Phl inflation eases to 1.8% in March 2025, transport a key driver

The Philippine Statistics Authority (PSA) reported that headline inflation slowed further to 1.8 percent in March 2025, down from 2.1 percent in February. This brings the national average inflation rate for the first quarter of the year to 2.2 percent, well below the 3.7 percent recorded in March 2024.

In a press briefing held on 4 April, National Statistician and PSA Undersecretary Claire Dennis Mapa pointed to the declining prices in the transport sector as the primary reason behind the lower inflation. Mapa emphasized that the faster decrease in gasoline prices significantly contributed to the downward pressure on transport costs, which saw a year-on-year drop of 1.1 percent in March from a 0.2 percent decrease in February.

The overall downtrend in inflation was also driven by slower price increases in food and non-alcoholic beverages, which posted a 2.2 percent increase in March, down from 2.6 percent in the previous month. Inflation for restaurants and accommodation services also eased to 2.3 percent from 2.8 percent. Additionally, modest price movements were noted in clothing and footwear, household furnishings and maintenance, health, and recreation-related goods and services, all of which posted slower annual growth.

On the other hand, some commodity groups posted slightly higher inflation rates compared to February. These include alcoholic beverages and tobacco, which rose to 3.6 percent; housing, water, electricity, gas and other fuels at 1.7 percent; and information and communication at 0.4 percent. The remaining groups retained their previous month’s annual rates.

Food inflation at the national level also declined, easing to 2.3 percent in March from 2.6 percent in February. This marked a significant drop from the 5.7 percent food inflation recorded in March 2024. The decrease was largely attributed to the sharper drop in rice prices, which declined by 7.7 percent compared to a 4.9 percent drop in February. Meat inflation also slowed to 8.2 percent from 8.8 percent, while vegetable prices eased to 6.9 percent from 7.1 percent.

Other key food items like corn, flour, bread, bakery products, pasta, fruits and nuts also showed either slower inflation or outright declines. In contrast, faster price increases were seen in fish and seafood, milk and dairy products, oils and fats, and ready-made food products. Sugar and desserts posted a smaller price decrease than in the previous month.

Food inflation contributed 0.8 percentage point to the overall inflation figure for March. The top food groups pushing up inflation were meat products, accounting for 1.7 percentage points; fish and seafood, contributing 1.0 percentage point; and vegetables and related products, adding 0.6 percentage point.

Core inflation, which excludes volatile food and energy items, slowed to 2.2 percent in March from 2.4 percent in February. This marks a further cooling compared to the 3.4 percent recorded a year earlier.

In Metro Manila or the National Capital Region (NCR), inflation followed the national trend and decelerated to 2.1 percent in March from 2.3 percent in February. A year ago, inflation in NCR was at 3.3 percent. The easing was again led by lower increases in food and beverage prices, which slowed to 3.6 percent from 4.3 percent. The transport sector also posted a faster year-on-year drop at 1.6 percent, compared to 1.0 percent in the previous month.

Several other NCR commodity groups posted slower inflation, including alcoholic beverages and tobacco, clothing and footwear, household furnishings and maintenance, health services, and recreational services. Notably, the information and communication index posted a zero percent inflation, a dip from the slight increase seen in February. However, housing and utilities saw a rise in inflation to 2.2 percent, and personal care products and other miscellaneous goods also edged up to 2.5 percent.

Areas outside the NCR, collectively referred to as AONCR, also experienced easing inflation, dropping to 1.8 percent in March from 2.0 percent in February. This was a notable improvement from the 3.8 percent rate in March 2024. The downward shift was attributed to a 0.9 percent annual decline in the transport index, reversing a slight increase recorded in February. Food and beverage prices in the regions grew more slowly at 2.0 percent, while restaurant and accommodation services also saw a notable slowdown from 3.2 percent to 2.5 percent.

Other regional commodity groups such as clothing, housing, health, recreation, and personal care posted slower annual increases. Nonetheless, alcoholic beverages and tobacco registered a higher 3.8 percent inflation, and information and communication rose slightly to 0.6 percent.

Of the regions outside NCR, 10 recorded slower inflation in March. SOCCSKSARGEN remained the region with the lowest inflation rate at -0.2 percent for the fifth month in a row, while Cagayan Valley held the highest at 2.9 percent.