The Bangko Sentral ng Pilipinas (BSP) said on Tuesday that the inflation outlook remains benign and inflation expectations are well anchored, despite the uptick in the December 2025 inflation rate.
Data released by the Philippine Statistics Authority (PSA) showed that inflation accelerated to 1.8 percent in December 2025 from 1.5 percent in November, driven by faster price increases in heavily weighted food and non-alcoholic beverages, as well as clothing and footwear.
The average inflation rate for 2025 stood at 1.7 percent, below the BSP’s 2 percent to 4 percent target band.
Earlier, the BSP had projected December 2025 inflation to fall within a range of 1.2 percent to 2 percent.
BSP Governor Eli Remolona said during a briefing at the weekly Tuesday Club meeting of journalists and public relations practitioners at the EDSA Shangri-La in Mandaluyong City that the December inflation figure “is a welcome number.” He added that monetary authorities expect inflation to accelerate further this year and move within the central bank’s 2 percent to 4 percent target range.
In a separate statement, the BSP said its policy-making Monetary Board “noted that the outlook for domestic economic growth has weakened further.”
“Business sentiment has continued to decline on governance concerns and uncertainty over global trade policy. Nevertheless, domestic demand is expected to rebound gradually as the effects of monetary policy easing work its way through the economy and public spending improves,” it said.
“On balance, the Monetary Board views the monetary policy easing cycle as nearing its end. Any further easing is likely to be limited and guided by incoming data.”
Meanwhile, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said in a report that inflation is expected to “remain at or slightly below 2 percent possibly up to February 2026 and at least 2-3 percent from March 2026 onwards.”
He noted that a “0.9 percent inflation in July 2025 could already be the bottom amid higher CPI (consumer price index) base/denominator effects back then.”
Ricafort added that inflation this year is projected to average 3.2 percent, which “could still justify/support future local policy rate cut/s that would match future (US) Fed (Federal Reserve) rate cuts in 2026 (could realistically happen in the latter part of 2026, as early as June 2026, based on the latest Fed Funds Futures).”
PNA PHOTO