INFLATION likely steadied in January with easing utility and food costs having helped offset pressures from fuel price adjustments, analysts said.
The median forecast for consumer price growth in a Manila Times poll was 1.8 percent, within the Bangko Sentral ng Pilipinas’ (BSP) estimate of 1.4 to 2.2 percent for the month and unchanged from the December result.
If realized, it would mark the 11th consecutive month of inflation falling below the central bank’s 2.0- to 4.0-percent target. Data for January will be released by the Philippine Statistics Authority this Thursday.
Continued below-target inflation, along with weaker-than-expected economic growth, could prompt monetary authorities to again cut key interest rates later this month.
With the lowest forecast of 1.5 percent, Sun Life Investment Management and Trust Corp. economist Patrick Ella said that cheaper meat and vegetables, as well as lower electricity costs, likely offset an increase in rice prices.
For Chinabank Research, HSBC Global Research economist Aris Dacanay and Union Bank of the Philippines Ruben Carlo Asuncion, inflation could have eased to 1.7 percent.
“The deceleration was partly driven by a reversal in vegetable prices after surging the prior month due to unfavorable weather,” Chinabank Research said.
Lower electricity rates were also seen in Meralco (Manila Electric Co.)‑serviced areas,” it added.
“These downward pressures, however, were tempered by month-on-month gains in prices of rice, fish, fruits, cooking oil, meat and eggs, as well as higher LPG (liquefied petroleum gas) and fuel prices,” it added.
Dacanay, meanwhile, said price pressures from key volatile goods likely eased, leading to inflation decelerating.
“There was a substantial rollback in retail fuel prices in the second half of the month despite global oil prices rising slightly. Food prices, particularly vegetables, also moderated after last month’s surge,” he said.
“Supply conditions in food might have normalized after a month of favorable weather,” he added.
Asuncion, however, said this could be the “final phase of the exceptionally soft price environment that characterized much of 2025.”
“The unusually low food and rice inflation seen last year — supported by favorable weather conditions and the easing of international trade restrictions — has now largely dissipated,” he said.
“As a result, we anticipate headline inflation to rise back above two percent starting February, as rice deflation narrows and food prices begin normalizing from last year’s very low base.”
Meanwhile, Bank of the Philippine Islands senior economist Emilio Neri said inflation could have stayed steady at 1.8 percent.
“The monthly uptick was mainly driven by higher fish and rice prices, alongside elevated global oil prices and LPG rate hikes,” he said.
“These upward pressures were partly offset by lower Meralco rates and cheaper vegetable prices, helping cap the overall inflation print.”
On the other hand, Emmanuel Lopez of the University of Santo Tomas Graduate School said January inflation could have ended slightly higher at 1.9 percent.
A slowdown in consumer spending likely tempered the rise, he added.
Philippine National Bank economist Alvin Arogo and Moody’s Analytics economist Sarah Tan, meanwhile, said inflation could have returned to the bottom end of the target at 2.0 percent.
The rate could increase in the coming months, Arogo said, “due to wage hike pass-through, utility rate adjustments and unfavorable rice base effect,” peaking at 3.9 percent in the second quarter.
For Tan, meanwhile, “the pace of rice price declines is likely to slow as imports resumed after the government’s import restriction expired in December.”
“At the same time, a weaker peso has pushed up import costs, limiting further disinflation in rice prices in January.”
With the highest forecast of 2.5 percent, Pantheon Macroeconomics economist Miguel Chanco said this would have been caused by increased food prices.
“It looks like there’s been a spike in egg prices in some parts of the country,” he said.
The BSP late on Friday said tagged higher food and fuel prices, along with utility costs, “sin” tax adjustments and a weaker peso as possibly having pressured inflation.
“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,” it said in a statement.
“These pressures could be partly offset by lower electricity charges in Meralco-serviced areas and stabilizing vegetable prices,” it added.
“The BSP will continue to monitor domestic and international developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy.”
The central bank’s policymaking Monetary Board will hold its first meeting for 2026 on Feb. 19. Many analysts expect it to announce another 25-basis-point rate hike with inflation still below target and with 2025 economic growth having slumped to 4.4 percent from 5.7 percent a year earlier.
