Inflation is expected to stay well below target in December despite holiday demand and supply‑side risks, the Bangko Sentral ng Pilipinas (BSP) said in its latest forecast.
The central bank projected inflation between 1.2% and 2%, extending subdued price growth for most of 2025.
“Upward price pressures may come from increased prices of major food items due to the lingering effects of adverse weather and strong holiday demand, as well as higher LPG and gasoline prices,” the BSP said.
It added these could be “partly offset by lower electricity prices in Meralco‑serviced areas and declining kerosene and diesel prices,” keeping overall inflation manageable.
If realized, December would mark the 10th straight month inflation undershot the BSP’s 2%–4% target.
For 2025, the central bank expects inflation to average 1.6%, rising to 3.2% in 2026 before easing to 3% in 2027.
The BSP reiterated it “will continue to monitor domestic and international developments affecting the outlook for inflation and growth in line with its data‑dependent approach to monetary policy.”
The prolonged period of below‑target inflation has allowed monetary authorities to ease policy.
On Dec. 11, the Monetary Board cut the benchmark rate by 25 basis points to 4.50%, bringing total reductions to 200 basis points since August 2024.
