Market & Mainstreet
Inflation Hits 7.8% as Democrats Win Congress and Oil Falls Below $95
The Daily Scan – November 05, 2026 (Wed)
Inflation jumped to 7.8 percent in October, the fastest in more than three and a half years, driven by transport costs, rice and utilities. Moody’s says a return to 6 percent growth will be a struggle. The peso slipped to 63.535 while stocks rebounded, and Iloilo City approved interest-free loans for its smallest businesses. Abroad, Democrats are projected to win control of both houses of the US Congress, Wall Street rallied, and oil fell below $95 on bets that the Iran war could end sooner, even as President Trump talked of a “heavy hit.” For business owners: expect costs to keep rising for now, but watch for fuel relief next week, and don’t overreact to the headlines.
| Oct. inflation | Core inflation | Peso close | Brent |
| 7.8% |
5.4% |
₱63.535/$ |
$94.62 |
SECTION 1 · Philippines
● Inflation hits 7.8 percent, the fastest since February 2023
WHAT HAPPENED
Inflation rose to 7.8 percent in October from 7.2 percent in September, the fastest since February 2023, Context.ph reported on Nov. 5. Core inflation, which leaves out food and energy, climbed to 5.4 percent from 4.8 percent. Transport led the increase at 20.1 percent, and housing, water, electricity and fuel rose 9.3 percent. Overall food inflation eased to 6.4 percent, but rice rose 20.7 percent and corn 19.3 percent. For the poorest 30 percent of households, inflation reached 9.5 percent. In Metro Manila it was 5.9 percent. The average so far this year is 5.6 percent.
UNCERTAIN
Whether this is the peak. The reading was near the top of the BSP’s 7.1 to 8.1 percent forecast, and this week’s P3.50 gasoline increase will feed into November’s numbers.
WHY IT MATTERS
Rising core inflation means price increases are spreading beyond food and fuel. Customers have less to spend, and the BSP is likely to keep rates high for longer.
RISK / OPPORTUNITY
Risk: weaker spending, especially among lower-income customers facing 9.5 percent inflation. Opportunity: value products, smaller packs and installment options.
NEXT MOVE
Review your prices this week. Where your costs have gone up, raise prices in small steps and explain why, rather than one big jump.
● Moody’s says a return to 6 percent growth will be a struggle
WHAT HAPPENED
Moody’s Ratings expects the Philippine economy to grow 3.3 percent this year and 5.1 percent in 2027, The Philippine Star reported on Nov. 5. Young Kim, Moody’s assistant vice president for sovereign risk, said at a PhilRatings event that “the broader near-term growth will not return to the six percent (level).” He put the country’s medium-term potential at “around 5.5 percent, give or take,” below the roughly 6 percent pace before the pandemic. A return toward 6 percent “would depend heavily on restoring confidence,” he said.
UNCERTAIN
The 2027 forecast. Kim said further delays in public investment could lead Moody’s to revise it, and El Niño and energy prices could hurt farming and inflation next year.
WHY IT MATTERS
Slower long-term growth means business plans built on the old 6 to 7 percent pace may be too optimistic.
RISK / OPPORTUNITY
Risk: slower growth in demand over the next few years. Opportunity: with public spending limited, the government is relying more on private companies to invest and build.
NEXT MOVE
Base your 2027 sales targets on modest growth, around 3 to 5 percent, and treat anything above that as a bonus.
● The peso slips to 63.535 while stocks rebound
WHAT HAPPENED
The peso closed Wednesday at 63.535 per dollar, 6.5 centavos weaker than Tuesday, The Manila Times reported on Nov. 5. RCBC chief economist Michael Ricafort linked it to expectations of higher inflation and the “risk of stagflation in view of the risk of super El Niño drought up to early 2027.” The PSEi rose 1.26 percent to 5,694.92 on bargain hunting in big stocks, lower oil prices, renewed signs of US-Iran talks, lower US Treasury yields and a weaker dollar. Regina Capital’s Luis Limlingan called it “a technical rebound.”
UNCERTAIN
How the peso responds to the inflation figure and the US election results, both of which came after Wednesday’s close.
WHY IT MATTERS
Stagflation, meaning high inflation with slow growth, is the worst mix for small businesses: costs rise while customers spend less.
