Inflation forecasts mixed for January

Inflation likely hovered between 2.6 and three percent last month, a poll of leading economists showed, although most expected it to edge lower, providing relief to consumers after three consecutive months of increase in the consumer price index (CPI).

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Sarah Tan, an economist from Moody's Analytics, said inflation could ease to 2.7 percent in January from 2.9 percent in December last year.

"Price pressures will come from the food, fuel and water categories. Food inflation for January will still capture the toll of late 2024 storms," Tan said.

"Flood damage knocked food production in the final months of 2024, stoking inflation. These upward price pressures are expected to linger into the opening month of the new year," she added.

Meanwhile, she said the utilities sector would see mixed movements, with lower electricity generation charges offset by rising domestic fuel costs. Water rates were also revised upwards as of Jan. 1, adding pressure to utility bills throughout the year.

"Across 2025, we expect inflation to remain within the BSP's two to four percent target range. This will support further monetary policy easing in the Philippines, reducing the pressure on the budgets of households and businesses," she said.