BSP sees January inflation surging past 3%

MANILA, Philippines — There’s a possibility that inflation sped past 3 percent in January due to higher oil prices and lingering food supply problems triggered by the onslaught of typhoons that battered the country late last year, the Bangko Sentral ng Pilipinas (BSP) said.

In a statement, the BSP said inflation, as measured by the consumer price index (CPI), might have settled between 2.5 and 3.3 percent in January.

The upper-limit of the central bank’s forecast range suggested that there is potential for inflation to surpass the 2.9 percent print that was recorded in December.

READ: Inflation speeds up to 2.9% in December 2024 — PSA

Nevertheless, the projection means that while inflation might have quickened in the first month of 2025, the uptick was only mild and did not cause a breach of the 2 to 4 percent target range of the BSP.

Explaining its forecast, the central bank said the upward price pressures in January stemmed from higher petroleum prices. Data from the energy department showed oil companies adjusted local pump prices four times last month, three of which were increases.

Measured approach

The BSP also said the effects of destructive typhoons that hit the country from mid-October to early November last year continued to be felt last month in the form of higher prices of major food items.

Other major sources of upward price pressures last month were the higher water rates in the National Capital Region that took effect this year and the scheduled increase in sin taxes.

But the BSP said the lower prices of rice—a staple food of Filipino households—and cheaper electricity rates helped temper the cost increases in other key commodities.

The Philippine Statistics Authority will release the official January CPI data on Feb. 5, which will be one of the key considerations for the BSP in deciding its next policy step once the powerful Monetary Board convenes on Feb. 13.

The BSP capped 2024 with a third consecutive quarter-point reduction to the policy interest rate to 5.75 percent. —Ian Nicolas P. Cigaral