THE Bangko Sentral ng Pilipinas (BSP) on Tuesday, Jan. 6, 2026, said inflation outlook remains benign and expectations remain well anchored even with the uptick in the December 2025 inflation rate.
Data released by the Philippine Statistics Authority (PSA) on Tuesday showed that the rate of price increases accelerated to 1.8 percent in December 2025 from month-ago’s 1.5 percent due to a faster uptick of the heavily-weighted food and non-alcoholic beverages and the clothing and footwear indices.
The average rate for the year stood at 1.7 percent, below the BSP’s 2 percent to 4 percent target band for 2025.
BSP earlier projected the December 2025 inflation rate to range between 1.2 percent to two percent.
BSP Gov. Eli Remolona, in a briefing during the weekly Tuesday Club meeting of journalists and press relations practitioners at EDSA Shangri-La in Mandaluyong City, said the December 2025 inflation rate “is a welcome number”, and added that monetary officials project inflation to accelerate further this year to between the central bank’s 2 percent to 4 percent target band.
BSP, in a statement, 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.”
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, in a report, forecasts inflation to “remain at or slightly below two percent possibly up to February 2026 and at least two to three percent from March 2026 onwards.”
He said a “0.9 percent inflation in July 2025 could already be the bottom amid higher CPI (consumer price index) base/denominator effects back then.”
He added inflation this year is seen to average at 3.2 percent, and this “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)