Iloilo Inflation Hits 5.4%, Highest in Region

Inflation in Iloilo province accelerated to 5.4% in January 2025, while Iloilo City posted a 5.1% increase, making them the highest in Western Visayas and significantly above the national average of 2.9%, according to the latest report from the Philippine Statistics Authority (PSA).

The surge in prices was primarily driven by soaring rice costs, which rose by 19.0% in the province and 15.0% in Iloilo City, reflecting the persistent strain on agricultural productivity, according to the Iloilo-based Institute of Contemporary Economics (ICE).

“Declining agricultural productivity would have a significant impact on inflationary prices,” ICE noted in its analysis, warning that local production struggles could continue to push prices upward in the coming months.

Rising Food and Housing Costs Drive Inflation

Food prices remained the dominant inflationary pressure, particularly in Iloilo province, where overall food inflation surged, led by the sharp increase in rice prices.

Despite an increase in palay production in the fourth quarter of 2024, the poor harvests from the first three quarters continued to weigh on supply. The ICE, however, expressed optimism that the recent production boost could help stabilize rice prices in the coming months.

For Iloilo City, the rise in housing rentals by 8.4% contributed significantly to inflation, offsetting the decline in electricity rates.

The cost of transportation saw mixed movements, with gasoline and diesel prices dropping, but the price of vehicle tires rising sharply.

Sin Products and Restaurants Also See Price Hikes

Apart from food and housing, alcohol and tobacco products saw double-digit price increases, contributing significantly to overall inflation.

Education services also became more expensive, further straining household budgets.

Prices for restaurants and accommodation services continued to rise, particularly in dining establishments, as businesses struggled with higher operational costs.

“The higher costs of doing business from the impact of the real property tax hike and the minimum wage increase in November are now being passed on to consumers,” the ICE analysis noted.

Agriculture and Policy Interventions May Ease Inflation

Despite the general decline in palay production in 2024, Iloilo province recorded a strong fourth-quarter harvest, which could gradually help ease rice prices.

“The recency of this hike in production will likely seep into the market and reduce (or at least temper) rice prices in the coming months,” ICE observed.

Government agencies are also expected to implement measures to support local farmers and improve the stability of food supply, including subsidies for seed varieties resistant to climate fluctuations and enhanced farm-to-market logistics.

While the BSP remains optimistic about national inflation staying within the 2-4% target range, the persistent inflationary pressures in Iloilo points to the challenges of localized price movements influenced by agricultural production, taxation policies, and business costs.