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Philippines Inflation January 2024

Philippines: Inflation drops to lowest level since October 2020 in January

Inflation dropped to 2.8% in January from December’s 3.9%. January’s figure marked the weakest inflation rate since October 2020. The decline was broad-based, with lower price pressures recorded for food and non-alcoholic beverages, clothing and footwear, and housing and utilities. Moreover, prices for transport dropped.

Annual average inflation fell to 5.5% in January (December: 6.0%).

Finally, consumer prices fell a seasonally adjusted 0.14% over the previous month in January, contrasting the 0.10% rise logged in December. January’s result marked the sharpest fall in prices since October 2023.

ING analyst Nicholas Mapa commented on the release:

“Despite the slide in headline inflation, we are fully expecting the Bangko Sentral ng Pilipinas (BSP) to retain their hawkish tone and promise to keep their policy stance “sufficiently tight” for the time being. BSP Governor Remolona indicated that he was expecting inflation to slide in Q1 before accelerating sharply in Q2, justifying his outlook for rates to stay higher for longer. […] If we continue to see inflation moderate well into 2Q, we do expect BSP to begin to change their tune to signal a pivot, possibly by June.”

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