Philippines 2025 inflation averages 1.7% as December rises

Year-on-year headline inflation increased from 1.5% in November to 1.8% in December, remaining within the Bangko Sentral ng Pilipinas’ forecast range of 1.2% to 2.0% for December.

For the bottom 30% income households, inflation was lower at 1.1% in December and 0.3% for 2025.

Overall, average headline inflation for the full year 2025 was 1.7%, below the government’s inflation target of 3.0% ± 1.0 percentage point, reflecting lower prices of key commodities such as rice and petroleum products, alongside easing demand-side price pressures as core inflation also moderated.

Higher food prices accounted for the bulk of the increase in headline inflation, specifically vegetables, corn, as well as fish and other seafood.

Increases for these items were driven by weather-related disruptions, reduced supply from lower import arrivals, the implementation of the closed fishing season, and a seasonal uptick in demand during the holidays.

Meanwhile, rice prices continued to decline in December, though at a slower pace.

On a seasonally adjusted month-on-month basis, headline inflation rose from nil in November to 0.7% in December.

Core inflation was unchanged at 2.4% in December.

The inflation outlook remains benign, with inflation expected to return towards the target range in 2026 and 2027.

Going forward, the BSP will continue to monitor domestic and external developments that could affect the outlook for inflation and growth, consistent with its data-dependent approach to monetary policy.

Proactive and well-coordinated government measures to stabilize prices and safeguard the purchasing power of Filipino households helped keep inflation low in 2025, according to the Department of Economy, Planning, and Development, following the release of the December 2025 inflation report.

The press release shows “Last modified on January 6, 2026,” and also carries the dateline “JAN. 6, 2025 —” in its text.

The Philippine Statistics Authority reported on Jan. 6 that the country’s full-year headline inflation stood at 1.7%, well below the government’s 2.0%–4.0% target range for 2025.

The PSA report also showed headline inflation inched up to 1.8% in December 2025, from 1.5% in November 2025.

“Despite global headwinds and domestic challenges, the Philippine economy has remained resilient against inflationary pressures due to the government’s timely and targeted interventions. Building on this momentum, the government will continue to pursue prudent fiscal and monetary coordination and advance structural reforms to sustain the downward inflation trend and support inclusive growth in 2026 and beyond,” said DEPDev Secretary Arsenio M. Balisacan.

The slight uptick in December inflation rate can be attributed to the impact of Typhoon Uwan, which disrupted food production.

Food inflation rose from –0.3% to 1.2%.Vegetable inflation accelerated from 4.0% to 11.6%. The rise in vegetable inflation was driven by higher inflation of onions (79.0% from 48.2%), eggplants (29.4% from –6.5%), and pumpkins (20.1% from 8.8%).

Fish inflation increased slightly, from 8.6% to 9.0%, partly due to limited import arrivals. These increases were partly offset by slower inflation in meat products, which declined from 4.2% to 3.0%.

The decrease in the cases of African swine fever helped pull pork inflation down to 4.8% from 7.0%. Surplus supply drove chicken inflation slower from 1.9% to 0.7%.

Rice prices remained moderated, recording a deflation of –12.3% from –15.4%.

The government said it aims to keep inflation within the 2.0% to 4.0% target range for 2026 to 2028, including through a PHP 297.1 billion allocation for the agriculture sector in the 2026 national budget.

DEPDev said the agriculture budget prioritizes boosting farmer productivity and strengthening food security through the construction of farm-to-market roads and bridges.

The budget also covers the development of food hubs, cold storage facilities, and rice mills.

DEPDev said it also funds programs intended to help maintain affordable prices of agricultural products.

To address rising electricity demand and manage energy-related price pressures, the Department of Energy is accelerating the completion of 200 power generation projects, ensuring that committed capacity comes online as scheduled and meets safety and reliability standards.

“These policy initiatives form part of our broader thrust to attain food security, improve human capital, and enhance the quality and efficiency of public service delivery—priorities that enable inclusive, broad-based growth for all Filipinos,” Balisacan added.

The Department of Finance cited the government’s coordinated approach for bringing full-year 2025 inflation down to 1.7%, which it described as the lowest level in nearly a decade.

The DOF said the 2025 average is significantly lower than the 2024 average inflation rate of 3.2%.

The 2025 average is also below the BSP’s target range of 2.0% to 4.0% for 2025.

“This record-low inflation in 2025 reflects the effectiveness of our collective efforts under the strong leadership of President Ferdinand R. Marcos, Jr.,” Finance Secretary Frederick D. Go said.

The DOF said the average inflation rate is also lower than the expected global inflation rate of 4.2% for 2025, based on the International Monetary Fund October 2025 World Economic Outlook report.

Compared to ASEAN-5 economies, the DOF said the Philippines’ 2025 inflation rate remains lower than Vietnam (3.3%) and Indonesia (1.9%).

The DOF said the Philippines’ 2025 inflation rate is just above the January to November average in Malaysia (1.4%) and Thailand (–0.1%).

“The DOF is committed to implement necessary measures to keep inflation manageable and ensure that Filipino families are protected from price shocks,” Secretary Go added.

Rice inflation declined by 12.3% year-on-year, slower than the 15.4% drop in November 2025.

The average retail price of rice was PHP 45.48 per kilogram in December 2025, lower than the PHP 52.21 per kilogram price during the same period in 2024.

The average inflation for the bottom 30% income households improved to 0.3% in 2025, lower than its peak of 5.8% in July 2024 and the average of 4.2% in the same year.

Consistent with the President’s directive, the government said it has rolled out programs to manage the price of essential commodities and expand targeted assistance for vulnerable communities.

The DOF cited lowering the maximum suggested retail price for imported rice and expanding the “Benteng Bigas, Meron Na!” program nationwide, supported by a digital registry intended to ensure the assistance reaches the right beneficiaries.

It also cited the Department of Agriculture setting maximum suggested retail prices for pork and onions, coordinating crop-shifting measures with the National Irrigation Administration, and strengthening market monitoring to enforce price caps and protect consumers.

The DOF said various relief and emergency cash assistance and agricultural support were rolled out in December 2025 to keep essentials affordable and assist communities affected by earthquakes and typhoons.

These included the DA’s farm input support and indemnification. They also included over PHP 7.8 million in relief from the Department of Social Welfare and Development.

Also included is the cash aid to affected tourism workers in coordination with the Department of Tourism.

The National Government also said it continues targeted transport-related interventions to alleviate transport costs.

The Land Transportation Franchising and Regulatory Board temporarily capped transport network vehicle services surge pricing from Dec. 17, 2025, to early January 2026 to ease commuter costs during the holiday season.