PH inflation slowed to 2.8% in January

People walk along a street market in Quiapo, in Manila, Philippines, July 11, 2023. REUTERS/Eloisa Lopez/File Photo

MANILA,  Philippines  —Inflation eased to 2.8 percent in January, putting price growth well within the government’s 2 to 4 percent target range.

Last month’s reading was softer than the 3.9 percent recorded in December, the Philippine Statistics Authority reported Tuesday.

It also hit the lower-end of the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 2.8 to 3.6 percent for January and the slowest since October 2020, when the rate was at 2.3 percent.

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While there were less upward price pressures last month, especially on key food items, much of the milder inflation in January was due to so-called “base effects”.  This means the slower price uptick last month was magnified because it was compared with year-ago level, when inflation was at a high of 8.7 percent.

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Nevertheless, the within-target inflation rate and the forecast-beating economic growth in 2023 would lessen the pressure on the BSP to cut rates sooner.

Despite inflation easing back to within the BSP’s target in December last year after hovering above that range for 20 months, the BSP said it deemed it necessary to “keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.”