Inflation data, due to come out on Monday, is projected to ease further in April 2025, with the Bangko Sentral ng Pilipinas (BSP) forecasting a possible low of 1.3 percent, marking a continuation of the disinflation trend and strengthening the case for monetary easing later this year.
Economists cite moderating food and energy prices, a stronger peso, and improved domestic supply conditions as key drivers of the downward pressure on consumer prices. The expected inflation range of 1.3 percent to 2.1 percent follows a March reading of 1.8 percent—the lowest since May 2020 and below market expectations.
“This signals continued progress toward price stability, potentially opening the door for a rate cut by August if inflation remains subdued,” said analysts monitoring BSP policy. The central bank has maintained its benchmark rate at 5.75 percent since February, emphasizing a cautious stance aligned with its price stability mandate.
However, risks remain. Experts note that elevated electricity rates and transport fares could partially offset the benefits from easing food and fuel costs. Additionally, the BSP’s own forecasts suggest a 50 percent chance that inflation could still breach the upper end of the government’s target range in 2025 and 2026, influenced by global oil prices and supply-side challenges.
Market participants are closely watching inflation prints, with investor sentiment, currency stability, and equity performance all tied to the trajectory of consumer prices. The data also comes at a politically sensitive time, as the May 12 general elections approach, heightening public and policymaker scrutiny.
In line with its mandate, the BSP said it will “continue to take a measured approach” in adjusting monetary policy to support both stable prices and sustainable economic growth.
