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Philippines Inflation December 2023

Philippines: Inflation falls to over one-year low in December

Inflation edged down to 3.9% in December, following November’s 4.1%. December’s reading represented the lowest inflation rate since February 2022 and marked the return of inflation within the Central Bank’s 2.0–4.0% target for the first time since March 2022. Looking at the details of the release, price pressures for housing and utilities declined, outweighing stable price growth for food and a rebound in transport costs.

Additionally, annual average inflation fell to 6.0% in December (November: 6.3%).

Lastly, consumer prices increased a seasonally adjusted 0.10% over the previous month in December, swinging from November’s 0.01% drop.

UOB analysts Julia Goh and Loke Siew Ting commented on the outlook:

“We maintain our view that this disinflation and back-to-target trend will proceed through the greater part of 2024, except for the Apr-Jul period due to the adverse impact of El Nino and other price adjustments at the local front. […] On the monetary policy front, the latest inflation outturns, inflation expectations and US Fed’s interest rate rhetoric reinforce our call for BSP to maintain status quo on policy rates until mid-2Q24.”

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