Prices of basic goods and services rose faster in December at 2.9 percent from 2.5 percent the month before, largely due to an acceleration in utility price increases, though still within the target, the Philippine Statistics Authority (PSA) reported on Tuesday.
The government’s target range was pegged between 2 and 4 percent.
Despite the pickup in the December rate, the annual average for 2004 fell sharply to 3.2 percent from 6 percent a year earlier, the PSA said.
The overall inflation in December 2024 was primarily driven by faster annual increases in the price indexes of housing, water, electricity, gas and other fuels, at 2.9 percent from 1.9 percent month-on-month.
The faster annual rate of 0.9 percent in the transport index last month, compared with a 1.2-percent slack in November, also helped quicken the price rises in goods and services.
These developments showed that after two years of failing to meet its targets, the annual inflation rate slowed to 3.2 percent, aided by the lag in yearly increases in prices of food and non-alcoholic beverages.
The latest inflation results were “consistent with the BSP’s assessment that inflation will remain anchored to the target range over the policy horizon,” said Eli Remolona, governor of the Bangko Sentral ng Pilipinas (BSP).
He said the balance of risks to the inflation outlook continues to lean on the upside, largely because of the potential upward adjustments in transport fares and electricity rates.
“On balance, the within-target inflation outlook and well-anchored inflation expectations continue to support the BSP’s shift toward less restrictive monetary policy,” the central bank chief noted.
“Nonetheless, the monetary authority will continue to closely monitor the emerging upside risks to inflation, notably geopolitical factors,” Remolona stressed.
The first monetary policy meeting for 2025 is set for February 20.
Last year, the BSP lowered its policy rates thrice for a total of 75 basis points.
