Rice prices drop, food inflation eases further
HEADLINE inflation slowed further to 1.4 percent in April this year from 1.8 percent in March, with declines in rice prices and easing food price increases accounting largely for the slowdown, official data showed.
The rate of inflation in April marks the lowest since November 2019, or 5 1/2 years ago, when the rate reached a low of 1.2 percent, acccording to data released Tuesday by the Philippine Statistics Authority (PSA).
The comparative April 2024 rate stood at 3.8 percent.
Claire Dennis S. Mapa, National Statistician and Civil Registrar General, said the downtrend in inflation last month was primarily brought about by the slower annual increase in the index of food and non-alcoholic beverages.
Also contributing to last month’s slowdown was the bigger year-on-year decrease in the transport index to 2.1 percent from 1.1 percent in the preceding month.
Determined attempts by the administration of President Ferdinand Marcos Jr. to improve the economy are paying off, Malacañang said after the PSA issued its inflation report to the media.
“Ang pagbaba ng inflation rate ay patunay na patuloy ang pagsisikap ng Pangulong Marcos Jr. at ng administrasyon na palakasin ang ating ekonomiya (The drop in inflation rate is proof that continuing efforts by President Marcos Jr. and his administration to strengthen our economy are paying off),” Palace Press Officer Claire Castro said in a briefing with reporters.
Slower annual increases were also noted in the indices of clothing and footwear; information and communication; recreation, sport and culture; and personal care, and miscellaneous goods and services.
Some acceleration was observed, however, in the commodity groups of alcoholic beverages and tobacco; housing, water, electricity, gas and other fuels; and health.
“The top three commodity groups contributing to the April 2025 overall inflation of 1.4 percent were (1) housing, water, electricity/gas and other fuels, with a 39.5 percent share or 0.6 percentage point; (2) food and non-alcoholic beverages, with a 24.6 percent share or 0.3 percentage point; and (3) restaurants and accommodation services, with s 15.2 percent share or 0.2 percentage point,” Mapa said.
Mapa said food inflation at the national level further eased to 0.7 percent in April 2025 from 2.3 percent in the previous month. In April 2024, food inflation was higher at 6.3 percent.
“Food inflation shared 18.2 percent or 0.3 percentage point to the overall inflation in April 2025,” Mapa said.
Rice prices drop
The decrease in food inflation last month was primarily brought about by the 10.9 percent decline in the rice index. This was more than the decline of 7.7 percent in March 2025.
Mapa said the PSA tracked the price movements of three rice varieties, which showed regular milled rice was selling at P44.45 per kilo last month compared with P51.25 in April last year.
Well-milled rice sold at P50.54 on average from P56.42, while special rice was selling at P60.69 from P64.68 the previous month, Mapa said.
Vegetables, tubers, plantains, cooking bananas and pulses also registered lower inflation rates of 2.3 percent from 6.9 percent month-on-month.
Prices of fish and other seafood items also came in at a slower rate of 4.3 percent from 5.5 percent in the same comparable period.
Meat and other parts of slaughtered land animals, as well as fruits and nuts, and ready-made food and other unclassified food products also recorded slower inflation rates in April.
Dairy product prices
However, Mapa said faster year-on-year increases were observed in the indices of milk, other dairy products and eggs at 4.0 percent from 3.4 percent.
Price of oils and fats also moved 4.7 percent higher from 4.0 percent.
Core inflation, which excludes selected food and energy items, remained at 2.2 percent in April from March, and from 3.2 percent a year earlier.
Interventions working
The Marcos administration reiterated its commitment to closely monitor commodity prices and implement measures to mitigate inflationary pressures, the Department of Economy, Planning, and Development (DEPDev) said in a statement.
“The sustained slowdown in inflation, driven largely by the significant decline in food prices, is a positive sign that our policy interventions are working,” DEPDev Undersecretary for Planning and Policy Group Rosemarie G. Edillon, said.
“We will continue to implement strategies to vigilantly monitor price shocks and proactively temper inflationary pressures,” she added.
One of the government’s ongoing efforts to rein in inflation are the initiatives of the Department of Agriculture (DA), to bring down rice prices and the monitoring of agricultural production and market prices.
In particular the DA is on the lookout for impact of weather on high-value crops from Northern Luzon, that are vulnerable to extreme summer heat.
