BSP projects December inflation between 2.3%-3.1%

The Bangko Sentral ng Pilipinas (BSP) has projected the country’s December 2024 inflation rate to range between 2.3% and 3.1%, citing both upward and downward influences on consumer prices.

In a statement released on Friday, the central bank highlighted the key factors expected to drive inflation upward this month. These include higher prices of major food items due to supply disruptions caused by recent weather disturbances, along with increased electricity rates and rising petroleum prices.

However, the BSP noted that the downward trend in the prices of certain agricultural commodities, particularly rice, could help offset these upward pressures.

Inflation in November 2024 was recorded at 2.5%, slightly above October’s 2.3%, reflecting continued fluctuations within the lower end of the government’s 2%-4% target range for the year.

The BSP remains optimistic about hitting its full-year inflation forecast of 3.2%, which aligns with the government's target. “Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” the statement added.

Earlier this month, the Development Budget Coordination Committee (DBCC), in consultation with the BSP, announced the retention of the 2%-4% inflation target through the end of President Ferdinand Marcos Jr.’s administration.

During its Dec. 2 meeting, the DBCC emphasized the importance of a medium-term inflation target in helping shape monetary policy decisions and maintaining price stability.

“By announcing a medium-term inflation target, the BSP aims to strengthen its forward-looking approach to monetary policy formulation with the view of helping anchor inflation expectations to the target,” the central bank said.

While inflation has largely remained within the target range this year, the BSP cautioned about persistent risks to price stability. Supply chain disruptions caused by natural disasters, potential fluctuations in global fuel prices, and local agricultural challenges remain factors to watch.

The BSP assured the public of its continued vigilance in monitoring these risks and adjusting its monetary policy framework to balance price stability with sustainable economic growth.