‘January inflation may settle within 1.4-2.2% range’

February 1, 2026 | 12:00am

MANILA, Philippines — Inflation in January is expected to remain subdued, with the Bangko Sentral ng Pilipinas (BSP) projecting the consumer price index to settle within the range of 1.4 to 2.2 percent, reflecting a balance of emerging price pressures and easing cost factors.

In its month-ahead inflation forecast, the central bank said upward pressures could come from higher prices of key food items such as rice and fish, alongside increased domestic fuel costs.

Additional price pressures could also stem from the annual adjustment in excise taxes on alcohol and tobacco, higher water and toll rates as well as the depreciation of the peso.

These factors, however, may be partly offset by lower electricity charges in areas serviced by Manila Electric Co. and stabilizing vegetable prices, the BSP said.

The forecast suggests inflation could either edge up or ease slightly from December’s 1.8 percent print, underscoring continued uncertainty in price dynamics at the start of the year.

The Philippine Statistics Authority will release the January inflation data on Feb. 5.

The data release follows a year of notably soft inflation, with the Philippines closing 2025 with average inflation easing to 1.7 percent, its lowest level in nine years and well below the government’s two to four percent target band.

The central bank said it would continue to closely monitor both domestic and global developments that could affect the inflation and growth outlook, reiterating its commitment to a data-dependent approach to monetary policy.

The BSP reduced the country’s key interest rate by 25 basis points to 4.50 percent at its policy meeting on Dec. 11. The BSP has so far reduced borrowing costs by 200 basis points since it began its easing cycle in August 2024.

BSP Governor Eli Remolona Jr. earlier said the possibility of one more rate cut under the current easing cycle remains uncertain.

Asked if the weaker-than-expected economic growth in the fourth quarter of 2025 would justify a rate cut as early as February, Remolona had said: “It would help us decide to cut. But it’s not the only factor.”

The BSP chief had also rejected the idea of pre-committing to just one more rate cut.

“It still depends on the data. We decide one meeting at a time,” he said.

The Philippine economy grew by just three percent in the fourth quarter of 2025, the lowest level since 2011 excluding the pandemic, bringing average expansion to 4.4 percent for the full-year. This was lower than the government’s 5.5 to 6.5 percent target.