Philippine Inflation Report for December

MANILA (Reuters) – Philippine annual inflation quickened for a third consecutive month in December due to rising food and utility costs, according to the statistics agency on Tuesday.

The consumer price index (CPI) rose 2.9% in December, exceeding the 2.6% forecast from a Reuters poll, and up from 2.5% in the previous month.

This December inflation figure brought the average inflation for 2024 to 3.2%, comfortably within the central bank’s 2%-4% target for the year, marking the first time since 2021 that the Philippines achieved its inflation goal.

The Bangko Sentral ng Pilipinas (BSP) commented, “On balance, the within-target inflation outlook and well-anchored inflation expectations continue to support the BSP’s shift toward less restrictive monetary policy.”

Core inflation, which excludes volatile food and energy prices, was 2.8% in December, up from 2.5% in November.

Last month, the BSP lowered its key interest rate by 25 basis points to 5.75%, marking the third consecutive cut, and indicated that further easing this year may come in small increments as inflation remains a concern.

A strong majority of economists surveyed by Reuters in December anticipated an additional 25-basis point cut each quarter over the next nine months, potentially bringing the rate down to 5.00% by the end of September 2025.

The BSP stated, “Looking ahead, the Monetary Board will maintain a measured approach to monetary policy easing to ensure price stability conducive to sustainable economic growth and employment.”