Metrobank sees inflation staying within BSP target
Metropolitan Bank & Trust Co. (Metrobank) said inflation remaining within the Bangko Sentral ng Pilipinas’ (BSP) target range keeps the door open for further policy rate cuts this year.
This would provide continued support for economic growth despite emerging price pressures.
Philippine headline inflation rose to 2 percent year on year in January from 1.8 percent in December, but stayed comfortably within the BSP’s target band.
Core inflation, which excludes volatile food and energy items, also edged higher to 2.8 percent, pointing to early signs of demand normalization as the economy continues to recover.
The Ty family-led bank said the uptick in inflation was largely driven by housing, water, electricity, gas and other fuels.
This reflected annual rental adjustments outside the National Capital Region and higher electricity rates.
These price pressures, however, were partly offset by slower food inflation.
This eased to 1.1 percent amid lower prices across most major food items and continued rice deflation.
“While inflation is moving higher from recent lows, it remains well-anchored within the central bank’s target,” Metrobank said.
The bank noted that this gives policymakers room to continue supporting growth even as demand-side pressures gradually build.
For the full year, the bank maintained its 2026 inflation forecast of 3.3 percent. It cited low base effects and recovering demand that could push prices higher in the second half of the year.
These pressures, Metrobank said, are expected to be partly offset by softer consumer spending and supply-side factors. These include the lifting of the rice import ban.
Given the inflation backdrop, Metrobank expects the BSP to proceed with further monetary easing.
The bank forecasts cumulative policy rate cuts of 50 basis points this year.
This could bring the BSP’s benchmark rate down to 4 percent by end-2026, as authorities balance growth support with price stability.
