Manila, Philippines – Inflation, or the pace at which consumer prices rise, sped to 2 percent in January – its fastest in 11 months – cementing bets that the Bangko Sentral ng Pilipinas (BSP) will soon end the era of easy cash.
January’s inflation print topped market forecasts and December’s 1.8 percent, but fell within the central bank’s forecast range of 1.4 to 2.2 percent, according to data released by the Philippine Statistics Authority on Thursday, Feb. 5.
The full-year target is 3 percent, give or take a percentage point.
Housing and utility prices rose to levels not seen since late 2024, while dining out has also been costlier, suggesting either domestic demand typical of the holiday season had extended past December or raw materials like imported fuel became more expensive.
“Malaki ang weight kasi ng housing rentals sa ating housing, water, electricity, gas and other fuels,” National Statistician Claire Dennis Mapa told a press briefing on Thursday.
“Ito yung commodity group kung saan nandyan ang renta… nasa 21.4 percent ang weight sa basket,” he said.
[TRANSLATION: Housing rentals are a heavyweight in the housing, water, gas, and other fuels – this is the commodity group under which rents are categorized… accounting for 21.4 percent of the basket.]
Still, the central bank thinks the rebound of domestic demand would be “gradual” with sentiment remaining weak – a fallout from the wide-scale corruption scandal and partly because uncertainties over global trade policy linger.
“The Monetary Board noted that the outlook for domestic economic activity has weakened further,” the BSP said in a statement, even as it pointed out that cheaper borrowing costs should work their way through the economy while a revival in public spending should provide some support.
Still, the central bank’s rhetoric has become less dovish, signaling an unwinding of its easing cycle, which began in July 2024.
“On balance, the Monetary Board sees the monetary policy easing cycle as nearing its end,” read the statement released on Thursday.
The policymaking body next meets on Feb. 19 to review interest rates.
