Full-year 2025 rate seen at 1.7%
The Bangko Sentral ng Pilipinas (BSP) said on Wednesday inflation in September is estimated at between a low of 1.5 percent — the same rate in August — and a high of 2.3 percent, with upward price pressures likely to have come from higher prices of rice and fish.
The BSP also considered fuel price increases as a factor in its inflation expectations for the month.
These price pressures, however, “could be partially offset by the decline in vegetables and meat prices, along with lower electricity rates,” the BSP said.
The government will release the September consumer price index (CPI) on October 7.
The central bank’s policy-making arm, the Monetary Board, will have its next policy meeting on October 9.
BSP officials have signaled to the markets that another 25-basis-point cut is possible in the fourth quarter, when the Board meets on December 11 for its last policy meeting this year.
On Wednesday, the BSP said it will “continue to monitor evolving domestic and international developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation.”
During its last policy meeting on August 28, the BSP trimmed its target reverse repurchase (RRP) — or policy rate — by 25 bps to 5 percent.
For full-year 2025, the central bank forecasts an average inflation rate of 1.7 percent, 3.3 percent for 2026 and 3.4 percent for 2027 — all within the BSP’s 2 to 4 percent CPI forecast range.
Potential electricity rate adjustments and higher rice tariffs are the main upside risks to inflation, the BSP said.
Analyst consensus for 2025
Meanwhile, 23 economists and analysts polled by the BSP have also reached a consensus forecast of 1.7 percent by the end of 2025. They see the rate accelerating to 2.8 percent in 2026, not as fast as the BSP’s forecast of 3.3 percent for the CPI growth rate next year.
While economists expect subdued price pressures in the next two years, persistent risks to inflation could easily derail the inflation path, they said in the survey.
Upside risks to inflation, they said in the survey, include the potential oil price hikes amid geopolitical tensions in the Middle East, suspension of rice imports, and higher minimum wages.
The downside risk comes from lower rice prices, they said.
In an August 2025 Monetary Policy Report, the BSP said inflation is expected to remain below the target range until the fourth quarter this year.
However, the CPI rates could be higher due to spillover effects of the typhoons and the impact of a rice import ban, it also said.
The central bank said electricity rates and base effects from higher food prices will increase price pressures next year.
In 2026, inflation could hit the upper end of the 2 to 4 percent target in the last quarter before easing in 2027, the BSP said. On the other hand, the BSP also sees the possibility of declines in oil prices resulting in a lower-than-forecast 2026 inflation.
The BSP report said the higher minimum wage assumptions and the lagged effect of the interest rate cuts will have an impact on both the 2026 and 2027 inflation rates.
