Inflation in Iloilo Slows As Housing Rental Costs Climb

By Francis Allan L. Angelo

While Western Visayas posted its lowest annual inflation in over a year at 0.6% in June 2025, localized price pressures were felt in Iloilo province and Iloilo City on the backs of steep rises in housing rentals and electricity costs.

Inflation refers to the rate at which the general level of prices for goods and services rises, eroding purchasing power over time. It is a key economic indicator that affects everything from household budgets to interest rates, wage negotiations, and government policy.

A moderate level of inflation is considered healthy in a growing economy, but when it becomes too high or too low, it can disrupt economic stability.

Western Visayas’ inflation slowdown – from 4.8% in June 2024 and 1.5% in May 2025 to just 0.6% in June – was largely attributed to diminished costs in key sectors including Housing, Water, Electricity, Gas and Other Fuels and negative food inflation, based on data from the Philippine Statistics Authority (PSA)

The regional inflation average for the first half of the year now stands at 2.3 percent, well below the national target of 3.3 percent set by the Bangko Sentral ng Pilipinas, according to Iloilo-based think tank Institute of Contemporary Economics (ICE).

SLOWDOWN

All six provinces and one highly urbanized city in the region saw declining inflation in June:

• Iloilo Province slowed down from 2.8 in May 2025 to 1.7 percent in June.
• Iloilo City, while slowing to 2.7 percent from 3.3 percent, still ranked 9th highest in inflation nationwide.
• Capiz and Guimaras posted modest inflation of 0.5 percent each.
• Aklan and Antique saw accelerated deflation at -1.8 percent and -2.2 percent, respectively.

ICE pointed to cheaper rice under the ₱20 per kilo program and subdued fuel prices as central factors to the slower inflation.

The ICE analysis highlighted that the main drivers behind the Western Visayas inflation slowdown include the steep drop in the cost of Housing, Water, Electricity, Gas and Other Fuels, which fell from 4.7 percent in May to just 1.0 percent in June.

Food and Non-Alcoholic Beverages also posted a negative inflation rate of -0.5 percent, reversing a slight increase the month prior.

Other sectors that saw lower inflation include Clothing and Footwear (2.4 percent), Furnishings and Household Maintenance (5.7 percent), Health (2.1 percent), and Personal Care and Miscellaneous Goods and Services (2.5 percent).

“Lower electricity prices, fuel deflation, and significant intervention in rice pricing helped rein in costs for the month,” said ICE.

STAPLES MORE AFFORDABLE

Food inflation in the region fell further to -0.8 percent in June from -0.1 percent in May, marking a dramatic contrast from the 8.2 percent food inflation recorded in June 2024.

The largest contributors to this decline were Cereals and Cereal Products, which recorded a deflation of -9.7 percent, and Vegetables and Tubers at -0.5 percent.

Cereal prices alone accounted for a substantial -2.85 percentage point contribution to overall food inflation, driven heavily by government-subsidized rice under the PHP 20-per-kilo program.

Rice prices fell as much as 23.5 percent in Aklan, the biggest decline in the region, reflecting strong supply chain effects and policy impact.

“The real and perceived effects of government intervention through the PHP 20/kilo rice program have translated into actual price stability,” ICE stated.

“Whether this artificial market intervention will be sustained remains a question with the viability of rice farming being a key consideration to be watched. Government subsidies particularly in post-harvest processing will continue to be necessary to maintain the P20/kilo support price.”

FUEL AND TRANSPORT IMPACT

Fuel prices continued to fall across the region, aiding the broader deceleration.

Antique saw diesel prices drop by 10.6 percent and gasoline by 14.2 percent. Guimaras recorded the weakest fuel deflation but offset it with a 12.7 percent rise in sea and inland waterway passenger transport.

ICE attributed this trend to a global slowdown and expanded oil production capacity.

“Continued supply from OPEC+ and a cautious global trade outlook will help maintain low fuel prices in the near term,” the think tank added.

Transport inflation, while still negative, moved slightly upward from -3.0 percent to -2.4 percent.

HOUSING AND RENT

Yet beyond the broad regional figures lie pockets of inflationary pressure – most notably in Iloilo province and Iloilo City – where the cost of urban living continues to weigh heavily on household budgets.

While housing-related costs such as electricity and water fell in Aklan, Antique and Capiz, Iloilo and Iloilo City faced upward pressure on rental prices.

Rents increased by 11.9 percent in Iloilo and 4.9 percent in Iloilo City, according to ICE’s analysis of PSA data.

“This divergence highlights urban-rural dynamics,” ICE said. “Urbanized areas with dense demand continue to feel housing market strain, even amid broader price relief.”

RELIEF

The inflation rate for the Bottom 30% Income Households in Western Visayas fell to -1.0 percent in June, from 0.3 percent in May.

This group had faced 6.4 percent inflation just a year ago.

Their primary relief came from a -3.0 percent drop in Housing, Water, Electricity, Gas and Other Fuels, and a -1.9 percent decrease in Food and Non-Alcoholic Beverages.