Philippines Inflation January 2020


Philippines: Disruptions from volcano eruption and typhoons push up inflation in January

February 5, 2020

Consumer prices rose 0.57% over the previous month in January, down from the 0.66% increase in December. Higher prices for food and non-alcoholic beverages; alcoholic beverages and tobacco; housing, water, gas, and other fuels; and transport drove the uptick. Supply disruptions caused by the Taal volcano eruption paired with crop damages from typhoons drove sharp price increases in January. Moreover, an excise tax hike implemented 1 January on alcohol, tobacco and fuels also attributed to the month-on-month rise.

Inflation climbed to 2.9% in January from 2.5% in December, approaching the midpoint of the Central Bank’s target band of 2.0%–4.0% and marking an eight-month high. Core inflation, which excludes volatile food and energy prices, climbed to 3.3% in January from 3.1% in January. On the other hand, annual average inflation ticked down to 2.4% from 2.5%.

This year, inflation should fluctuate around current levels, supported by stronger economic activity, the pass-through from the Bank’s monetary policy easing, and the implementation of several new excise taxes. Moreover, volatility in oil markets poses a risk to the inflation outlook.

FocusEconomics Consensus Forecast panelists expect inflation to average 2.9% in 2020, which is unchanged from last month’s projection. For 2021, panelists see average inflation of 3.2%.

Author:, Economist

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Philippines Inflation Chart

Philippines Inflation January 20 20 0

Note: Annual and monthly variation of consumer price index in %.
Source: Central Bank of the Philippines (BSP) and FocusEconomics calculations.

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