The Philippines saw its annual inflation accelerate for the third consecutive month in December, driven by higher food and utility prices, according to the Philippine Statistics Authority.
Inflation reached 2.9% in December, surpassing the 2.6% forecast in a Reuters poll and higher than November’s 2.5%. This brought the country’s average inflation rate for 2024 to 3.2%, comfortably within the Bangko Sentral ng Pilipinas’ (BSP) target range of 2% to 4%. It marks the first time since 2021 that the inflation goal has been met.
Core inflation, which excludes volatile food and energy prices, also rose to 2.8% in December, up from 2.5% the previous month.
The central bank recently reduced its key interest rate by 25 basis points to 5.75%, signaling that further gradual rate cuts could occur this year to balance inflation concerns and support economic growth. A Reuters poll suggests a possible additional 25-basis point cut each quarter in 2025, potentially lowering the rate to 5.00% by September.
“The Monetary Board will maintain a measured approach to policy easing to ensure price stability conducive to sustainable growth and employment,” the BSP stated.
