INFLATION RATE
Inflation eases to 0.9% in July 2025 — PSA
MANILA – The Philippines’ headline inflation rate continued its downward trend, easing to 0.9 percent in July 2025, according to the latest data from the Philippine Statistics Authority (PSA). This figure represents a decline from the 1.4 percent recorded in June 2025 and is significantly lower than the 4.4 percent inflation rate in July 2024. The national average inflation for the period of January to July 2025 now stands at 1.7 percent.
Main drivers of the downtrend
The primary factor contributing to the slowdown was the slower annual increase in the housing, water, electricity, gas, and other fuels index, which rose by 2.1 percent in July, down from 3.2 percent in the previous month.
The PSA also cited the decrease in the food and non-alcoholic beverages index, which saw an annual decline of 0.2 percent in July, a reversal from its 0.4 percent increase in June. Additionally, the transport index recorded a faster annual drop of 2.0 percent, compared to a 1.6 percent decline in the preceding month.
Other commodity groups that exhibited slower inflation rates included:
- Education services, which eased to 4.3 percent from 5.3 percent.
- Personal care, and miscellaneous goods and services, which decreased to 2.3 percent from 2.4 percent.
Commodity groups with higher inflation
Despite the overall slowdown, several commodity groups saw accelerated annual growth rates in July. These include:
- Alcoholic beverages and tobacco (4.2% from 3.8%)
- Clothing and footwear (1.8% from 1.7%)
- Health (2.6% from 2.4%)
- Information and communication (0.5% from 0.4%)
- Restaurants and accommodation services (2.3% from 2.1%)
Major contributors to overall inflation
The top three commodity groups that contributed most to the July 2025 inflation rate were:
- Housing, water, electricity, gas and other fuels, with a 47.3 percent share, or 0.4 percentage points.
- Restaurants and accommodation services, with a 24.7 percent share, or 0.2 percentage points.
- Alcoholic beverages and tobacco, with a 14.2 percent share, or 0.1 percentage point.
Food inflation declines
Food inflation at the national level experienced an annual decline of 0.5 percent in July, a significant drop from the 0.1 percent increase in June. This is a stark contrast to the 6.7 percent food inflation recorded in July 2024.
The decrease in food inflation was largely driven by the faster annual decline in the rice index (15.9% from 14.3%) and the vegetables, tubers, plantains, cooking bananas and pulses index (4.7% from 2.8%).
Inflation by geographic area
Areas outside NCR (AONCR): The inflation rate in AONCR similarly eased to 0.7 percent from 1.1 percent in June. The main contributor to the deceleration was the annual decline in the food and non-alcoholic beverages index. Five regions in AONCR recorded annual declines in their inflation rates, with the Bangsamoro Autonomous Region in Muslim Mindanao seeing the steepest decline at 1.7 percent. The Ilocos Region remained the area with the highest inflation rate at 1.9 percent.
National Capital Region (NCR): Inflation in NCR also decelerated, slowing to 1.7 percent from 2.6 percent in June. The downtrend was mainly influenced by the slower annual increase in the housing, water, electricity, gas, and other fuels index.
