Inflation holds steady at 1.7% in October 2025

Philippine Headline inflation steadied in October as slower price increases in vegetables and meat offset higher utility costs during the month, the Philippine Statistics Authority (PSA) said on Wednesday.

PSA data showed that the consumer price index (CPI) stood at 1.7% in October, unchanged from September’s print but eased from 2.3% a year ago.   

October also marked the eighth straight month that inflation fell below the central bank’s 2-4% target band.   

In the 10 months to October, average inflation matched the BSP’s full-year target of 1.7%.

Meanwhile, core inflation, which discounts volatile prices of food and fuel, eased to 2.5% from 2.6% in September. Still, it was slightly faster than the 2.4% print in October 2024. 

This brought year-to-date core inflation to 2.4%, easing from the 3.1% clip seen in the comparable year-ago period.

Housing, water, electricity, gas and other fuels contributed most to the CPI during the month and posted a 2.7% inflation rate, National Statistician Claire Dennis S. Mapa said.

Electricity alone posted a 4.1% inflation in October, accelerating from the 1.2% clip seen in September. 

In October, the Manila Electric Co. hiked the overall electricity rate by P0.2331 per kilowatt-hour (kWh) to P13.3182 per kWh. This means residential customers consuming 200 kWh had to pay an additional P47 in their bill last month. 

Meanwhile, inflation for water supply also quickened to 5.7% in October from 5.3% a month earlier.

In September, the Metropolitan Waterworks and Sewerage System okayed the proposed P0.14 per cubic meter (cu.m.) hike for Maynilad and a P0.15 per cu.m. rollback for Manila Water for the October-December period.

Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan said the government’s efforts to manage supply conditions and ensure price stability helped inflation hold steady in October.   

“The steady headline inflation rate shows that our coordinated interventions are helping to maintain adequate supplies and keeping essential goods affordable,” he said in a statement. “We remain vigilant in managing risks from weather disturbances, global market volatility, and other domestic factors that may affect prices in the coming months.”

Meanwhile, slower inflation for food and non-alcoholic beverages tempered inflationary pressures in October.

The heavily weighted food and nonalcoholic beverage index eased to 0.5% in October from the 1% clip logged the month earlier.

“Our food basket, food and non-alcoholic beverages, has the biggest weight in the inflation basket at 37.75% more or less,” Mr. Mapa said.

Food inflation slowed year on year to 0.3% from 0.8% the previous month and 3% in October 2024. 

This came as inflation for vegetables, tubers, plantains, cooking bananas and pulses eased to 16.6% from 19.4% in September.

Likewise, the PSA recorded slower inflation for meat and other parts of slaughtered land animals in October at 5.2% from 6% a month ago.

However, Mr. Mapa noted that inflationary pressures from food remain as prices of fish and other seafood picked up to 8.2% from 7.9% in September.

RICE PRICES

Rice inflation remained in the negative for the tenth month in a row at -17% in October from -16.9% in September.

Mr. Mapa said rice prices continued to decline amid increased unmilled rice production in the last quarter of the year.

“Our production is high, but of course, prices in the world market are also starting to drop. So that actually affected, in a good manner, our retail rice prices, because it continues to decline,” he said in Filipino.

Citing PSA data, Mr. Mapa said a kilo of regular-milled rice was sold at an average price of P40.09 in October, dropping by 20.2% from P50.22 a year ago. Well-milled rice was also cheaper at an average P46.49 per kilo, down 15.9% from P55.28 last year. Meanwhile, special rice was priced at P56.39 per kilo last month, falling by 11.8% from P63.97 in October 2024.

“Despite the import ban on rice, the price of the grain was largely stable while meat and dairy prices eased, offsetting the increase in utility rates,” Aris D. Dacanay, economist for the Association of Southeast Asian Nations at HSBC Global Investment Research, said.

Earlier, President Ferdinand R. Marcos, Jr. ordered a 60-day freeze on regular and well-milled rice imports from Sept. 1 to Nov. 2 to support local farmers amid the harvest season and to stabilize rice prices.

The suspension has been extended until yearend, with the government eyeing to open an import window in January before reimposing the ban from February to April.

