Filtered By: Money
Money

PH’s inflation rate flat at 2.9% in January 2025


PH’s inflation rate flat at 2.9% in January 2025

The Philippines’ inflation rate in January 2025 remained at the same level as December 2024, still well within the government’s target band, the Philippine Statistics Authority (PSA) reported on Wednesday.

At a press conference, PSA chief and National Statistician Claire Dennis Mapa said the country’s overall inflation —which measures the rate of increase in the prices of consumer goods and services— stood at 2.9%.

Last month’s print was the same level seen in the previous month.

January’s headline inflation fell within the Marcos administration’s target range of 2% to 4%.

The unchanged inflation print seen in the first month of 2025 was due to the increase in Food and Non-Alcoholic Beverages (3.8% from 3.4%), Alcoholic Beverages and Tobacco (3.5% from, 3.1%), and Transport (1.1% from 0.9%) which was offset by the slowdown in inflation rates in the following commodity groups:

  • Clothing and footwear - 2.3% from 2.4%
  • Housing, water, electricity, gas and other fuels - 2.2% from 2.9%
  • Furnishings, household equipment and routine household maintenance - 2.6% from 2.7%
  • Recreation, sport and culture - 2.4% from 2.5%
  • Education services - 4.2% from 4.3%
  • Restaurants and accommodation services - 3.2% from 3.8%
  • Personal care, and miscellaneous goods and services - 2.8% from 2.9%

Nonetheless, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the flat inflation rate in January was “a positive indicator of the government’s commitment to ensure more stable prices in line with the targets of the Philippine Development Plan (PDP) 2023-2028.”

Likewise, the Bangko Sentral ng Pilipinas (BSP) said that last month’s inflation rate was within its forecast range of 2.5% to 3.3%.

“The latest inflation outturn is consistent with the BSP's assessment that inflation will remain anchored to the target range over the policy horizon. The rice tariff reduction and negative base effects are expected to support disinflation,” the BSP said.

Food inflation

Food inflation, which tracks the price movements of food items in a "basket" commonly purchased by households, rose to 4% from 3.5% month-on-month.

Mapa said that despite the contraction in rice inflation at 2.3% from an increase of 0.3% in December 2024, the increase in three food groups contributed to the increase in food inflation.

In particular, inflation rate for vegetables, tubers, plantains, cooking bananas and pulses surged to 21.1% from 14.2% in December 2024, primarily driven by tomatoes which rose to 155.7%.

The vegetables group had a weight of 2.8% to the food basket, according to the PSA chief.

Also contributing to the uptrend of food inflation was the increase in fish and other seafood at 3.3% in January 2025 from 1.0% in the previous month and adding 5.7% weight to the overall food basket.

The inflation rate for meat and other parts of slaughtered land animals, likewise, grew to 6.4% from 4.9% month-on-month.

Balisacan said that reducing food inflation remains one of the government’s most pressing priorities.

“The Philippine Atmospheric, Geophysical, and Astronomical Services Administration has issued an early warning to agencies to remain vigilant about the arrival of typhoons in the first half of the year, noting that four to ten tropical cyclones are expected to develop from February to July 2025,” the NEDA chief said in a statement.

“The DA is implementing various interventions to mitigate the impact of La Niña conditions, including the construction and rehabilitation of water management systems, and the provision of agricultural inputs such as submergence-tolerant and early maturing seed varieties, animals, and adoption of diversified farming systems,” added Balisacan.

The DA has also been ramping up its ongoing vaccination campaign against African Swine Fever and working closely with the Food and Drug Administration to expedite the approval of the Avian Influenza vaccine.

“Efforts are underway to secure P300 million to fund the vaccine testing, which is expected to begin in March 2025,” the NEDA chief said.

The country’s chief economist added that the Maharlika Investment Corporation (MIC) and Department of Energy expect that the government’s investment in the transmission segment of the power industry will help reduce electricity costs for Filipinos through lower transmission charges.

“President Marcos has emphasized that there should be no room for complacency as we work toward our targets this year and the medium-term,” Balisacan said.

“We remain vigilant and proactive in anticipating and addressing future developments, whether upside or downside risks, unforeseen or otherwise. Resiliency of our agri-food systems will be one of our most important goals to ensure low and stable prices for all Filipinos,” he said.

The BSP, meanwhile, said that the balance of risks to the inflation outlook continues to lean to the upside due largely to potential upward adjustments in transport fares and electricity rates.

“The impact of lower import tariffs on rice remains as the main downside risk to inflation. Domestic demand is likely to remain firm but subdued. Private domestic spending is expected to be supported by easing inflation and improving labor market conditions. However, uncertainty in the external environment could temper economic activity and market sentiment,” the central bank said.

The BSP added that it will continue to closely monitor the emerging developments and risks to the inflation outlook.  

“This will be discussed in the upcoming monetary policy meeting on February 13, 2025.  Looking ahead, the Monetary Board will maintain a measured approach to monetary policy easing to ensure price stability conducive to sustainable economic growth and employment,” it said. — AOL/RSJ, GMA Integrated News