Philippine inflation rate hits 11-month high of 2% in January

The country’s inflation rate climbed to an 11-month high of 2 percent in January on the back of higher housing and utilities costs, the Philippine Statistics Authority (PSA) reported.

The latest print reached the low end of the 2 percent to 4 percent target of the Bangko Sentral ng Pilipinas (BSP) for the first time since February 2025. 

This was faster than December’s 1.8 percent, which was also the median estimate of the 15 economists surveyed by the Inquirer last week. Still, it remained within the central bank’s 1.4 percent to 2.2 percent forecast range.

State statisticians reported price pressures from housing, water, electricity, gas, and other fuels, which posted an inflation rate of 3.3 percent, up from 2.5 percent in the previous month.

Coupled with weak economic growth, the faster inflation rate may help inform the central bank’s decision on whether further rate cuts are warranted.

The BSP’s next rate-setting meeting is scheduled for Feb. 19.

Source: Philstar

Philippines’ Q4 GDP growth sharply slows to 3% amid corruption scandal

The Philippine economy grew 3% in the last quarter of 2025 compared to a year earlier, weaker than the downwardly revised 3.9% expansion for the previous quarter, the country’s statistics agency said.

The pace fell below a 4% median forecast in a Reuters poll, and brought full-year gross domestic product (GDP) growth to 4.4%, missing the government’s 5.5% to 6.5% target for 2025.

The lackluster performance of the Philippine economy raised the odds of another central bank rate cut, and was caused in part by a corruption scandal tied to infrastructure projects that slowed public spending last year.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona said last week that if fourth quarter GDP proved to be weaker-than-expected, it would help the central bank decide whether to take action at a rate setting meeting scheduled for February 19.

The central bank has cut its benchmark rate by a cumulative 200 basis points to a three-year low of 4.5% in the current cycle, which Remolona has said was nearing its end.

Source: Business World

Investments recovery key to growth rebound

A rebound in public and private investments could lead to gradual economic gains for the Philippines and a return to 6.0-percent growth, a senior Asian Development Bank (ADB) official said.

“I guess the main variable for 2026 is how fast does the public investment recover,” ADB Country Director Andrew Jeffries told reporters on the sidelines of the Bangko Sentral ng Pilipinas’ (BSP) Annual Reception for the Banking Community last Friday.

“[W]e were thinking maybe two quarters,” he added, with the last six months of this year setting the stage for a stronger expansion in 2027.

For 2026, he said: “Imagine a slower quarter one and maybe a little better quarter two and then maybe a little better quarter three and a good quarter four.”

A return to 6.0-percent growth is possible, but Jeffries stressed that “high investment, public and private... would be, to me, the key driver... the other things seem to be going pretty well.”

He also said that exports would have to improve for long-term economic growth and economic resiliency, which will require sustained reforms, stronger investment promotion, and improvements in the business environment.

“It’s not something that happens overnight,” he said. “But, you know, neighbors have done it, and the Philippines can do that.”

Citing “reduced public infrastructure spending,” the Manila-based lender last month lowered its 2025 and 2026 growth forecasts for the Philippines to 5.0 percent and 5.3 percent, respectively, from 5.6 percent and 5.7 percent.

The country enjoyed a run of above 6.0-percent growth before the Covid-19 pandemic hit, leading to a 9.5-percent plunge in 2020. It saw a recovery in the following two years, recording a spike of 7.6 percent in 2022, but then posted below-target results of 5.5 percent and 5.7 percent in 2023 and 2024.

A 5.5- to 6.5-percent expansion was targeted for 2025, and despite a middling start to the year, officials expressed hope of a return to target. A massive flood control project scandal, however, led to a marked third-quarter slowdown that likely extended to the rest of the year.

A third straight growth miss and a marked full-year slowdown to below 5.0 percent are expected to be announced this Thursday.

BSP Governor Eli Remolona Jr. has said that 2025 growth could have slowed to 4.6 percent, while Socioeconomic Planning Secretary Arsenio Balisacan has predicted a 4.8- to 5.0-percent outcome.

Earlier this month, Remolona said the corruption scandal would have “a long impact” on economic growth, with the loss of confidence among investors and households possibly extending up to the first half of 2026.

Still, he expects a recovery to 5.4 percent this year and a further improvement to 6.0–6.2 percent in 2027, within the downwardly-revised targets of 5.0–6.0 percent and 5.5–6.5 percent.

Source: Manila Times