Inflation speeds up to 2.9% in December 2024 — PSA

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Inflation quickened to 2.9 percent in December, faster than the 2.5 percent recorded in November on the back of higher prices of housing and energy, the Philippine Statistics Authority said on Tuesday.

The December print was faster than the 2.7 percent estimate of analysts polled by the Inquirer last week.

But the reading was nevertheless within the 2.3 to 3.1 percent forecast range of the Bangko Sentral ng Pilipinas (BSP) for the month.

READ: Inflation quickens to 2.5% in November

This brings the average price growth for 2024 to 3.2 percent, settling within the 2 to 4 percent target band of the central bank for the first time in three years.

That inflation is expected to stay benign despite the upward price pressures means the central bank has space to continue its rate-cutting cycle to boost economic growth, which significantly slowed in the third quarter of 2024.

The BSP last year delivered a total of 75-basis point (bp) cut to the key rate that banks typically use as a guide when pricing loans.

And Governor Eli Remolona Jr. had hinted at additional easing moves for this year as financial conditions are still “somewhat tight,” even floating the possibility of another rate cut at the Feb. 20 meeting of the Monetary Board.

READ: December 2024 inflation pegged at 2.7%

In a briefing with President Ferdinand Marcos Jr. on Monday, the economic managers said the country is entering 2025 in a stronger position than it was at the same time last year.

“We are seeing the fruit of our efforts in bringing down inflation within the government’s target range of 2 to 4 percent,” Remolona told the president, as quoted in a statement.

He explained that core inflation has trended downward, indicating more stable prices, and that this expected decline allowed the BSP to begin reducing its policy rate.

However, Remolona also noted that complacency is not an option because risks to inflation remain.

He said that prices of certain commodities may increase due to supply-side factors like geopolitical tensions and adverse weather conditions.

To these, President Marcos said: “It’s always good to be prepared.”

The BSP leadership vowed to continue focusing on “maintaining price stability conducive to a balanced and sustainable growth of the economy and employment.”