The Bangko Sentral ng Pilipinas (BSP) announced its inflation forecast for the final month of 2025, projecting that price increases will remain manageable and near the lower boundary of the national target.
BSP's December Inflation Projection
In a statement released on December 29, 2025, the Philippine central bank said it expects inflation in December 2025 to settle within a range of 1.2 percent to 2.0 percent. This forecast indicates that consumer price growth will continue to hover near the lower end of the government's official target band, as general price pressures stay broadly contained.
Key Upside Risks to Price Stability
The BSP, however, identified several factors that could push inflation higher. The central bank warned that lingering adverse weather conditions coupled with stronger holiday season demand could lead to higher prices for major food items. Additionally, potential increases in the cost of liquefied petroleum gas (LPG) and gasoline were cited as significant upside risks to the inflation outlook.
Factors That Could Ease Price Pressures
On the other hand, the BSP noted that certain developments may help offset these upward pressures. Specifically, lower electricity rates for consumers in areas served by the Manila Electric Company (Meralco) are expected to provide some relief. The central bank also pointed to declining prices for kerosene and diesel as factors that could help keep overall inflation in check.
The BSP reiterated its commitment to a data-dependent approach to monetary policy. It emphasized that it will continue to closely monitor both domestic and global developments that could influence inflation and the broader trajectory of economic growth in the Philippines.
