BSP sees Jan inflation on track to 2.5 – 3.3 % target 

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After hitting 2.9 percent in December 2024, inflation may settle within the target range of 2.5 to 3.3 percent, previously set based largely on the lingering effects of recent typhoons and higher prices of food and oil products, the Bangko Sentral ng Pilipinas (BSP) said.

In an email message sent to reporters on Friday, BSP Governor Eli Remolona said upward price pressures in January stemmed from “the rise in petroleum prices, increased prices of major food items owing to the lingering effects of recent weather disturbances, as well as the annual adjustments in water rates and sin taxes.”

“These upward price pressures are expected to be offset in part by lower prices of rice and electricity rates,” Remolona said.

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“Going forward, the Monetary Board will continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment,” Remolona added.

The January inflation report is set for release on February 5, while the next monetary policy stance meeting is scheduled for February 13.

As recorded, inflation in 2024 marks the first time in four years the indicator returned to the government’s target range. Remolona said earlier there was still enough room to ease the country’s monetary policy stance.

In December, the policymaking Monetary Board reduced the BSP’s target Reverse Repurchase (RRP) Rate by 25 basis points to 5.75 percent.  This was the third consecutive 25 bps-rate cut made by the Monetary Board for last year, totalling 75bps.

Prices of major commodities and utilities continued to climb for the third month in December as inflation hit 2.9 percent, the PSA said last month.

December’s inflation numbers brought the full-year average to 3.2 percent, the slowest since 2021, and at the mid-range of the government’s target range for 2024, which was between 2 and 4 percent.

For 2025, the central bank also retained the full-year target of between 2 and 4 percent.

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