Low inflation gives BSP room to further reduce interest rates 

The steady inflation rate will allow the Bangko Sentral ng Pilipinas (BSP) to further reduce interest rates to boost consumer spending and economic growth, Finance Secretary Ralph Recto said in a report by Philippine News Agency.

The Philippine Statistics Authority reported on Wednesday that the country's headline inflation remained at 2.9 percent.

Core inflation, which excludes selected volatile food and energy items, also eased to 2.6 percent in January from 2.8 percent in December 2024.

“Magandang balita ito (This is good news). This is a strong indicator of the government’s commitment to keeping prices stable and signals that the BSP has more flexibility to further reduce interest rates," Recto said in a statement.

"Lower interest rates mean cheaper borrowing costs for our consumers and businesses. This will provide greater purchasing power for our people and stronger momentum for investments and growth,” he added.

Last year, the central bank’s Monetary Board reduced policy rates by a total of 75 basis points.

The first meeting of the Monetary Board on the monetary policy stance this year will be held on Feb. 13.

Recto, meanwhile, said the government would continue to implement measures to ensure stable prices of food, especially rice.

In January, rice inflation showed a significant improvement, registering a disinflation of -2.3 percent in January 2025, down from 0.8 percent in December 2024, and a sharp decline from 22.6 percent for the same month a year ago.

“This is a welcome relief for Filipino consumers. But rest assured, the government will not be complacent. We will remain proactive in implementing interventions to ensure stable and affordable rice prices,” Recto said.