Manila: The steady inflation rate will allow the Bangko Sentral ng Pilipinas (BSP) to further reduce interest rates to boost consumer spending and economic growth, Finance Secretary Ralph Recto said. The Philippine Statistics Authority reported on Wednesday that the country's headline inflation remained at 2.9 percent. Core inflation, which excludes selected volatile food and energy items, also eased to 2.6 percent in January from 2.8 percent in December 2024.

According to Philippines News Agency, Recto emphasized that this development is a strong indicator of the government's commitment to maintaining price stability, offering the BSP increased flexibility to reduce interest rates further. "Lower interest rates mean cheaper borrowing costs for our consumers and businesses. This will provide greater purchasing power for our people and stronger momentum for investments and growth," he added.

Last year, the central bank's Monetary Board reduced policy rates by a total of 75 basis points. The first meeting of the Monetary Board on the monetary policy stance this year will be held on Feb. 13. Recto also outlined the government's ongoing efforts to ensure stable food prices, particularly rice.

In January, rice inflation showed a significant improvement, registering a disinflation of -2.3 percent, down from 0.8 percent in December 2024, and a sharp decline from 22.6 percent for the same month a year ago. Recto assured that the government will remain proactive in implementing interventions to maintain stable and affordable rice prices.