing business operating expenses. The agency said these pressures could prompt some firms to scale down operations or shorten working hours, keeping labor market risks elevated and slowing employment growth.
DepDev-7 said persistently high inflation remains the underlying driver of many of the region's economic challenges for the rest of 2026, as it raises both the cost of living for consumers and the cost of doing business for enterprises.
Bright spots
Despite these headwinds, the region has a few notable bright spots.
Tourism is expected to improve in the second half of the year with the opening of major venues such as the SM Seaside Cebu Arena and the SM Convention Center Cebu. Bohol is also expanding its regenerative tourism and MICE (Meetings, Incentives, Conferences, and Exhibitions) offerings to attract more visitors and events.
Meanwhile, the depreciation of the Philippine peso has made imported goods and production inputs more expensive, encouraging businesses to source more products domestically. That shift could generate additional opportunities for producers and distributors in Central Visayas. —Ed: Corrie S. Narisma
Contributor
