Manila: The Bangko Sentral ng Pilipinas (BSP) on Tuesday said inflation outlook remains benign and expectations remain well anchored even with the uptick in the December 2025 inflation rate. Data released by the Philippine Statistics Authority (PSA) during the day showed that the rate of price increases accelerated to 1.8 percent in December 2025 from the previous month's 1.5 percent due to a faster uptick of the heavily-weighted food and non-alcoholic beverages and the clothing and footwear indices.
According to Philippines News Agency, the average rate for the year stood at 1.7 percent, below the BSP's 2 percent to 4 percent target band for 2025. BSP had earlier projected the December 2025 inflation rate to range between 1.2 percent to 2 percent.
BSP Governor Eli Remolona, in a briefing during the weekly Tuesday Club meeting of journalists and press relations practitioners at EDSA Shangri-La in Mandaluyong City, stated that the December 2025 inflation rate 'is a welcome number'. He added that monetary officials project inflation to accelerate further this year to fall within the central bank's 2 percent to 4 percent target band.
BSP, in a statement, said its policy-making Monetary Board "noted that the outlook for domestic economic growth has weakened further." The statement highlighted that business sentiment has continued to decline due to governance concerns and uncertainty over global trade policy. However, it also noted that domestic demand is expected to rebound gradually as the effects of monetary policy easing work its way through the economy and public spending improves.
The Monetary Board views the monetary policy easing cycle as nearing its end, indicating that any further easing is likely to be limited and guided by incoming data.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a report, forecasts inflation to 'remain at or slightly below 2 percent possibly up to February 2026 and at least 2-3 percent from March 2026 onwards.' He mentioned that a '0.9 percent inflation in July 2025 could already be the bottom amid higher CPI (consumer price index) base/denominator effects back then.'
Ricafort added that inflation this year is seen to average at 3.2 percent, which 'could still justify/support future local policy rate cut/s that would match future (US) Fed (Federal Reserve) rate cuts in 2026 (could realistically happen in the latter part of 2026, as early as June 2026, based on the latest Fed Funds Futures).'
