Inflation likely hit bottom for this year

Inflation may have reached its lowest level this year as it hit 1.9 percent in September, giving the Bangko Sentral ng Pilipinas (BSP) room to further cut borrowing costs in the coming months, a poll of leading economists showed.

- BY KEISHA TA-ASAN

Bank of the Philippine Islands (BPI) lead economist Jun Neri in a report said inflation may have reached its lowest level this year, but it could pick up in the last three months of 2024 as favorable base effects fade.

"Nevertheless, we expect inflation to remain under control, potentially staying below three percent in the absence of supply shocks. This favorable condition could extend into 2025," Neri said.

But he cautioned that upside risks remain, particularly the possibility of a La Niña weather event and rising cases of African swine fever.

"Inflation in the Philippines remains sensitive to climate conditions, and another extreme weather event could trigger a spike," Neri said.

"On the other hand, stable commodity prices amid China's economic slowdown could mitigate these risks." BPI expects full-year inflation to average at 3.2 percent this year before easing further to 2.8 percent in 2025. Both forecasts remain well within the two to four percent target of the BSP.

Headline inflation sharply slowed to 1.9 percent yearon-year in September from 3.3 percent in August and 6.1 percent a year ago, the Philippine Statistics Authority reported on Friday.