Inflation unchanged at 2.9%

INFLATION was unchanged last month as declining rice prices offset modest increases in utility and food costs, the Philippine Statistics Authority (PSA) reported on Wednesday.

Consumer price growth steadied at 2.9 percent, the same as in December. It fell within the Bangko Sentral ng Pilipinas’ (BSP) 2.5- to 3.3-percent estimate for the month and the full-year goal of 2.0-4.0 percent target, but was slightly higher than the year ago 2.8 percent.

Analysts polled by The Manila Times had expected a 2.8-percent result.

Core inflation, which excludes volatile food and energy items, slowed to 2.6 percent from 2.8 percent last December and 3.8 percent a year earlier.

The inflation figure, along with 2024’s lower-than-expected economic growth of 5.6 percent, will be considered by the BSP when it holds its first rate-setting meeting for the year next week.

In a statement on Wednesday, the central bank said it would maintain a “measured approach” to policy easing to “ensure price stability conducive to sustainable economic growth and employment.”

“The BSP will continue to closely monitor the emerging developments and risks to the inflation outlook,” it added.

The central bank has said that inflation risks remain tilted to the upside, mainly due to possible fare hikes and higher electricity rates. Lower rice import tariffs, on the other hand, could help ease inflation.

Rice inflation contracted in January to -2.3 percent, the PSA reported, the lowest since June 2020’s -2.8 percent.

“[B]ased on the current trend in prices, our expectation based on the computation is that we’ll likely see negative inflation for rice at least until July,” National Statistician Undersecretary Dennis Claire Mapa told a briefing.

The average price of regular milled rice was said to have fallen to P48.25 per kilo from P49.65. Well-milled rice also and special rice edged lower to P54.14 from P54.91 and P63.13 from P63.90, respectively.

Food inflation, however, rose to 4.0 percent from December’s 3.5 percent due to an increase in prices of vegetables, tubers, plantains, cooking bananas and pulses to 21.1 percent from 14.2 percent.

“[F]ood and non-alcoholic beverages, which registered an inflation rate of 3.8 percent in January 2025, contributed 50.3 percent or 1.5 percentage points, to the overall inflation during the month,” the PSA said in a statement.

Other main contributors included utility and fuel prices with 16.5 percent share, or 0.5 percentage point, and restaurants and accommodation services with 10.8 percent share, or 0.3 percentage point, it added.

Mapa said the risks to inflation were still concentrated in three major commodity groups within the food basket: meat, fish and vegetables, particularly tomatoes.

Tomatoes had a significant impact, he noted, having contributed 0.4 percentage points to the overall inflation rate.

Socioeconomic Planning Secretary Arsenio Balisacan, meanwhile, said that addressing lingering food price concerns remained the government’s priority.

“President [Ferdinand] Marcos [Jr.] has emphasized that there should be no room for complacency as we work toward our targets this year and the medium-term,” he said.

“We remain vigilant and proactive in anticipating and addressing future developments, whether upside or downside risks, unforeseen or otherwise. Resiliency of our agri-food systems will be one of our most important goals to ensure low and stable prices for all Filipinos.”