INFLATION in the Philippines cooled further in July 2025 to 0.9 percent, down from 1.4 percent in June, marking its lowest level since October 2019, the Philippine Statistics Authority (PSA) reported on Tuesday, Aug. 5, 2025.
This brings the average inflation for the first seven months of the year to 1.7 percent, significantly lower than the 4.4 percent rate recorded in July 2024.
The continued downtrend in inflation was driven mainly by the sustained decline in food and energy prices, particularly the sharper annual contraction in the rice index, which fell 15.9 percent year-on-year in July, compared to a 14.3 percent drop in June. The rice price index has now declined for 13 consecutive months, moving closer to pre-spike levels.
Other key drivers of disinflation were the slower price increases in housing, water, electricity, gas and other fuels (2.1 percent from 3.2 percent in June), and the steeper drop in the transport index (-2 percent from -1.6 percent).
Core inflation, which excludes volatile food and energy items, slightly rose to 2.3 percent in July from 2.2 percent the previous month. It remains lower than the 2.9 percent rate in July 2024.
The Department of Economy, Planning, and Development (DEPDev) highlighted that the sharp fall in rice prices has significantly eased the cost of living for low-income households. Inflation for the bottom 30 percent income group registered at -0.8 percent in July, a sharp reversal from the 5.8 percent seen in the same month last year.
“This not only helps Filipinos preserve the value of their peso but also builds confidence for businesses and consumers to plan ahead,” said DEPDev Secretary Arsenio M. Balisacan. He emphasized the government’s continued focus on stabilizing prices and protecting purchasing power.
For this income group, inflation in the food and non-alcoholic beverages category fell further to -3.0 percent, with rice plunging by 17.8 percent, corn by 17.7 percent, and vegetables and tubers by 1.9 percent.
Breakdown of contribution
The main contributors to the July 2025 headline inflation were housing, water, electricity, gas, and other fuels (47.3 percent share or 0.4 percentage point); restaurants and accommodation services (24.7 percent share or 0.2 percentage point) and alcoholic beverages and tobacco (14.2 percent share or 0.1 percentage point).
On the food front, food inflation turned negative at -0.5 percent in July from a 0.1 percent increase in June. This is due to the double-digit deflation in rice and corn, and weaker price growth for vegetables and fruits. Notably, cereals and cereal products contributed -3.5 percentage points to overall food inflation.
To mitigate the impact of recent tropical storms and maintain a stable agricultural supply, the Department of Agriculture (DA) has mobilized P495.4 million in agricultural inputs, including rice, corn, and vegetable seeds. It is also offering interest-free loans of up to P25,000 through the Survival and Recovery Loan Program and fast-tracking crop insurance indemnities.
Meanwhile, the Department of Social Welfare and Development (DSWD) is providing subsidized rice at P20 per kilo to beneficiaries under the “Walang Gutom Program” via the Kadiwa ng Pangulo initiative.
The DA also expects the arrival of 150,000 additional African Swine Fever (ASF) vaccine doses from Vietnam this month. ASF-affected barangays have been reduced to 28 as of July 11, down from 534 at the outbreak’s peak in October 2024.
The Bangko Sentral ng Pilipinas said the July result was within its forecast range and expects 2025 inflation to stay below the lower end of its two to four percent target. However, it warned of external risks such as geopolitical tensions and global economic uncertainty. / KOC