Inflation in the Philippines accelerated to 2% in January, marking its highest level in nearly a year as rising housing and utility expenses pushed consumer prices upward. The latest data showed inflation climbed from 1.8% in December, landing at the lower boundary of the Bangko Sentral ng Pilipinas’ 2% to 4% target range for the first time since early 2025.
State statisticians attributed the faster inflation pace mainly to higher costs in housing, water, electricity, gas, and other fuels. The sector recorded an inflation rate of 3.3%, increasing from 2.5% in the previous month, with electricity charges and rental rates among the key contributors to the price surge.
Despite the increase, inflation remained within the central bank’s projected range, indicating that price growth remains manageable. The latest figure also exceeded economists’ median projection, reflecting stronger-than-expected cost movements at the start of the year.
Underlying inflation pressures continued to expand. Core inflation, which removes volatile food and energy prices to better measure long-term price trends, rose to 2.8% in January from 2.4% in December. The increase suggests that price adjustments are spreading across more sectors beyond essential commodities.
The inflation acceleration arrives alongside signs of softer economic growth, a combination that could influence monetary policy decisions. The Bangko Sentral ng Pilipinas previously reduced its benchmark interest rate by 200 basis points to 4.5% to support economic activity. Analysts noted that the faster inflation pace may help guide the central bank’s evaluation of whether additional rate cuts are appropriate.
The BSP’s next policy rate-setting meeting is scheduled for February 19, when officials are expected to assess inflation trends, economic performance, and global conditions before determining their next move.
January’s inflation data highlights the growing influence of service and utility costs on household spending, even as food and transport prices showed weaker upward pressure. The latest figures underscore the need for close monitoring of price movements as authorities balance economic support with maintaining price stability.
