Inflation hits 9-year low at 1.7% in 2025

MANILA, Philippines, January 10 ------ The Philippines closed 2025 with average inflation easing to 1.7 percent, its lowest level in nine years and below the government’s target as the increase in food prices slowed, the Philippine Statistics Authority (PSA) said.

National Statistician Dennis Mapa said in a press conference yesterday that headline inflation – the rate of increase in consumer prices – averaged 1.7 percent last year, lower than the 3.2 percent average inflation in 2024. He said last year’s average inflation was the lowest since 2016 when inflation averaged 1.3 percent.

Last year’s average inflation was also below the government’s two to four percent target band. Driving the downtrend in last year’s average inflation was the heavily weighted food and non-alcoholic beverages, which posted a slower uptick of 1.2 percent last year from 4.4 percent in 2024. In December last year, inflation rose to 1.8 percent from the previous month’s 1.5 percent, but was below the 2.9 percent print in the same month in 2024.

The December 2025 inflation print was also within the Bangko Sentral ng Pilipinas’ 1.2 to two percent forecast for the month. The PSA attributed the uptrend in December inflation mainly to the faster year-on-year increment in food and non-alcoholic beverages at 1.4 percent last month from 0.1 percent in November 2025.

Inflation for food alone rose to 1.2 percent in December last year from the 0.3 percent decline in the previous month. Mapa said this was due to higher prices of vegetables and flour products used for goods consumed during the holiday season. Vegetables registered faster inflation of 11.6 percent in December 2025 from four percent in the previous month. “The typhoons had an effect of course because if you remember, the month of November, there were strong typhoons. This most probably impacted vegetable farms so prices increased,” he said.

Flour, bread and other bakery products, pasta products and other cereals also registered higher inflation of 1.8 percent in December 2025 from the previous month’s 1.6 percent. Inflation for rice, the country’s staple food, registered a slower 12.3 percent decline in December last year from the previous month’s 15.4 percent. The Department of Economy, Planning and Development (DEPDev) said that the government is committed to implementing policies to temper price pressures and keep inflation within the two to four percent target range for 2026 to 2028. “Despite global headwinds and domestic challenges, the Philippine economy has remained resilient against inflationary pressures due to the government’s timely and targeted interventions,” DEPDev Secretary Arsenio Balisacan said. “Building on this momentum, the government will continue to pursue prudent fiscal and monetary coordination and advance structural reforms to sustain the downward inflation trend and support inclusive growth in 2026 and beyond,” he said.

As part of efforts to keep inflation within target, the government has allocated P297.1 billion for the agriculture sector in this year’s national budget to boost farmer productivity and strengthen food security. The allocation for the agriculture sector will be used to build farm-to-market roads and bridges; develop food hubs, cold storage facilities and rice mills, as well as implement programs to keep prices affordable. To address the impact of rising electricity demand and manage energy-related price pressures, the Department of Energy is accelerating the completion of 200 power generation projects. “These policy initiatives form part of our broader thrust to attain food security, improve human capital and enhance the quality and efficiency of public service delivery – priorities that enable inclusive, broad-based growth for all Filipinos,” Balisacan said.

Source: philstar.com