Inflation higher at 2.9 percent in December, averages within target in 2024

Headline inflation in December rose to 2.9 percent year-on-year from 2.5 percent in November and was within the BSP's forecast range of 2.3 to 3.1 percent for the month. The resulting full-year average inflation rate for 2024 of 3.2 percent, is within the Government's target range of 2-4 percent for the year. On a month-on-month seasonally adjusted basis, headline inflation rose to 0.5 percent in December from 0.2 percent in the previous month. Similarly, core inflation increased to 2.8 percent in December from 2.5 percent in November.

Non-food inflation picked up in December owing mainly to higher inflation for housing, water, electricity, gas and other fuels as well as transport. Meanwhile, year-on-year food inflation held steady in December. Inflation for vegetables and meat increased, reflecting the effects of recent typhoons. However, this was offset by the slowdown in rice inflation as a result of ample domestic supply from the main harvest season and import arrivals levied with lower tariffs.

The latest inflation outturn is consistent with the BSP's assessment of a manageable inflation environment over the policy horizon. Nonetheless, the monetary authority will continue to closely monitor emerging upside risks to inflation. Looking ahead, the BSP will maintain a measured approach to monetary policy easing to ensure price stability conducive to a balanced and sustainable growth of the economy and employment. (BSP)