Inflation slowed to 1.4 percent in April, the lowest in five years, thanks to falling prices for food and transport, according to the Philippine Statistics Authority (PSA).

This marks a decrease from 1.8 percent in March and stays slightly above the 1.2 percent recorded in November 2019.

Rice prices saw the most significant drop, falling 10.9 percent from the previous month, as regular milled rice prices declined to P44.45 per kilo from P46.09 in March.

The reduction in rice prices is attributed to various government measures, including lower import tariffs and food security efforts, including the Kadiwa program which sells rice for as low as P20 per kilo in select markets. Vegetable prices increased at a slower pace, rising just 2.3 percent compared to 6.9 percent in March, while fish and seafood prices saw a more modest increase of 4.3 percent.

Transport costs also dropped by 2.1 percent, a notable improvement from the previous month. Meat prices, however, continued to decline more slowly due to the lingering effects of African swine fever (ASF), with a 7.7 percent drop compared to 8.2 percent in March.

Special Assistant to the President for Investment and Economic Affairs, Secretary Frederick Go, welcomed the inflation news, calling it a “welcome relief” for Filipino households. “This should help improve real GDP growth for the country,” he said.

Economists are optimistic about future inflation trends. HSBC Southeast Asia economist Aris Dacanay noted that weaker global demand, especially due to high US tariffs on Chinese imports, is likely to keep prices down. Core inflation remained stable at 2.2 percent, and Dacanay predicts that goods under core inflation could continue to see lower prices as global trade patterns shift.

Meanwhile, the Department of Agriculture (DA) has stepped up efforts to stabilize food prices. The DA has reactivated the Inter-Agency Livestock Data Analytics Group to develop strategies for maintaining price stability in the agriculture sector. They’ve also expanded Kadiwa stores, which now number over 600 nationwide, offering cheaper food alternatives directly from producers to consumers.

House Speaker Martin Romualdez credited the government’s concerted efforts in stabilizing rice prices, including the amended Rice Tariffication Law (RTL), which now allows the National Food Authority (NFA) to release buffer stocks during supply shortages. “The continuous drop in inflation, especially in food prices, is a result of these strategic actions,” he said.

Inflation between January and April averaged 2 percent, within the government’s target range of 2-4 percent.

This is mainly attributed to lower food inflation, especially in rice, which has seen a 10-month consecutive decline. The Department of Economy, Planning, and Development (DEPDev) also pointed to successful government policies in keeping food prices in check.

Undersecretary Rosemarie Edillon of DEPDev emphasized that the key to keeping inflation low lies in maintaining close monitoring of prices and boosting production. “We will continue to work towards lowering food costs and improving access to basic goods for every Filipino household,” she added.

Looking ahead, economists like Bank of the Philippine Islands chief economist Jun Neri suggest that the decline in inflation could prompt the Bangko Sentral ng Pilipinas (BSP) to cut interest rates, potentially easing the cost of loans and boosting business activity. Neri noted that the lower transport costs and food prices are helping the country’s resilience in the face of global economic uncertainties.

While the Philippine economy is showing signs of strength, challenges remain, particularly with attracting direct foreign investments, which continue to face ownership restrictions. However, lawmakers and economic planners are hopeful that continued policy coordination will ensure sustained growth and price stability in the coming months.