Despite potential price increases in some sectors, the Bangko Sentral ng Pilipinas (BSP) anticipates that the rate of increase in consumer prices will remain controlled and within the desired range this month.
In a statement on Friday, Dec. 27, the central bank projected that December 2024 inflation may settle within the range of 2.3 percent to 3.1 percent, from 2.6 percent in November.
The BSO’s latest outlook is below the 3.9 percent inflation recorded in December last year.
If realized, the country's full-year inflation would average 3.2 percent, well within the Marcos administration's target of 2.0 percent to 4.0 percent for 2024.
In 2023, inflation averaged 6.0 percent, faster than the 5.8 percent recorded in the previous year.
"Upward price pressures in December could stem from increased prices of major food items due to supply disruptions from recent weather disturbances, as well as higher electricity rates and petroleum prices," the BSP said.
However, the BSP expects these to be partially offset by lower prices of agricultural commodities like rice.
"The BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making," the central bank said.
The Philippine Statistics Authority will announce December's inflation rate on Jan. 7, 2025.
The BSP also announced on Friday that it will retain its current inflation target of 2.0 percent to 4.0 percent until the end of 2028, saying the range aligns with the medium-term goal for price stability, considering the current economic structure and macroeconomic outlook.
Despite potential upside risks, the BSP expects a manageable inflation outlook due to the projected aggregate demand and supply-side conditions.
Recently, the BSP lowered its key interest rate by 25 basis points to 5.75 percent, marking the third consecutive cut. However, the central bank indicated that further easing next year might be more gradual as inflation continues to be a concern.
The BSP emphasized the need for ongoing monitoring and proactive measures to address potential domestic and external shocks. It also reaffirmed its commitment to maintaining price stability through appropriate monetary policy.