The Bangko Sentral ng Pilipinas (BSP) reported that inflation in July 2025 fell within its forecast range of 0.5 to 1.3 percent, driven largely by the sustained drop in rice prices.

With inflation now projected to average below the lower end of the 2.0 to 4.0 percent target for the full year, the BSP signaled that a more accommodative monetary policy stance may be justified.

The central bank emphasized that easing price pressures offers room to support economic activity while remaining vigilant to risks.

Inflation within target range

For 2026 and 2027, inflation is expected to rise but stay firmly within the target range.

The BSP, however, warned that downside risks to growth are emerging due to slowing global economic activity, heightened geopolitical tensions in the Middle East, and uncertainty surrounding US trade policies.

Despite the easing trend, the BSP stressed that it remains committed to maintaining price stability while ensuring its monetary policy settings remain supportive of sustainable growth and employment.