April inflation seen easing further to 1.6% on cheaper food

Inflation likely dropped to 1.6% in April, continuing its downward trend from 1.8% in March, driven largely by cheaper food items, according to an economist.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said last week that several recent policy moves and market conditions helped temper price increases.

“The initial implementation of the maximum suggested retail price of imported rice on January 20, 2025, the declaration of a food security emergency on February 3, 2025, as well as world rough rice prices at the lowest in more than three years, could all help further reduce local rice prices, which account for about 9 percent of the inflation, and also support benign inflation,” Ricafort explained.

He added that favorable weather in agricultural areas, particularly in Northern Luzon, has boosted crop output and increased supply. For example, tomato prices significantly dropped beginning in February due to a supply glut in parts of Northern Philippines, helping ease pressure on vegetable prices.

The economist also cited the Department of Agriculture’s price cap on pork as another factor that contributed to lower inflation.

“Lower US dollar/peso exchange rate in April 2025 [at] 56 levels could have led again to lower importation costs that could lead to some easing in overall inflation,” he added.

The Philippine Statistics Authority is set to release the official April 2025 inflation data on May 6.

Ricafort said that inflation could remain at or below the 2% level in the coming months, staying well within the Bangko Sentral ng Pilipinas’ target range of 2% to 4% and potentially paving the way for more policy rate cuts.