With this reflecting on lower prices of key commodities, according to the central bank.
In its media release on Wednesday, January 7, the Bangko Sentral Ng Pilipinas (BSP) reported that the country’s average headline inflation for the full year 2025 was at 1.7 percent.
This figure is below the government’s inflation target of 3.0 percent (± 1.0 percentage point).
“This reflects the lower prices of key commodities such as rice and petroleum products along with easing demand-side price pressures as core inflation also moderated,” the BSP told.
It also noted that the higher food prices accounted for the bulk of the increase in headline inflation, specifically vegetables, corn, fish and other seafood.
“Increases for these items were driven by weather-related disruptions, reduced supply from lower import arrivals, the implementation of the closed fishing season, and a seasonal uptick in demand during the holidays,” the central bank continued.
Meanwhile, rice prices continued to decline in December, though at a slower pace. Notably, throughout this period, the rice importation was halted amid high floor prices of palay, as well as the abundance of supply.
On a seasonally adjusted month-on-month basis, headline inflation rose from 0 percent in November to 0.7 percent in December. As regards to core inflation, it was unchanged at 2.4 percent in December.
Year-on-year headline inflation, meanwhile, increased from 1.5 percent in November to 1.8 percent in December—well within the Bangko Sentral’s forecast range of 1.2 to 2.0 percent for December.
“For the bottom 30 percent income households, inflation was even lower at 1.1 percent in December and 0.3 percent for 2025,” the BSP noted.
This year, the inflation outlook remains “benign,” with BSP expecting inflation to return towards the target range in 2026 and 2027.
“Going forward, the BSP will continue to monitor domestic and external developments that could affect the outlook for inflation and growth, consistent with its data-dependent approach to monetary policy,” it stated.
