Credit rating agency Fitch Ratings said that the country's sound monetary policy has helped ease inflation.

In a credit update report released on Wednesday, Fitch cited the Philippines' progress in bringing down inflation, which averaged 3.2 percent in the first 11 months of 2024 from 6 percent in the same period last year.

The credit update report is separate from a rating action press release where it announces a credit rating action.

To help bring inflation back to within the target range of 2.0 to 4.0 percent, the Bangko Sentral ng Pilipinas (BSP) raised interest rates by a total of 100 basis points last year.

Inflation has slowed down, settling at 2.5 percent in November this year.

Amid a more favorable inflation environment, the BSP reduced interest rates by a total of 50 basis points to boost economic growth.

According to Fitch, inflation is expected to average around the 3 percent level for 2025 to 2026, allowing the central bank to further cut rates by 100 basis points next year.

Fitch, meanwhile expects the Philippine economic growth to settle at 5.7 percent this year, and to accelerate further to 5.9 percent next year and 6.2 percent in 2026.