RISK / OPPORTUNITY
Risk: the peso weakening again if inflation keeps climbing. Opportunity: lower oil prices may give the peso some support.
NEXT MOVE
Keep using a conservative exchange rate, around 64 to 65, in your budgets for imported goods.
● Iloilo City approves interest-free loans for nano businesses
WHAT HAPPENED
The Iloilo City Council approved the UNA Credit Access for Resilient Enterprises (CAREs) Program, which lends P5,000 to P100,000 interest-free to the city’s smallest businesses, the Daily Guardian reported on Nov. 5. The only charge is a one-time 1.5 percent service fee, with repayment over 6 to 18 months and a grace period of up to 60 days. It covers businesses with no more than three workers, including the owner, and assets of P250,000 or less, excluding land. Borrowers need a city business permit or simplified registration, a barangay clearance, proof of residency, a co-maker and completed financial literacy training. Priority goes to women, persons with disabilities, solo parents, returning OFWs, informal workers going formal and agripreneurs. Councilor Rudolph Jeffrey Ganzon, the ordinance’s author, called it “a more accessible and development-oriented alternative” to informal lenders.
UNCERTAIN
How far the money goes. The initial fund is only P3 million, and the report did not describe how to apply.
WHY IT MATTERS
Many nano businesses rely on “5-6” lenders, who charge about 20 percent interest per loan, often over just a month or two. Interest-free credit can make a real difference to a small stall or home business.
RISK / OPPORTUNITY
Opportunity: cheap working capital for Iloilo micro-entrepreneurs, and a model other cities could copy. Risk: missed payments carry penalties of up to 2 percent a month and blacklisting.
NEXT MOVE
If you run a nano business in Iloilo City, get your business permit and barangay clearance in order now and ask the city’s economic development office when applications open.
SECTION 2 · Worth Knowing
● Democrats are projected to win control of both houses of Congress
WHAT HAPPENED
ABC News projects that Democrats will gain control of the US Senate and win enough seats to take control of the House of Representatives, according to its results page updated early Wednesday, US time. Before the election, Republicans held 53 Senate seats and 218 House seats. ABC’s tally showed Democrats with a net gain of seven Senate seats, and the number of House seats was still being counted.
UNCERTAIN
The final seat counts. Some races were still being counted. President Trump has said he would use his veto to block measures he opposes, which points to more gridlock in Washington.
WHY IT MATTERS
A divided government can slow US spending and change policy on trade, the Iran war and tech regulation, all of which affect oil, the dollar and demand for Philippine exports and outsourcing.
RISK / OPPORTUNITY
Risk: slower US policy decisions on trade. Opportunity: markets now have one less big uncertainty.
NEXT MOVE
If you sell to US clients, check in this week about their 2027 plans. Budgets often get set soon after elections.
● Wall Street rallies and oil drops below $95 after the election
WHAT HAPPENED
The Dow rose 3.03 percent on Wednesday, the S&P 500 1.58 percent and the Nasdaq 1.44 percent, Reuters reported via Yahoo Finance. The 10-year Treasury yield fell to 4.88 percent and the dollar index fell 0.23 percent. Gold jumped 3.49 percent to $4,065.80 an ounce. Brent crude fell nearly 9 percent to $94.62 a barrel after President Trump acknowledged the Iran war had contributed to his party’s defeat. Energy stocks were the biggest losers. Investors expect gridlock to limit government spending and a Democratic Congress to look more closely at the AI sector.
UNCERTAIN
Whether the rally lasts. Some analysts warned the first market reaction to elections often reverses once investors focus on gridlock.
WHY IT MATTERS
A big drop in oil is the most direct relief for the Philippines, lowering fuel, transport and power costs if it holds. A weaker dollar also helps the peso.
RISK / OPPORTUNITY
Opportunity: lower import and fuel costs. Risk: oil could rebound quickly if the Iran conflict escalates.
NEXT MOVE
Hold off on fuel stockpiling this week. If oil stays near these levels, pump prices should ease.
