HIGHER utility and fuel costs pushed inflation to an 11-month high of 2.0 percent in January, the Philippine Statistics Authority (PSA) reported on Thursday.
Consumer price growth, which rose from 1.8 percent in December, exceeded the 1.8-percent median in a Manila Times poll but fell within the Bangko Sentral ng Pilipinas’ (BSP) estimate of 1.4 percent to 2.2 percent.
Core inflation, which excludes select food and energy items, picked up to 2.8 percent from 2.4 percent.
Further easing seen limited
The BSP said the outlook “continues to be benign while inflation expectations remain well anchored,” with the rate expected to settle within the target range this year and the next.
With a rate-setting meeting coming up, the central bank reiterated statements made in December that it could soon end a run of interest rate cuts.
“On balance, the Monetary Board sees the monetary policy easing cycle as nearing its end. Any further easing is likely to be limited and guided by incoming data,” the BSP said. “The Monetary Board will meet on 19 February 2026 to discuss the evolving assessment of Philippine macroeconomic prospects and their implication to monetary policy.”
The BSP’s policymaking body had tagged benign inflation and a weaker economic growth outlook when it lowered key interest rates by 25 basis points in December. The latest inflation result, along with lower-than-expected 2025 economic growth, could prompt a cut later this month.
“The Monetary Board noted that the outlook for domestic economic activity has weakened further,” the central bank said on Thursday.
“Business sentiment has continued to decline on governance concerns and uncertainty over global trade policy. Nevertheless, domestic demand is expected to rebound gradually as the effects of monetary policy easing work their way through the economy and public spending improves.”
Lower food inflation tagged
National Statistician Claire Dennis Mapa said inflation accelerated due to faster price growth of 3.3 percent in housing, water, electricity, gas and other fuels.
“This accounted for 45.9 percent of the increase in the country’s overall inflation,” he said.
Food inflation, meanwhile, slowed to 0.7 percent from 1.2 percent in December.
“The downtrend in the food inflation in January 2026 was mainly driven by the slower annual increase in vegetables, tubers, plantains, cooking bananas and pulses at 3.3 percent during the month from 11.6 percent in December 2025,” the PSA said.
Socioeconomic Planning Undersecretary Rosemarie Edillon said “fewer areas were affected by African swine flu cases, while faster withdrawals from cold storage facilities helped temper both pork and chicken price increases.”
“We see the easing of food inflation beneficial for Filipino households, particularly for lower-income families where food accounts for a larger share of expenditures,” she added.
Edillon said the government would remain vigilant against emerging upside risks, adding that it would build on the inflation gains “by sustaining efforts to support Filipino families’ purchasing power, alongside other reforms that strengthen resilience and promote long-term growth.”
“Rest assured that we are exerting all efforts to strengthen food systems, improve climate resilience and enhance governance to further support price stability and help sustain economic momentum in the months ahead.”
Food inflation gain ‘fragile’
Agriculture Secretary Francisco Tiu Laurel Jr., meanwhile, noted the drop in food inflation but said the improvement remained “fragile.”
“The numbers are encouraging, but they’re not a signal to relax,” Tiu Laurel said.
“We are looking very closely at how we manage food supply — from production to imports and distribution — because any slippage can quickly translate into higher prices that hurt consumers and weigh on overall economic activity,” he added.
Lower rice inflation, at 8.5 percent from 12.5 percent in December, was attributed by the Agriculture department to maximum suggested retail prices having been set for imports of the staple.
Slower price increases were also observed in other food items, including corn, meat, fish and seafood, and oils and fats, but stronger inflation was seen in bread and bakery products, dairy and eggs, fruits and nuts, and ready-made food.
Overall, food inflation accounted for 0.3 percentage point of the headline inflation in January, with fish and seafood, vegetables and meat cited as the biggest contributors.
Tiu Laurel said the government would continue to monitor these commodity groups as it works to keep food prices stable.
