MANILA (UPDATE) - Philippine inflation quickened in December to 2.9 percent as power rates and housing costs climbed, according to the Philippine Statistics Authority.

This was faster than the 2.5 percent inflation seen in November and pushed the average inflation for 2024 to 3.2 percent.

The December clip was within the Bangko Sentral ng Pilipinas' forecast range of 2.3 to 3.1 percent and also meant that the government achieved its target of keeping the average inflation for 2024 within 2 to 4 percent.

PSA Undersecretary and National Statistician Dennis Mapa said inflation quickened in December mainly due to the faster increases in the costs of housing, water, electricity, gas and other fuels. 

Transport costs also rose last month at 0.9 percent during the month from an annual decline of 1.2 percent in November 2024 also contributed to the uptrend, the PSA said. Mapa noted boat fares were higher last month.

“Yung pamasahe sa barko, may seasonality talaga ‘yan ano, tumataas siya pag holidays—December and during summer. Nakita namin in the past, hindi naman ito unique ngayong year,” National Statistician Claire Dennis Mapa said.

“But we’re expecting the after itong month, bababa naman itong pamasahe sa barko,” he stressed. 

Food inflation stayed at 3.5 percent in December 2024 which was lower than the food inflation rate in December 2023 which was at 5.5 percent. The PSA also noted that the average food inflation rate for 2024 was observed at 4.5 percent, lower than the recorded annual average food inflation rate of 8 percent in 2023.

Mapa also noted that vegetable inflation in the National Capital Region remained high at 28.5 percent in December because of storms that hit the country.

“Every time there’s a typhoon ang una talagang tumataas ang presyo ay yung mga gulay, nakikita natin yung inflation rate for vegetables. But we see, of course, samahan pa natin yung demand, noong holidays,” he explained. 

Core inflation, which strips away food and energy items that are prone to big swings, increased to 2.8 percent in December 2024 from 2.5 percent in November 2024.

Asked if he sees inflation speeding up in January, Mapa said different commodities are showing mixed price movements. 

“Siguro yung good news is that kung hindi niyo napapansin, yung inflation rate sa bigas ay bumababa na. In fact, baka mayroon tayong expectation na maging negative na yung inflation sa rice sa January. So that’s part of the good news,” he said. 

He noted, however, that vegetable prices are still up as of the first week of January. 

"The 3.2-percent average inflation rate in 2024 is a significant improvement from the 6.0 percent figure in 2023,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said. 

The economic manager said government will continue to keep inflation within the government’s target of 2 to 4 percent in 2025.

The Bangko Sentral ng Pilipinas (BSP) cut interest rates by 75 basis points last year amid slowing inflation, and more rate cuts are expected this year. BSP Governor Eli Remolona however has said that their earlier projection of a cumulative 100 bps of cuts this year now seem unlikely amid continuing economic challenges. 

The BSP said risks to inflation remain to the upside because of possible increases in transportation fares and electricity rates. It noted, however, that lower import tariffs on rice can keep inflation under control.

Finance Secretary Ralph Recto, meanwhile, said the sustained moderation in rice prices is particularly a welcome relief especially to the poorest Filipinos.

“Lalo pa po naming pagbubutihin ang aming trabaho para tuloy-tuloy ang pagbaba ng inflation at mas mapagaan ang buhay ng bawat Pilipino,” he said.

SM Investments economist Dan Roces noted there has been a significant improvement in inflation numbers, especially considering that inflation was above 4 percent in mid-2024.

He noted, however, that inflation has been speeding up since September.

“So this suggests we may be at a turning point as well in terms of inflation numbers. So while the 2.9 percent headline might seem moderate, the month on month acceleration of 0.6 percent is the highest since July,” he said.

“[This] actually suggest building momentum with price pressure, which actually warrants attention,” he said.