THE Philippines’ inflation rate cooled to 0.9% in July 2025, marking its lowest level in nearly six years, according to the Philippine Statistics Authority (PSA).
This significant deceleration from June’s 1.4% is attributed to slower increases in utility costs and a decrease in food prices.
The July figure is also considerably lower than the 4.4% recorded in July 2024, and represents the lowest inflation rate since October 2019 (0.6%). The year-to-date average inflation rate stands at 1.7%, remaining below the government’s target range of 2% to 4% for 2025.
National Statistician Claire Dennis Mapa highlighted the slower increase in Housing, Water, Electricity, Gas, and Other Fuels (2.1% inflation, down from 3.2% in June) as the primary driver of the overall decline.
This sector accounted for 45.1% of the reduction in the national inflation rate. The decrease was largely due to slower electricity price increases (1.3% month-on-month, compared to 7.4% the previous month) and a drop in liquefied petroleum gas (LPG) prices (0.7% versus 1.5% the previous month).
Further contributing to the deceleration was a contraction in the Food and Non-Alcoholic Beverages inflation rate to -0.2%, compared to 0.4% in June.
This sector contributed 43.4% to the overall decline. The contraction resulted from continued deflation in cereals (-11.5%, from -10.3% in June) and a decrease in vegetable prices (-4.7%, from -2.8% in June). The overall decrease in inflation offers some relief amidst ongoing economic concerns.
