By Aubrey Rose A. Inosante, Reporter
Inflation subsided to its lowest annual rate in almost five years in March, as food and transportation expenses increased at a more gradual rate.
Initial figures from the Philippine Statistics Authority (PSA) indicated that the consumer price index climbed to 1.8% in March, down from 2.1% in February and 3.7% a year earlier.
This was within the 1.7%-2.5% prediction from the Bangko Sentral ng Pilipinas (BSP), though it was slightly below the 2% average estimate in a BusinessWorld survey of 18 economists conducted last week.
The March figure marked the lowest in 58 months or since the 1.6% recorded in May 2020 during the peak of the coronavirus pandemic.
For the initial quarter, inflation averaged 2.2%, comfortably within the central bank’s 2-4% objective.
National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan remarked that the ongoing decrease in inflation reflects the success of government measures to stabilize prices.
“While the inflation rate continues to decline and remain within the targeted range, we commit to observing risks and shocks, particularly concerning expected increases in electricity rates and elevated prices of fish and meat, and addressing them through timely and targeted actions,” he indicated.
Core inflation, which excludes erratic food and fuel prices, eased to 2.2% in March from 2.4% in the prior month and 3.4% a year ago.
“The primary factor for the decreased inflation rate in March 2025 compared to February 2025 is the slower rise in the costs of food and non-alcoholic drinks, which increased by 2.2%,” National Statistician Claire Dennis S. Mapa stated in a mix of English and Filipino on Friday.
The food and non-alcoholic beverages index rose to 2.2% in March, decelerating from 2.6% in February and 5.6% in the same month of 2024.
Food inflation further subsided to 2.3% in March from 2.6% a month earlier and 5.7% the previous year.
This was largely attributed to cereals and cereal products, which saw a decrease to 5.2% in March from a 3% decline in February and a reversal of the 17.3% surge in the same month last year.
Rice inflation further shrank to 7.7% in March from a 4.9% decrease in February. This represented the lowest rice inflation since the 8.4% drop in March 2020, Mr. Mapa explained.
“Rice prices have significantly dropped; as you may recall, when the tariff reduction began, the decline in rice prices was quite gradual. However, this March, a substantial drop has been noted — overall rice reduction is -7.7%,” Mr. Mapa added.
Executive Order 62, which came into effect in July 2024, reduced tariffs on rice imports to 15% from 35% until 2028 in an effort to mitigate inflation.
The Department of Agriculture (DA) declared a food security emergency concerning rice in February, which allowed the National Food Authority to release buffer stocks at subsidized rates.
The DA also further decreased the maximum suggested retail price (MSRP) of 5% broken imported rice to P49 per kilogram from P52 per kilogram, effective March 1.
According to Mr. Mapa, the national average price of regular milled rice dropped by 9.8% to P46.09 in March compared to P51.11 in the same month last year.
The average price of well-milled rice fell by 7.4% to P52.25 from P56.44 in March 2024.
Meanwhile, the price of special rice decreased to P60.15 per kilogram from P64.75 in the same month a year prior.
Mr. Mapa highlighted the annual price growth of meat and other parts of slaughtered animals, particularly pork. It eased to 8.2% in March from 8.8% in the previous month.
Simultaneously, transport inflation contributed to the slower inflation in March, contracting to 1.1% from the 0.2% drop in February.
Gasoline prices declined at a quicker rate to 7.5% in March from a 4.7% decline in the prior month. Diesel prices also fell at a faster rate to 5% in March, down from the 3.4% decrease in February.
In March, adjustments in pump prices resulted in a net reduction of P1.50 per liter for gasoline, P1.10 per liter for diesel, and P2.40 per liter for kerosene.
“Additionally, slower increases in the prices of other road passenger transport, which had an inflation rate of 0.2%, contributed to the decrease in transport inflation. This specifically includes tricycle fares,” Mr. Mapa remarked.
He also noted the slower annual increase in the restaurants and accommodation services index, which stood at 2.3% in March compared to 2.8% a month earlier.
Meanwhile, the PSA identified pork as the key driver of the March inflation with a 2.8% inflation rate. It was followed by restaurants, cafes, poultry (10.8%), rentals (1.6%), and other pelagic fish (2.4%).
“In our food basket, meat prices are high, followed by fish. Vegetable prices have slightly decreased but continue to remain relatively elevated. The significant meat price levels are mainly due to pork, which has been influenced by supply challenges relating to ASF (African Swine Fever),” Mr. Mapa explained.
Furthermore, inflation for the lowest 30% of income households continued to decelerate to 1.1% in March from 1.5% in February and 4.6% a year ago.
Consumer prices in the National Capital Region (NCR) relaxed to 2.1% in March compared to 2.3% in February. Outside NCR, inflation diminished to 1.8% from 2%.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the slower inflation in March to improved weather conditions that tempered the rise in food and vegetable prices, particularly rice.
He observed that global rice prices are at their lowest in over three years, or since November 2021.
Mr. Ricafort also mentioned the stronger peso against the US dollar, which has helped reduce import prices and overall inflation, along with lower international crude oil prices.
Analysts noted that the March inflation figure provides the central bank with the opportunity to lower interest rates during next week’s meeting.
“The more manageable inflation at 1.8% in March 2025, which is now slightly below the lower end of the 2%-4% BSP inflation target, would support monetary easing, particularly a potential -0.25 BSP rate cut as soon as the April 10 BSP rate-setting gathering,” Mr. Ricafort conveyed in a Viber message.
The BSP unexpectedly kept rates steady during its February policy review, maintaining the benchmark at 5.75%. This followed three consecutive 25-bp reductions in’s meetings in August, October, and December.
“Consistent target inflation and decelerating growth momentum should be sufficient to persuade the Bangko Sentral ng Pilipinas to implement a 25 basis point rate cut next week,” Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., stated on the social media platform X.
BSP Governor Eli M. Remolona, Jr. previously indicated that a rate cut remains “on the table” at this month’s Monetary Board meeting, suggesting “a few more” rate reductions for the remainder of the year.