Meanwhile, PSA data also showed that inflation in the National Capital Region (NCR) picked up to 2.9% in October from 2.7% in the previous month and 1.4% in the same month in 2024.

Outside NCR, inflation eased to 1.3% from 1.5% in September and the 2.6% clip a year ago.

Central Visayas still saw the highest inflation print among other regions at 2.6%, while prices in Bangsamoro Autonomous Region in Muslim Mindanao declined the fastest at -1.3%.   

Inflation for the bottom 30% of income households declined at a faster pace of -0.4% in October from -0.2% in September. For the 10-month period, it averaged 0.3%, slower than 4.5% a year ago.

INFLATION AHEAD

The BSP still sees inflation settling below its 2-4% target by yearend, citing the recent easing of rice prices in the country.

“Inflation is projected to average below the low end of the target range in 2025, primarily due to the easing of rice prices in previous months,” it said in a statement. “The risks to the inflation outlook are limited as price pressures are expected to ease amid stabilizing global commodity prices.”

However, the central bank said the outlook for domestic economic growth has weakened.

“This outlook reflects in part the impact on business confidence of governance concerns about public infrastructure spending. Indications of slowing demand also reflect lingering uncertainty from the external environment,” the BSP said.

For November, Mr. Mapa said fuel prices will likely drive up inflationary pressures following the latest pump price adjustment.

Oil firms in the country implemented fuel price hikes on Tuesday, amounting to P1.70 per liter for gasoline, P2.70 per liter for diesel and P2.10 per liter for kerosene.

Mr. Mapa said they will continue to monitor the impact of recent typhoons on consumer prices, as well as Mr. Marcos’ earlier directive to impose a price freeze on basic and prime commodities until yearend.

“There are threats to overall food inflation. Some items are increasing, (such as) the price of fish (and) vegetable,” Mr. Mapa said, noting vegetable prices are sensitive to weather conditions.

In a note on Wednesday, Chinabank Research said inflation will likely remain low in the coming months, but noted that pump price adjustments and the weather’s impact on food prices still pose risks.   

“We expect overall inflation to remain low for the rest of the year, though upward price pressures may arise from energy — a hefty increase in local pump prices was announced this week — as well as from weather-sensitive food prices,” it said.

Meanwhile, HSBC’s Mr. Dacanay said the benign inflation and clearer rice policies could push the BSP to cut rates by 25 basis points (bps) in December.

“All in all, we think October inflation plus the clarity over rice policies strengthen the case for a December rate cut by the BSP,” he said. “With no issues in inflation, monetary policy has the runway to pump the economy to, hopefully, offset the fiscal fallout brought by a sharp drop in public infrastructure spending.”

Since it began its easing cycle in August 2024, the Monetary Board has cut its key policy rate by 175 bps to a three-year low of 4.75%. 

BSP Governor Eli M. Remolona, Jr. has signaled further easing until early next year to support the economy as the ongoing flood control anomalies have hit business sentiment, clouding their growth outlook.   

The Monetary Board will hold its last rate-setting meeting this year on Dec. 11.

Source: Business World

Typhoons could slow PHL growth

The Philippine economy could face stronger inflationary pressures and slower growth as increasingly frequent and severe typhoons disrupt supply chains and farm production, the International Monetary Fund (IMF) said.

“The Philippines is highly exposed to natural hazards, particularly typhoons, which are the most frequent and costliest climate shocks in the country,” the IMF Regional Office for Asia and the Pacific said in a Facebook post. “These events represent supply shocks, creating inflationary pressure and reducing economic activity.”

The IMF estimated that a Category 5 storm could raise headline inflation by 0.4 percentage point (ppt) and food inflation by 0.7 ppt, based on regional data from its latest Article IV consultation with Manila.

Super Typhoon Ragasa, locally named Nando, was one such storm that battered the country late last month, causing floods and an initial P1.38 billion in agricultural damage.

Data from the Department of Agriculture showed that the southwest monsoon and typhoons Mirasol, Nando and Opong have caused P7.71 billion in combined losses. Farmers and fisherfolk lost 472,701 metric tons in production and 205,016 hectares of farmland.

The IMF said such weather shocks could drag agricultural labor productivity by as much as 2.5% and shave 0.4 ppt off economic growth, with estimated damage amounting to about 0.2% to 0.3% of gross domestic product (GDP).

