January 7, 2025 | 11:01am
MANILA, Philippines — The Philippine Statistics Authority (PSA) announced on Tuesday, January 7, that December 2024 headline inflation rose to 2.9% from 2.5% in November 2024, bringing the full-year 2024 inflation rate to 3.2%.
The 2024 inflation rate fell within the government’s target range for the year.
“The Philippines’ headline inflation or overall inflation increased to 2.9% in December 2024 from 2.5% in November 2024. In December 2023, the inflation rate was higher at 3.9%,” the PSA said in a statement.
The PSA explained the inflation rate in December 2024 was driven by faster increases in housing, water, electricity, gas and fuel prices, which rose to 2.9%—a one-percentage-point increase from November 2024’s 1.9%.
There was also an increase in inflation for recreation, sports and culture from 2.4% in November 2024 to 2.5% in December 2024.
Food inflation in December 2024 was recorded at 3.5%
Core inflation for last month also increased to 2.8% compared to November 2024’s 2.5%.
The National Capital Region (NCR) had the highest inflation rate increase, going from 2.2% in November 2024 to 3.1% in December 2024.
“The main driver to the increase in the inflation rate in the region was the higher annual increment in the index of housing, water, electricity, gas and other fuels at 3.0% in December 2024 from 1.5% in November 2024,” the PSA said.
Outside of NCR, inflation also increased from 2.6% in November 2024 to 2.9% in December 2024.
2024 inflation
“The Philippines’ annual average inflation rate for 2024 stood at 3.2%, which was lower than the 2023 annual average inflation rate of 6.0%,” the PSA said.
The agency explained the lower annual inflation was due to a slower annual average increase in food and non-alcoholic beverage prices. Inflation for food and drink products decreased to 4.4% in 2024, down from 7.9% in 2023.
There was also a lower than average inflation for housing, water, electricity, gas and other fuels in 2024, which was at 1.7% from 2023’s 4.9%.
“Except for education services, the indices of the rest of the commodity groups recorded downtrend in their annual average inflation in 2024 compared with 2023, with the financial services recording an average annual decline of 0.6% in 2024 from a zero percent annual average inflation in 2023,” the PSA said.
The agency said the cost of education services increased from 3.6% in 2023 to 4.3% in 2024.
However, the main drivers of 2024’s inflation were still basic essentials. Food and nonalcoholic beverages comprised 1.7 points of the overall annual inflation of 3.2%.
Restaurants and accommodation services contributed 0.5 percentage points to the 2024 inflation, while housing, water, electricity, gas and other fuels contributed 0.4 percentage points.
The National Economic and Development Authority (NEDA) welcomed the decrease of annual inflation.
“The 3.2% average inflation rate in 2024 is a significant improvement from the 6.0% figure in 2023. Despite the risks we encountered throughout the year, our combined efforts to temper inflation have largely been successful. We will build upon this momentum as we commit to keep the inflation rate within our target range in 2025,” NEDA Secretary Arsenio Balisacan said.
The NEDA chief said the outlook for 2025 also remained optimistic as the government continued to improve productivity.
Meanwhile, the Bangko Sentral ng Pilipinas (BSP) said inflation will likely remain anchored within the government’s target range.
“Nonetheless, the balance of risks to the inflation outlook continues to lean to the upside due largely to potential upward adjustments in transport fares and electricity rates,” the BSP said.
The central bank said that domestic demand is likely to remain firm but subdued.
“Private domestic spending is expected to be supported by easing inflation and improving labor market conditions. However, downside risks in the external environment could materialize and temper economic activity and market sentiment,” the BSP said.
Be the first to comment