● Trump talks of a “heavy hit” on Iran as Tehran says Americans voted against war
WHAT HAPPENED
President Trump told Fox News the US may need to “do something large” against Iran, possibly a “heavy hit,” Gulf News reported in its live coverage. He said the midterm losses were “largely” because the Iran war “drove the gasoline up a little bit short term,” but added, “if I had it to do again, I’d have to do it again.” Iran’s chief negotiator Mohammad Bagher Ghalibaf said Americans voted “NO TO WAR,” and President Masoud Pezeshkian said Iran still seeks a resolution “through dialogue.” Iran’s Revolutionary Guards said four oil tankers hit naval mines south of the Strait of Hormuz and were still burning, a claim Gulf News said had not been independently confirmed.
UNCERTAIN
What comes next. Talks are stalled, and The Wall Street Journal reported that Trump had leaned toward a large attack after the midterms but had not decided. Reuters, cited by GMA News, separately reported Trump saying the US had no immediate plans to strike.
WHY IT MATTERS
Oil fell on hopes the war will end sooner. A major strike could send prices sharply back up.
RISK / OPPORTUNITY
Risk: a sudden jump in fuel prices if the US strikes. Opportunity: relief if talks restart.
NEXT MOVE
Keep a fuel buffer in your budget for November and December rather than spending all of this week’s savings.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Oil’s biggest drop in months could mean fuel relief next week
Brent crude settled at $94.62 a barrel on Wednesday, down 8.7 percent, and US crude fell 8.3 percent to $88.12, both the lowest since Aug. 31, GMA News reported, citing Reuters. Investors bet that the midterm result could hasten an end to the Iran war, and Trump said the US had no immediate plans to strike. Gulf crude exports also rose to 17.1 million barrels a day in October, though still only about three-quarters of pre-war levels. Our reading: local pump prices follow a weekly average of regional prices, so if oil stays near these levels through Friday, next week’s adjustment should bring a rollback, possibly a large one, after this week’s P3.50 gasoline increase. There is an opening for businesses that move fast. Delivery services, transport operators and restaurants can plan “relief” promos for the week a rollback takes effect, and agencies can have campaign ideas ready for clients now, built around passing savings on to customers. If you have been delaying a fuel-heavy job or trip, next week may be the time to do it. Enverus analyst Carl Larry warned that escalation is still possible, so don’t commit to anything long-term on the expectation of lower prices.
SECTION 4 · FOUNDER’S LESSON
The bigger risk is overreacting
After the US election result, State Street Global Advisors’ Michael Arone said the bigger risk was investors overreacting to the result rather than the result itself, an XTB review of the market reaction noted. Before the vote, Stifel’s Washington policy team had warned that the first market move could reverse once investors realized gridlock was the most likely outcome. Saxo’s Charu Chanana said gridlock “doesn’t necessarily mean weaker corporate earnings.” XTB also pointed to Capital Group’s data showing the S&P 500 has risen an average of 15.4 percent in the year after a midterm since 1950, while stressing that this is not a forecast. The lesson for any business owner: big news invites big reactions, and most of them are wrong. This week brings 7.8 percent inflation, an oil plunge and a new US Congress. Before you cut staff, freeze hiring, slash prices or rush into a big purchase, wait a few days, look at your own sales and costs, and decide based on what is actually happening in your business.
SECTION 5 · ONE REAL SIGNAL
AI companies face tighter scrutiny in a new Washington
Asian chipmakers Samsung, SK Hynix and TSMC slid sharply in early trading Wednesday before cutting their losses, as investors weighed what a Democratic Congress means for AI, Reuters reported via RTÉ. TD Securities’ Prashant Newnaha said he expects “tighter scrutiny” of tech and AI companies and more political gridlock, with bonds the “clear winner as the AI trade comes under pressure.” Mirae Asset Securities’ Kim Seok-hwan warned that the Democratic win in Texas could hurt chip stocks and raise the risk of restrictions on data centers. Our reading: if AI spending in the US slows or faces new rules, the effects will reach the Philippines through electronics exports and outsourcing, both of which depend on US tech investment. For agencies and service businesses, the safer bet is to sell AI as a practical tool that saves clients time and money now, rather than as a long-term bet on the AI boom.
Summarized in our own words with links to every source. We don’t reproduce full articles or bypass paywalls. Interpretation is labeled as such and kept separate from reported fact.
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