MANILA (UPDATE 2) — Inflation was at 2.9 percent in January, which was the same level it was in December last year, the Philippine Statistics Authority said Wednesday.

The January 2025 clip, however, was slightly higher than the 2.8 percent rate seen in the same month in 2024. This was also within the Bangko Sentral ng Pilipinas' forecast range of 2.5 to 3.3 percent for the month.

Price increases quickened for food and non-alcoholic beverages, alcoholic drinks and tobacco, as well as transport costs.

“Eto pa talaga yung effect ng typhoon sa vegetables. Alam naman natin na pag may bagyo and we had a lot of storms kasi nung last year,” National Statistician Dennis Mapa said.

He attributed the hike in pork prices, meanwhile, to the problem of African swine fever in certain parts of the Philippines.

The PSA noted that rice prices fell 2.3 percent year-on-year in January, after an annual increase of 0.8 percent in November.

The state statistician said the agency expects rice prices to fall until July because of base effects.

Other food items like corn, flour, fruits and nuts also registered slower increases in the first month of 2025. This offset faster increases in oils and fats and other food items.

Slower price hikes were also noted for clothing, housing, recreation and restaurants, among others.

Core inflation, which strips away volatile food and fuel items, meanwhile  slowed down to 2.6 percent in January from 2.8 percent in December 2024.

Government hopes to keep inflation within 2 to 4 percent in 2025 after inflation averaged 3.2 percent in 2024.

The National Economic and Development Authority said the steady inflation rate is a positive indicator of the government’s commitment to ensure more stable prices in line with the government targets.

"Rice recorded a year-on-year deflation of -2.3 percent as of January 2025. However, the government continues to take proactive steps to make rice prices more affordable," NEDA said.

NEDA Secretary Arsenio Balisacan said the declaration of a food security emergency allows the release and sale of rice buffer stocks from the National Food Authority at lower prices. Balisacan said that due to last year’s string of typhoons, food inflation at the national level rose to 4 percent in January 2025 from 3.5 percent in December 2024.

 He said the DA has been ramping up its ongoing vaccination campaign against African Swine Fever and working closely with the Food and Drug Administration to expedite the approval of the Avian Influenza vaccine. Balisacan said they are trying to secure P300 million to fund vaccine testing, which is expected to begin in March 2025.

The entry of the Maharlika Investment Corporation (MIC) in the country's power grid operator is also expected to reduce electricity costs through lower transmission charges, he said.

“We remain vigilant and proactive in anticipating and addressing future developments, whether upside or downside risks, unforeseen or otherwise. Resiliency of our agri-food systems will be one of our most important goals to ensure low and stable prices for all Filipinos.”

Slowing inflation allowed the BSP to reduce interest rates by a cumulative 75 basis points last year. BSP Governor Eli Remolona has said that they are looking at another 50 bps of rate reductions this year.  

The BSP said higher electricity and transport costs make the balance of risks to the inflation outlook lean to the upside. Lower import tariffs on rice, meanwhile, are the main downside risk to inflation. 

Domestic demand is expected to remain firm, with slower inflation and more jobs boosting private spending, the central bank said.