DEPDev sees easing toward a ‘more stable cost of living for Filipinos’
Philippine headline inflation eased further to hit a new six-year low of 1.3 percent in May, which the government welcomed as an indication of easing price pressures toward “a more stable cost of living for Filipinos.”
On Thursday, the Philippine Statistics Authority (PSA) released official data showing headline inflation down further from a previous low of 1.4 percent in April, as annual increases in utilities and transportation costs slowed.
This brings the average inflation rate from January to May 2025 to 1.9 percent. In May 2024, the inflation rate was higher at 3.9 percent.
The latest headline inflation rate matched the mean average forecast of 1.33 percent made by analysts polled by Malaya Business Insight last week.
The Department of Economy, Planning, and Development (DEPDev) said the continued decline in the country’s headline inflation “shows 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,” DEPDev Office-in-Charge and Undersecretary for Policy and Planning Rosemarie G. Edillon said in a statement following the PSA release of the data on Thursday.
Lowest since Nov 2019
Claire Dennis S. Mapa, National Statistician and Civil Registrar General, said last month’s inflation–the rate of increase in prices over a given period–is the slowest since November 2019, when the rate was recorded at 1.2 percent.
Mapa said the decline in inflation in May was primarily brought about by the slower annual increment in the index for housing, water, electricity, gas and other fuels at 2.3 percent in May 2025 from 2.9 percent in the month earlier.
A faster annual decline was recorded in the transport index at 2.4 percent in May 2025 from a 2.1 percent annual drop in April.
Also contributing to the downtrend were prices of restaurant and accommodation services, which dropped to 2 percent in May from 2.3 percent in April.
The furnishing, household equipment, and routine household maintenance index also recorded slower annual growth of 2.0 percent during the month in review, from 2.1 percent in April 2025.
Core inflation, which excludes selected food and energy items, remained at 2.2 percent in April 2025. In April 2024, core inflation rate was faster at 3.2 percent.
Biggest contributors
“The biggest contributor to the slowdown in May inflation was housing, water, electricity, gas and other fuels with a 37.1 percent share or 0.5 percentage point (to the total inflation),” Mapa said.
Rounding up the top three contributors were food and non-alcoholic beverages, with a 25.7 percent share or 0.3 percentage point, and restaurants and accommodation services with a 15.5 percent share or 0.2 percentage point.
However, Mapa said higher inflation rates were observed in the indexes for alcoholic beverages and tobacco (3.8 percent from 3.7 percent); information and communication (0.4 percent from 0.3 percent); recreation, sport and culture (2.2 percent from 2.1 percent); and education services (4.3 percent from 4.2 percent).
Food inflation
Mapa said food inflation at the national level remained at 0.7 percent in May 2025. In May 2024, food inflation was higher at 6.1 percent.
“Food inflation shared (or contributed) 18.7 percent or 0.2 percentage point to the overall inflation in May 2025,” he said.
The top three food groups in terms of contribution to food inflation during the month were meat and other parts of slaughtered land animals with a share of 216.6 percent or 1.5 percentage points; fish and other seafood with a share of 133.6 percent or 0.9 percentage point; and milk, other dairy products and eggs with a share of 55.8 percent or 0.4 percentage point.
Rice, according to Mapa, continued to show declines in prices.
“Prices of rice have been declining since January of this year,” he said.
Rice prices dropped by 2.3 percent in January, 4.9 percent in February, 7.7 percent in March and 1.9 percent in April. In May prices of rice fell 12.8 percent.
The PSA also noted slower inflation rates in vegetables, tubers, plantains, cooking bananas and pulses at 2.3 percent during the month in review, from 6.9 percent in the preceding month of March, and fish and other seafood at 4.3 percent from 5.5 percent in the comparative periods.
However, Mapa said faster year-on-year increases were observed during the month in the indexes for milk, other dairy products and eggs at 4.0 percent from 3.4 percent in the previous month, and oils and fats at 4.7 percent from 4.0 percent in March 2025.
Easing price pressures
To keep inflation at bay, Edillon said the Marcos Administration reaffirmed its commitment to implementing targeted policies aimed at mitigating inflationary pressures and safeguarding the purchasing power of Filipino families.
“The Food and Drug Administration (FDA) and the Department of Agriculture (DA) are strengthening its collaboration to ensure the availability of safe and effective animal vaccines amid ongoing African Swine Fever (ASF) and Avian Influenza outbreaks. The Bureau of Animal Industry is assessing the controlled ASF vaccination campaign. The DA and the Food and Drug Administration remain optimistic that a commercial rollout of the ASF vaccine could be achieved before the end of the year,” Edillon, who is currently DEPDev OIC while Secretary Arsenio Balisacan is on official travel, said.
“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 2 to 4 percent for the year,” Edillon added.
Sufficient, affordable food
“It is the clear directive of President Marcos Jr. that we ensure food is sufficient and affordable,” Agriculture Secretary Francisco P. Tiu Laurel Jr. said in a separate statement.
He said the DA is intensifying efforts to stabilize food prices and secure supply—particularly for pork and rice, two staples that weigh heavily on household budgets—to help in further slowing food inflation and ease the daily burden on Filipino families.
“We are expanding the reach of the P20 rice program and are studying a reduction in the suggested retail price (SRP) for imported rice—the national staple that dominates Filipino tables, especially among the poor.”
Tiu Laurel added that the DA is reassessing its approach to the swine industry, revising previous measures to keep pork prices affordable.
At the same time, he said the agency is fine-tuning supply management for fish and other essential goods to prevent sudden price spikes.
He said three new KADIWA ng Pangulo centers opened on Thursday in Bacolod City, offering low-cost produce, including rice at ₱20 per kilo under the “Benteng Bigas, Meron Na!” initiative.
The launch brings the total number of P20 rice outlets to 87, exceeding the original target of 55 outlets by end-June.
Within forecast
The Bangko Sentral ng Pilipinas (BSP), meanwhile, said the latest inflation outturn is “consistent with the BSP’s assessment of a manageable inflation environment over the policy horizon.”
The May 2025 inflation outturn is within the BSP’s forecast range for the month of between 0.9 and 1.7 percent. For the full year, BSP’s target range is between 2 and 4 percent.
“The risks to the inflation outlook also continue to be broadly balanced for 2025 to 2027. Upside pressures come from possible increases in transport charges, meat prices, and utility rates. Downside risks are linked to the continuing effects of lower tariffs on rice imports and the expected impact of weaker global demand,” BSP said in a statement.
The Monetary Board, at the same time, noted the more challenging external environment, “which would likely dampen global growth prospects, and thereby pose a downside risk to global commodity prices and domestic economic activity.”
