10 developments in inflation, labor and infrastructure in 2025

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Early January 2026 has produced some positive economic news for the Philippines and many Asian countries. Here is my list.

One, the Philippines’ inflation for December was 1.8 percent, so the full-year 2025 inflation is 1.7 percent, much lower than 5.8 percent in 2022, six percent in 2023 and 3.2 percent in 2024, according to data from the Philippine Statistics Authority (PSA).

Two, with this declining inflation trend, the Bangko Sentral ng Pilipinas has more reason and justification to further reduce interest rates. From a peak of 6.5 percent until July 2024, down to 4.75 percent last October-November 2025, then 4.5 percent last December, a cut to 4.25 percent this coming February is expected.

Three, among major economies in Asia, two have a deflation trend: China from two percent in 2022 to 0.2 percent in both 2023-2024 and zero in 2025 (January-November) and Thailand from 6.1 percent in 2022 to -0.1 percent in 2025. Others have declining inflation – India, South Korea, Indonesia, Malaysia, Singapore and Taiwan. Only Japan has rising inflation, from 2.5 percent in 2022 to 3.3 percent in 2025.

Four, our unemployment rate last November was reported yesterday by the PSA at 4.4 percent, so the 2025 (January-November average) is now 4.2 percent, higher than 3.8 percent in 2024 but lower than 4.4 percent in 2023 and 5.4 percent in 2022.

Five, other Asian neighbors also have a mild decline in unemployment, from 2022 to 2025 respectively: China from 5.6 to 5.2 percent; Indonesia from 5.9 to 4.8 percent; Malaysia from 3.9 to 3.0 percent; South Korea from 2.9 to 2.7 percent; Japan from 2.6 to 2.5 percent; Vietnam from 2.3 to 2.2 percent.

Six, a coincidence if not an indirect result of China merchandise exports’ high expansion in 2025 is that it contributed to low regional and global inflation. China’s average exports in 2025 (January-October) were $308 billion/month, equivalent to combined exports of the US plus Canada plus Mexico plus Brazil of $309 billion/month. For the Philippines’ total imports, the share of China has been rising from 20 percent of total in 2022, 23 percent in 2023, 26 percent in 2024 and almost 29 percent in 2025.

So the Philippines and neighbors in Asia are moving into a good economic environment of declining inflation and declining unemployment. We are starting 2026 with good vibes.

Seven, in infrastructure development, the Ninoy Aquino International Airport recorded its highest ever number of passengers of 52 million, mostly domestic flights. Airport operator New NAIA Infrastructure Corp. (NNIC) said this was higher than the 50.1 million passengers in 2024.

Eight, the continuing modernization of the Bohol-Panglao International Airport and Laguindingan International Airport (Cagayan de Oro) under the multi-year concession agreements awarded by the Public-Private Partnership (PPP) Center in 2024.

Nine, the continuing expansion of Philippine seaports. For the holiday season alone, Dec. 15, 2025 to Jan. 5, 2026, the Philippine Ports Authority recorded 6.1 million passengers nationwide, higher than 4.7 million passengers for the same period in 2024.

See related stories this month in The STAR: “Government awards 13 PPP projects in 2025” (Jan. 1), “GIP investing P13.7 billion for 40 percent stake in Aboitiz InfraCapital” (Jan. 1), “Batanes ports get P1.4 billion upgrade” (Jan. 1), “NAIA passengers hit 52 million in 2025” (Jan.  2), “PPA records 6.1 million passengers during holidays” (Jan. 6).

Ten, a change in leadership at the PPP Center occurred when executive director Cynthia Hernandez left last November. The lady is a multi-talented engineer-economist-finance wizard (undergrad Engineering and graduate studies Economics from UP Diliman).

Among the many big infrastructure projects that materialized and were awarded during her term from July 2022 to 2025 are: (1) NAIA modernization under NNIC, not implemented in various administrations and finally awarded in September 2024; (2) Laguindingan International Airport Project and Bohol-Panglao International Airport Project modernizations, both awarded in 2024, transitioning from the BOT Law to the PPP Code and (3) Tarlac-Pangasinan-La Union Expressway Extension Project.

The passage of the PPP Code of 2023 was facilitated and hastened by the little dragon lady of PPP infrastructure. Good work and congratulations, Ms. Cynthia Hernandez.