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Keisha Ta-Asan - The Philippine Star
August 2, 2025 | 12:00am
Bangko Sentral ng Pilipinas main office in Manila.
Businessworld / File
MANILA, Philippines — Inflation likely slowed further in July to as low as 0.5 percent, the Bangko Sentral ng Pilipinas (BSP) said, as lower rice prices helped cushion the impact of higher food, fuel and power costs.
The central bank projected July headline inflation to settle within the range of 0.5 to 1.3 percent, significantly lower than the 4.4 percent print recorded in July 2024 and down from 1.4 percent in June this year.
“Upward price pressures for the month are likely to be driven by higher meat and vegetable prices partly due to unfavorable weather conditions, increased electricity rates, elevated domestic fuel costs and the depreciation of the peso,” the BSP said.
“These price pressures, however, could be partially offset by the continued decline in rice prices,” it added.
If the inflation outturn falls at the lower end of the forecast range, it would mark the slowest pace of price increases since November 2015, when inflation dropped to 0.3 percent.
A print below one percent would also place the rate well below the BSP’s two to four percent target band for the fourth consecutive month.
“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” the central bank said.
The BSP has cut policy rates by a total of 125 basis points since August 2024, including two 25-basis-point reductions in April and in June this year, to support economic recovery as inflation trends downward.
BSP Governor Eli Remolona Jr. earlier said the Monetary Board remains prepared to respond as needed should inflation risks become more pronounced, with the policy stance depending on upcoming data, including the July inflation set to be released by the Philippine Statistics Authority on Aug. 5.
For the full year, the BSP expects inflation to average 1.6 percent, remaining within the target range, provided that supply-side pressures remain contained and that second-round effects are minimal.
As of the first half, inflation has averaged 1.8 percent, reflecting the continued easing of price pressures across key commodity groups.
