CONSUMERS in the Philippines experienced a significant reprieve from rising prices in April 2025, as the headline inflation rate plummeted to 1.4 percent, the Philippine Statistics Authority (PSA) announced on Tuesday, May 6, 2025.
This marks the lowest inflation level recorded since November 2019, when it stood at 1.2 percent. The April figure represents a further easing from the 1.8 percent inflation seen in March and a substantial decrease compared to the 3.8 percent recorded in April 2024.
The national average inflation rate for the first four months of 2025 now stands at two percent.
Slower food, transport costs
According to the PSA data, the primary factors contributing to this significant downward trend in overall inflation were the considerably slower increase in the cost of food and non-alcoholic beverages, which rose by only 0.9 percent in April, down from 2.2 percent in March. Additionally, transportation costs saw a faster year-on-year decrease of 2.1 percent in April, accelerating from the 1.1 percent decline in the previous month.
Several other commodity groups also experienced more moderate annual price increases in April, including clothing and footwear, information and communication, recreation, sport and culture, and personal care and miscellaneous goods and services.
However, not all sectors saw a slowdown. Alcoholic beverages and tobacco, housing, water, electricity, gas and other fuels, and health all registered higher inflation rates in April compared to March. The remaining commodity groups maintained their previous month’s annual growth rates.
Despite the overall cooling, the commodity groups with the largest contribution to the 1.4 percent headline inflation in April 2025 were:
- Housing, Water, Electricity, Gas and Other Fuels, accounting for 39.5 percent of the total inflation, translating to 0.6 percentage points.
- Food and Non-Alcoholic Beverages, contributing 24.6 percent, or 0.3 percentage points.
- Restaurants and Accommodation Services, with a share of 15.2 percent, or 0.2 percentage points.
Food inflation eases sharply
The rate of increase in food prices at the national level also saw a substantial deceleration, dropping to 0.7 percent in April 2025 from 2.3 percent in March 2025. This is a significant drop from the 6.3 percent food inflation recorded in April of the previous year.
The primary driver behind the easing food inflation was the faster year-on-year decline in the price of rice, which fell by 10.9 percent in April, compared to a 7.7 percent decrease in March. Slower inflation rates were also observed for vegetables, tubers, plantains, cooking bananas and pulses, as well as fish and other seafood. Additionally, the prices of corn and sugar saw faster annual decreases.
While most food groups saw a moderation in price increases or even decreases, milk, other dairy products and eggs, as well as oils and fats, experienced faster year-on-year increases in April. The inflation rate for flour, bread, pasta and other cereals remained unchanged from the previous month.
The top three food groups contributing to the 0.7 percent food inflation in April 2025 were:
- Meat and other parts of slaughtered land animals, contributed a substantial 203.3 percent, or 1.4 percentage points.
- Fish and other seafood, with a share of 98.1 percent, or 0.7 percentage points.
- Milk, other dairy products and eggs, contributed 45 percent, or 0.3 percentage points.
Accommodative monetary policy stance
In response to the latest inflation data, the Bangko Sentral ng Pilipinas (BSP) said that the April 2025 inflation outturn falls within its forecast range of 1.3 to 2.1 percent. The BSP noted that the figure is consistent with its assessment of a manageable inflation environment over the policy horizon, aided by the continued easing of commodity price pressures and a downward revision in baseline inflation forecasts.
The central bank also indicated that the risks to the inflation outlook for 2025 to 2027 remain broadly balanced. Potential upside pressures include possible increases in transport charges, meat prices, and utility rates, while downside risks are linked to the ongoing effects of lower tariffs on rice imports and the expected impact of weaker global demand.
The Monetary Board highlighted the more challenging external environment, which could dampen global gross domestic product growth and pose a downside risk to domestic economic activity.
“On balance, the more manageable inflation outlook and the downside risks to growth allow for a shift toward a more accommodative monetary policy stance,” the BSP said.
Looking ahead, the BSP emphasized that it will continue to adopt a measured approach in deciding on further monetary easing, remaining data-dependent in its pursuit of price stability conducive to sustainable economic growth and employment. / KOC