(mikeligalig.com) – Philippine annual inflation slowed to 0.9 percent in July 2025 from 1.4 percent in June, the central bank reported Wednesday, falling within its projected range of 0.5 to 1.3 percent.
The Bangko Sentral ng Pilipinas (BSP) noted that the average inflation for January to July stood at 1.7 percent, below the government’s 2 to 4 percent target range.
The decline was driven by softer non-food inflation, particularly in electricity, gas, and other fuels, alongside price reductions in certain petroleum products.
Food inflation also moderated, with rice and vegetable prices dropping due to lower global rice prices, adequate domestic supply, and government interventions to stabilize markets.
Month-on-month, seasonally adjusted headline inflation held steady at 0.1 percent in July, while core inflation, which excludes volatile food and energy prices, edged up from 2.2 percent to 2.3 percent.
Analysts say underlying price pressures remain contained, supported by stable domestic demand and supply-side improvements.
The slowdown aligns with trends observed in recent economic analyses.
A 2025 working paper from the Asian Development Bank showed the Philippines’ success in managing food inflation through targeted subsidies and import adjustments, particularly for rice, a staple for millions.
Global commodity price declines, as noted in a July 2025 International Monetary Fund report, have also eased pressures on emerging markets like the Philippines.
However, risks loom. Potential shifts in US trade policy under a new administration and escalating tensions in the Middle East could disrupt oil and food supply chains, key drivers of inflation.
A 2025 study by the Philippine Institute for Development Studies emphasized the need for vigilance, noting that geopolitical shocks could push inflation back toward the upper end of the target range by 2026.
Looking ahead, the BSP projects inflation to dip further below the 2 percent floor in 2025 before stabilizing within the target range in 2026 and 2027.
The central bank reaffirmed its commitment to maintaining price stability to support economic growth and job creation, with analysts expecting steady or slightly tighter monetary policy to counter emerging risks.
The central bank will continue to monitor external and domestic developments closely, with its next policy meeting.