“We are encouraged that our initiatives to enhance supply and stabilize agricultural commodity prices are easing the financial burden on millions of Filipino consumers, especially low-income families,” Agriculture Secretary Francisco P. Tiu Laurel Jr. said in a separate statement.
He noted, however, that certain challenges need to be addressed.
“There are still supply and value chain issues the DA is actively addressing, particularly in the pork sector, which could further stabilize food prices moving forward,” Tiu Laurel stressed.
Last week, the DA launched the P20-per-kilo rice in Cebu City, with a broader implementation planned after the May 12 midterm elections.
“Our goal is not only to reduce inflation but to ensure that its benefits are felt by every Filipino household — through lower food costs and improved access to basic goods,” Edillon.
Within BSP target
The April 2025 inflation falls within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 1.3 to 2.1 percent for the month.
BSP Governor Eli Remolona Jr. said last month’s inflation remains consistent with the BSP’s assessment of a manageable inflation environment over the policy horizon.
“The risks to the inflation outlook also continue to be broadly balanced for 2025 to 2027,” the central bank governor said in a statement.
Emilio S. Neri Jr., senior vice president and lead economist at Bank of the Philippine Islands, said in a separate report sent to reporters that consumers are likely to continue to benefit from easing inflation.
“The sustained decline in rice prices, particularly significant given rice’s large share in household budgets, has helped reduce financial pressure on Filipino families, especially after the back-to-back breaches of inflation in 2022 and 2023 and the massive spike in rice prices in 2024,” he said.
“This improvement in consumer spending is especially critical as the economy faces external uncertainties stemming from US tariffs.,” Neri said.
“With domestic demand serving as a key driver of growth, the Philippines is more insulated than other economies from global trade disruptions,” he added.
A different perspective
Paolo Rivera, senior research fellow at the Philippine Institute of Development Studies, pointed to another way of looking at inflation-related matters. He said low inflation is not always a positive sign.
“It may also signal weaker demand or a broader economic deceleration,” he said.
“It can point to soft consumer spending, production cutbacks, or excess supply, especially if it persists. If disinflation continues alongside slowing manufacturing and tepid employment growth, it could point to waning momentum in the economy,” Rivera said.
It could also be due to a general decline in economic conditions, globally and domestically, Leonardo A. Lanzona Jr., economics professor at the Ateneo de Manila University, said.
“While inflation is down, consumers are not generally better off as economic activity and incomes are on a downside,” he added.
Accommodative policy stance
“On balance, the more manageable inflation outlook and the downside risks to growth allow for a shift toward a more accommodative monetary policy stance,” BSP’s Remolana said.
“Looking ahead, the BSP will continue to take a measured approach in deciding on further monetary easing,” he said.
“The BSP will remain data-dependent in its pursuit of price stability conducive to sustainable economic growth and employment,” Remolona added.
In the coming months, it is possible for inflation to remain below the 2 percent level, Michael Ricafort, RCBC chief economist, said, adding, “up to August 2025, mathematically due to higher base effects and at 2 percent levels from September-December 2025.”
This will bring the full-year average inflation rate close to 2 percent, or possibly below the BSP inflation target of 2 percent to 4 percent.
“That could justify further BSP rate cuts that would match any future Fed rate cuts from 2025-2027, with another -0.25 BSP rate cut possible on the next rate-setting meeting on June 19, 2024,” Ricafort said.
Insulating the economy
A further deceleration in inflation points to a copious space for the BSP to ease monetary policy and help insulate the domestic economy from fallout from US tariff policy, Nicholas Mapa, chief economist at Metropolitan Bank & Trust Co., said.
“BSP says the inflation outlook and challenging external environment allow for a shift to an accommodative stance,” he said.
“We expect BSP to cut in June, with the (policy rate) possibly brought down to 4.75 percent should the inflation outlook remain manageable,” Mapa said.
Caution warranted
“However, the upcoming GDP data will be a key factor in shaping the BSP’s decision. A weaker-than-expected growth figure could solidify the case for a rate reduction,” BPI’s Neri said.
But when it comes to rate cuts, caution is justified, he said.
“Cutting the policy rate too aggressively could make the Philippine economy vulnerable to a sudden reversal in the Federal Reserve’s stance, which might compel the BSP to implement substantial rate hikes in a worst-case scenario,” Neri added.
The next BSP policy meeting is on June 19. (with additional reporting by Jocelyn Montemayor)
