Inflation Update: Steady inflation cements BSP’s rate cut
Consumer-price rise was steady at 2.9% in January.

Annual consumer-price increase held steady in January despite food supply-side shocks.
While there remains upside price risk from risk of higher imports costs amid the strong dollar, within target inflation allows monetary authorities to cut policy rates by 25 basis points at their next meeting.
Key points
- The Philippines’ annual headline inflation was 2.9% in January, the same pace as that of December 2024.
- Core inflation, which excludes volatile food and energy items, decelerated to 2.6% in January from the 2.8% recorded in the preceding month.
- Rice inflation, previously among the largest sources of upside pressure, continued to slide and marked its steepest decline since June 2020. Still, food prices remained the biggest contributor to headline inflation in January as bad weather dragged supply.
What now?
- The steady inflation rate in January allows the Bangko Sentral ng Pilipinas (BSP) to lower the RRP rate to 5.50% at the next Monetary Board meeting.
- Related article: GDP Update: Subdued growth may open rate-cut door
- Looking ahead, imported inflation is expected to play a significant role. The peso’s depreciation may stoke the cost of imported goods, potentially fanning domestic inflation.
- Barring any other supply-side shocks especially on global energy prices, we forecast inflation to average within the BSP’s 2% to 4% target, although we slightly raise our estimate to 3.4% for 2025 from 3.2% previously as the impact of exchange rate movements to inflation takes effect.
(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)
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Inflation Update: A steady start in 2025
Consumer-price rise remaining on target allows BSP to continue easing monetary policy