Inflation for December is expected to fall within the 2.3% to 3.1% range, with the full-year average projected at 3.2%, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP cited upward pressures in December, primarily from rising food prices due to supply disruptions caused by recent weather disturbances. Higher electricity rates and increasing petroleum costs were also factors contributing to inflation during the month.
However, the central bank noted that a decline in the prices of key agricultural products, such as rice, is likely to have mitigated these inflationary pressures, keeping the year-end figure within the BSP’s target range of 2% to 4%.
For November, headline inflation climbed to 2.5%, slightly higher than October’s 2.3%. With inflation averaging 3.2% year-to-date, it remains within the central bank’s target for 2024.
“The BSP will continue to monitor developments affecting inflation and growth in line with its data-dependent approach to monetary policy,” the central bank said.
The BSP’s forecasted average of 3.2% for 2024 aligns with its annual inflation target. In a separate statement, the BSP confirmed that the government has retained its 2% to 4% inflation target for 2025 through 2028, aiming to strengthen its forward-looking approach and anchor inflation expectations.
Working with the Development Budget Coordination Committee (DBCC), the BSP emphasized that the target range remains suitable for price stability, considering the Philippines’ current economic structure and macroeconomic trends.
The central bank expects inflation expectations to stay within the target range, supported by easing monetary conditions, improving labor market dynamics, and structural reforms to enhance investment.
Despite the more stable outlook, the BSP reiterated the need to remain vigilant against domestic and external risks, calling for continued monitoring and proactive intervention by the government.
The BSP also plans to review its monetary policy framework between 2025 and 2026, ensuring that policy settings align with its mandate to maintain price stability and support sustainable economic growth and employment.