Inflation accelerated to 1.7% in September from 1.5% in August, the fastest in six months, the Philippine Statistics Authority said. While slower than 1.9% a year earlier, the pickup reflected higher food prices after recent typhoons.

The agency said vegetable prices rose 19.4% in September, up from 10% in August — the steepest increase since January. Food inflation climbed to 0.8% from 0.6% in the previous month.

Average inflation this year stands at 1.7%, matching the Bangko Sentral ng Pilipinas’ (BSP) full-year target but slightly above the IMF’s 1.6% forecast.

The economy expanded by 5.4% in the first half, slower than last year’s 6.2% but in line with the IMF’s full-year outlook.

Economy Secretary Arsenio M. Balisacan said growth might soften further in the third quarter due to typhoon-related disruptions but could still meet the lower end of the government’s 5.5% to 6.5% goal. The third-quarter GDP data will be released on Nov. 7.

The IMF said monetary authorities should carefully balance inflation control with the need to support growth after natural disasters. “Post-disaster, monetary policy must carefully weigh trade-offs between anchoring inflation expectations and supporting economic recovery,” it said.

The BSP delivered its fourth straight 25-basis-point (bp) rate cut on Oct. 9, bringing its benchmark rate to a three-year low of 4.75%. It has reduced borrowing costs by 175 bps since August 2024.

“Fiscal policy is central to building climate resilience before disasters strike, to help mitigate the macro impacts of natural disasters,” the IMF added.

Source: Business World

Inflation seen to climb as upside risks linger

Inflation is projected to climb in the coming months as supply-side pressures and the extension of rice import restrictions threaten to push prices higher, which could prompt the Bangko Sentral ng Pilipinas (BSP) to keep policy rates unchanged.

Following the slight uptick in inflation to 1.7 percent in September from 1.5 percent in August, analysts said this may mark the start of a gradual pickup after months of subdued readings, with weather-related disruptions and policy measures posing upside risks toward year end.

HSBC ASEAN economist Aris Dacanay said that while September’s below-consensus figure still falls below the BSP’s two to four percent target range, rice prices would be a key factor to watch in the next few months after the government extended its rice import ban until the end of the year.

“This is a major upside risk to inflation that needs to be monitored,” he said. “But importers have frontloaded their rice orders in anticipation of the ban, leading to ample supply by end-August. If local farmers were able to harvest before Typhoon Nando hit, rice supply may be sufficient to keep prices stable through year end.”

Despite the soft inflation reading in September, HSBC expects the BSP to pause its easing cycle this week before resuming rate cuts in December.

“We think September inflation sets the stage for a quarter-point rate cut in the fourth quarter to 4.75 percent. But we still expect the BSP to wait for more data on gross domestic product and rice prices before continuing its easing cycle,” Dacanay said.

He added that the policy rate could fall to 4.50 percent by the first quarter of 2026 if inflation remains stable.

Economists at Citi echoed the view that the BSP would likely stay on hold in October, even as it eyes further rate cuts toward the end of the year.

“Following tame inflation readings in September, we continue to expect a gradual rebound of the headline into the three-percent handle in 2026,” Citi said.

“Growth concerns could eventually resurface, leading to a cut before the end of the year. However, as economic data is so far mixed, BSP will probably pause in the October meeting.”

Citi expects inflation to stay between 1.3 and two percent year-on-year through the first quarter of 2026 before rising to around 3.5 percent by end-2026.

BPI lead economist Jun Neri also flagged that inflation risks remain tilted to the upside, particularly due to weather disturbances and import restrictions.

Neri expects inflation to stay near two percent for the rest of 2025 before climbing to around 3.5 percent by mid-2026 and nearing four percent by the third quarter next year as base effects fade and supply risks persist.

“With inflation likely to pick up in the coming months, the pace of monetary easing may slow down,” Neri said. “A more conservative approach is justified as cutting rates aggressively could leave the economy vulnerable to inflation shocks that might force a sharp policy reversal later on.”

The BSP has so far cut policy rates by a total of 150 basis points since August 2024, bringing the benchmark rate to five percent.

The Monetary Board is scheduled to hold its final policy review for the year on Dec. 11.

Source: Philstar