The Philippines’ headline inflation eased to 1.8 percent in March 2025, down from 2.1 percent in February and significantly lower than the 3.7 percent recorded in March 2024.
The central bank said this forecast reflects a continued slowdown in price increases, supported by improved supply conditions and currency appreciation, even as some consumer costs remain elevated.
The deceleration was primarily influenced by a lower rise in food and non-alcoholic beverages (2.6 percent from 3.8 percent) and declining transport costs (-0.2 percent from +1.1 percent).
Local banks are getting a competitive boost as the Bangko Sentral ng Pilipinas (BSP) slashes the reserve requirement ratio (RRR) by 200 basis points, injecting at least P300 billion into the financial system, according to the Bank of the Philippine Islands (BPI).
Food inflation was the main driver, rising to 4 percent, while other sectors saw price reductions. Rice prices softened by 2.3 percent, ahead of the government's declaration of a food security emergency to ensure affordability.
Key drivers for the higher December 2024 inflation rate were rising costs in housing, utilities, and transport, according to the Philippine Statistics Authority.
Inflation target retained: The DBCC and BSP upheld the 2.0–4.0% inflation target for 2025–2028 to anchor inflation expectations and ensure price stability.