THE country’s headline inflation rate continued its downward trend in May 2025, slowing further to 1.3 percent from 1.4 percent in the previous month, the Philippine Statistics Authority (PSA) reported on Thursday, June 5, 2025.
This marks the lowest inflation rate recorded since November 2019, when it stood at 1.2 percent, bringing the average inflation rate from January to May 2025 to 1.9 percent.
The May reading is also within the forecast range of 0.9 to 1.7 percent for the month, the Bangko Sentral ng Pilipinas said.
The central bank added that this latest data affirms its latest outlook of “a manageable inflation environment amid the continued easing of commodity price pressures.”
The BSP said it will reassess its monetary policy stance at the next meeting of the Monetary Board on June 19.
Moreover, the Department of Economy, Planning and Development (DEPDev) lauded this development, affirming progress toward easing price pressures and achieving a more stable cost of living for Filipinos.
“We are encouraged by this development. It reflects the success of our sustained efforts to protect the purchasing power of Filipinos and ensure a more affordable cost of living,” said DEPDev office-in-charge and undersecretary for Policy and Planning Rosemarie Edillon on Thursday.
Primary drivers
The primary drivers behind the downtrend in overall inflation in May 2025 included a slower annual increment in housing, water, electricity, gas and other fuels (2.3 percent from 2.9 percent in April), and restaurant and accommodation services (two percent from 2.3 percent). Additionally, the transport index saw a faster annual decline, dropping by 2.4 percent compared to 2.1 percent in the previous month.
The furnishing, household equipment and routine household maintenance index also recorded slower growth.
Conversely, minor increases were observed in alcoholic beverages and tobacco (3.8 percent), information and communication (0.4 percent), recreation, sport and culture (2.2 percent), and education services (4.3 percent). Financial services maintained a zero percent annual rate.
For the month, the top three contributors to the overall inflation rate were housing, water, electricity, gas and other fuels (37.1 percent share), food and non-alcoholic beverages (25.7 percent share) and restaurants and accommodation services (15.5 percent share).
Food inflation
Food inflation at the national level remained steady at 0.7 percent in May 2025, significantly lower than the 6.1 percent recorded in May 2024. This stability particularly benefited low-income households, with the bottom 30 percent of income households experiencing zero percent inflation in May 2025, a sharp decline from 5.3 percent in the same month last year. For this vulnerable group, food inflation also significantly dropped to 2.0 percent, from 8.2 percent in May 2024.
Regionally, the National Capital Region posted a slower inflation rate of 1.7 percent in May. Nine regions, including Soccskargen, Bangsamoro Autonomous Region in Muslim Mindanao and Northern Mindanao, recorded lower inflation rates than the previous month, contributing to a low average regional inflation rate of 1.2 percent.
Targeted policies
To sustain this positive trend, the Marcos Administration has reaffirmed its commitment to implementing targeted policies.
The Food and Drug Administration and the Department of Agriculture are strengthening their collaboration to ensure the availability of safe and effective animal vaccines amid ongoing African Swine Fever (ASF) and Avian Influenza outbreaks. Both agencies are optimistic about a commercial rollout of the ASF vaccine before year-end.
Furthermore, the DA extended the deadline for fish import permits to end-June 2025 to facilitate compliance with revised guidelines, aiming to ensure sufficient supplies.
The government also launched the “Benteng Bigas Meron Na” program on May 15, 2025, offering P20/kg milled rice from the National Food Authority to vulnerable groups. This program is currently available in Kadiwa Centers in Metro Manila, Cebu, Bulacan, Cavite, Laguna, Mindoro and Rizal, with further expansion planned for Visayas and Mindanao in July and September.
“We remain committed to executing the necessary measures to keep prices low and stable. With this, we are optimistic about the government meeting its headline inflation target of two to four percent for the year,” Edillon added. / KOC