Finance Secretary Ralph G. Recto highlighted that the low and steady inflation rate of 2.9% in January 2025 gives the Bangko Sentral ng Pilipinas (BSP) room to cut its policy interest rates, which in turn could boost household spending and economic growth.
The headline inflation rate in January 2025 remained unchanged from last month and is comfortably within the government’s target band of 2% to 4%. Core inflation, which excludes selected volatile food and energy items, also eased to 2.6% in January from 2.8% the prior month.
“Magandang balita ito. This is a strong indicator of the government’s commitment to keeping prices stable and signals that the BSP has more flexibility to further reduce interest rates. Lower interest rates mean cheaper borrowing costs for our consumers and businesses. This will provide greater purchasing power for our people and stronger momentum for investments and growth,” the Finance Chief said.
Due to the lingering effects of last year’s consecutive typhoons, food inflation slightly accelerated to 3.8% from 3.4% registered in December 2024. Higher vegetable prices were among the main contributors to the increase.
Nevertheless, it was offset by lower inflation rates in housing, water, electricity, gas, and other fuels (2.2% from 2.9%), and restaurants and accommodation services (3.2% from 3.8%).
Rice inflation also showed a significant improvement, registering a disinflation of -2.4% in January 2025. This was down from 0.8% in December 2024, and a sharp decline from 22.6% for the same month a year ago.
Both the inflation rate and price levels indicate a steady drop in rice prices since July 2024, with only a slight uptick in October. The decline was faster in January 2025, particularly for imported rice in the National Capital Region (NCR), which posted an average double-digit decrease of 12.5%.
“This is a welcome relief for Filipino consumers. But rest assured, the government will not be complacent. We will remain proactive in implementing interventions to ensure stable and affordable rice prices,” Secretary Recto affirmed.
Meanwhile, non-food inflation remains relatively low at 2.2% in January 2025 from 2.6% in December 2024. This was largely due to slower price increases in rentals, water supply, liquified petroleum gas, as well as restaurants and accommodation services.
New measures to mitigate food and non-food inflation
On February 3, 2025, the Department of Agriculture (DA) declared a food security emergency which would allow the release and sale of rice buffer stocks from the National Food Authority (NFA) at lower prices to select government agencies and to the public through the Kadiwa ng Pangulo sites.
To further stabilize rice retail prices, the DA lowered its maximum suggested retail price (MSRP) of imported rice in Metro Manila to PHP 55 per kilogram starting February 5, 2025, from its original MSRP of PHP 58 per kilogram. This will be implemented nationwide by February 15, 2025.
The DA is also already implementing various interventions to mitigate the impact of the anticipated arrival of typhoons in the first half of the year. In addition, it is ramping up its ongoing vaccination campaign against African swine fever (ASF).
Furthermore, the DA recently created the Agricultural and Fisheries Logistics Office (AFLO) to modernize the farm-to-market supply chain, reduce inefficiencies, and ensure food security.
To ease non-food inflation, the Maharlika Investment Corporation’s (MIC) investment in the National Grid Corporation of the Philippines (NGCP) is expected to lower electricity costs and stabilize the electricity supply in the country.
This supports the government’s other ongoing measures to stabilize power rates to consumers, such as price caps, phased recovery plans, and regulatory reforms to ensure affordability and system reliability.
Starting in January 2025, Manila Water Co., Inc. is likewise implementing an enhanced lifeline program, offering higher discounts to support low-income customers and ensure affordable access to essential water services.
