Philippines Inflation January 2021


Philippines: Inflation hits two-year high in January

February 5, 2021

Consumer prices increased a seasonally-adjusted 1.27% over the previous month in January, following December's 0.88% rise. January’s upturn was chiefly driven by a quicker growth in prices for food and non-alcoholic beverages.

Inflation came in at 4.2% in January, up from December’s 3.5% and marking the highest reading since January 2019. Accordingly, annual average inflation edged up to 2.7% in January from December’s 2.6%. Lastly, core inflation ticked up to 3.4% from December’s 3.3%.

Commenting on the inflation outlook, Julia Goh and Loke Siew Ting, economists at UOB, said:

“Going forward, we expect the nation’s inflation to persist its uptrend and stay above BSP’s target range (2.0%-4.0%) in 1H21 before retreating below the 4.0% level in 2H21. This comes as most supply-pushed factors (particularly ASF outbreak, pandemic, and rising global oil prices) are less likely to dissipate in the immediate term, prompting the government to introduce some short-term price relief measures including imposing price caps on pork and poultry products as well as allowing pork imports.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.1% in 2021, which is up 0.3 percentage points from last month’s forecast, and to average 3.0% in 2022.


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Philippines Inflation Chart

Philippines Inflation January 2021

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

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