Consumer prices likely accelerated in January as higher costs for food staples and fuel threatened to push price growth back into the central bank’s target range, potentially ending a year-long streak of below-target readings.

The Bangko Sentral ng Pilipinas (BSP) estimated on Friday, Jan. 30, that the consumer price index likely rose between 1.4 percent and 2.2 percent last month.

A print at the upper end of that range would return inflation to the government’s two percent to four percent formal target band for the first time since February 2025. The Philippine Statistics Authority is scheduled to release the official data on Thursday, Feb. 4.

“Upward price pressures may stem from higher prices of major food items such as rice and fish, increased domestic fuel costs, the annual adjustment in excise taxes for alcohol and tobacco, higher water and toll rates, as well as the peso depreciation,” the BSP said.

“These pressures could be partly offset by lower electricity charges in [Manila Electric Co.] Meralco-serviced areas and stabilizing vegetable prices,” the BSP added.

Local and external developments will be constantly monitored, the BSP said, helping the monetary authorities decide on their future policy moves.

Both domestic and foreign banks have penciled in inflation to have picked up, but still remain on the lower end of the target band.

“Our baseline inflation forecast is two percent for January,” said Alvin Joseph A. Arogo, first vice president and chief economist at Philippine National Bank (PNB). Arogo cited different drivers of faster inflation in January.

“We believe that faster inflation in the coming months is likely due to wage hike pass-through, utility rate adjustments, and an unfavorable rice base effect,” said Arogo.

While Arogo projects inflation to settle at an average rate of 3.3 percent this year, the economist expects it to peak in the second quarter of 2026 at an average pace of 3.9 percent, reaching the ceiling of the goal.

Meanwhile, Australia and New Zealand Banking Group (ANZ) has forecast inflation to have eased to 1.6 percent from 1.8 percent in December 2025. This was attributed to the “persistent” drop in rice costs, keeping a lid on food prices.

ANZ agreed with the BSP’s forecast that easing power costs may have contributed to subdued inflation.

Holding a different outlook, Singapore-based DBS Bank Ltd. expects consumer prices to have increased by 1.9 percent in January, faster than the pace seen in the previous month.

Standing in the middle of ANZ’s and DBS’ assumptions is Reyes Tacandong & Co. senior adviser Jonathan Ravelas’ view that inflation likely steadied at 1.8 percent in January. He echoed the central bank’s cited factors that drove the steady price upswings.