High cost of living persists despite inflation drop

By Juliane Judilla

Despite government claims of achieving the lowest inflation rate in six years, the cost of living for ordinary Filipinos remains high, particularly for essential goods and services such as food, water, and utilities, according to research group IBON Foundation.

IBON’s latest report underscores that while national inflation has slowed, the reality on the ground remains grim, with many unable to feel the benefits of reduced inflation.

“Ordinary Filipinos still struggle to afford basic goods as their budgets are strained by persistently high prices. The low inflation rate is barely felt by the majority because of chronic joblessness, low incomes, and poverty from weak agriculture and domestic industry,” the group stated.

The inflation numbers

The Philippine Statistics Authority recently reported that inflation fell to 0.9% in July 2025, down from 4.4% in July 2024 and 1.4% in June 2025.

The decline was attributed to slower price increases in key sectors such as food and nonalcoholic beverages, utilities (housing, water, electricity, gas), transportation, education services, and personal care.

In Western Visayas, inflation also dropped significantly — from 4.5% in June 2024 to 0.6% in July 2025 — marking the sixth consecutive month of decline in the region.

The slow rise in food prices, particularly for rice and vegetables, was highlighted as a positive development.

However, despite these decreases, IBON Foundation points out that the cost of living for many Filipinos has either remained stagnant or continued to rise since January 2023 — when inflation peaked during the administration of President Ferdinand Marcos Jr.

Persistent price hikes for basic social services

A closer look at essential services reveals that Filipinos are still paying more for basic utilities, even with lower overall inflation.

For example, Metro Iloilo Water District — covering a significant portion of Iloilo City and nearby municipalities — has proposed a rate hike from PHP20 per cubic meter to PHP29.19.

The increase comes despite the agency’s joint venture with Metro Pacific Water Investments Corp. under a public-private partnership since 2019, raising concerns about the privatization of essential services.

The research group cites the increasing financial strain on families, especially as wages remain low and job security remains precarious.

 

More work, lower wages

Despite reports of increased employment in the latest Labor Force Survey, IBON Foundation estimates that 7 out of 10 employed Filipinos work in the informal sector, with irregular, low-paying, and poor-quality jobs.

The minimum wage — currently averaging PHP481 nationwide and PHP513 in Western Visayas — is far below the estimated PHP1,200 needed to cover a family’s basic daily needs.

Meanwhile, a recent survey by Social Weather Stations found that about 16.5 million Filipino families — or roughly 59% — still consider themselves poor or borderline poor.

Weak economic foundations

IBON attributes these ongoing struggles to the country’s weak economic foundations, which have long been neglected by successive administrations.

The agriculture and manufacturing sectors — which could provide sustainable, decent-paying jobs — remain at their lowest levels in over 70 years, leaving millions vulnerable to volatile market forces and rising costs.

“Instead, successive administrations have fixated on attracting foreign investments or maximizing profits for local and foreign big business instead of developing domestic agriculture and Filipino industry,” IBON said.

The group argues this narrow economic strategy has made the country overly reliant on imports and external markets, which continue to drive up prices of essential goods.

The need for comprehensive solutions

IBON says that interventions promoted by government agencies — such as distributing agricultural inputs, offering quick-response loans, and implementing short-term welfare programs — are tokenistic and unsustainable.

The group emphasizes the need for systemic reforms that prioritize strengthening domestic agriculture and Filipino industries to generate jobs, reduce poverty, and keep essential goods affordable.

It also advocates for the provision of free or affordable public services — including education and healthcare — as basic rights that should be guaranteed to all Filipinos.

Without such reforms, the group warns, the country risks remaining trapped in a cycle of economic insecurity, with rising prices, low wages, and joblessness continuing to burden the majority of Filipinos.