Escalating costs of tomatoes significantly contributed to the 2.9% inflation rate recorded in January 2025.
The Philippines recorded a steady inflation rate of 2.9% in January 2025, marking a significant achievement amidst three months of acceleration, six consecutive tropical cyclones, and cases of African swine fever.
Food prices, typically a significant contributor to inflation, were moderated during this period. Despite the disruptions caused by the tropical cyclones and African swine fever, food inflation eased, with rice prices dropping sharply by 10.9% in April 2025 and meat prices only experiencing moderate increases. This suggests that domestic measures or import adjustments may have helped stabilize food supply, or that the overall food price increases were not severe enough to drastically push inflation.
Energy price fluctuations also played a key role. Oil prices surged due to geopolitical tensions but also experienced periods of moderation. This dynamic likely contributed to inflationary pressures being unpredictable but somewhat contained overall.
Core inflation, which excludes volatile food and energy items, remained relatively stable, indicating that non-food and non-energy sectors did not experience strong inflationary pressures.
Government policies and external conditions may have helped cushion inflation effects. While tropical cyclones and disease outbreaks generally increase prices due to supply shocks, government intervention, subsidies, strategic imports, or improved logistics could have limited the pass-through to consumer prices.
Despite this steady inflation rate, the Bangko Sentral ng Pilipinas (BSP) expects inflation to slightly accelerate due to possible price hikes in transportation and electricity. The BSP plans to discuss emerging risks to the inflation outlook during its next monetary policy meeting on February 13.
The National Economic and Development Authority (NEDA) is taking proactive measures to mitigate the impact of these challenges. They are ramping up vaccinations against African swine fever and constructing flood control infrastructure to combat the effects of La Niña.
The BSP's aggressive rate cuts may exert pressure on the peso, making it more vulnerable to external forces such as the monetary policy of the Federal Reserve and policies enacted by President Donald Trump.
In the agricultural sector, the rise in tomato prices is attributed to the effects of six consecutive tropical cyclones that hit the Philippines between October and November 2024. Tomatoes saw the highest inflation in January 2025, surging to 155.7% from an already high 120.8% in December 2024.
In conclusion, the steady 2.9% inflation rate in January 2025, despite adverse weather and disease shocks, reflects a complex balance of factors. This combination helped offset the inflationary pressures from the three months of acceleration, six tropical cyclones, and African swine fever cases, demonstrating the resilience of the Philippine economy.
[1] [Bangko Sentral ng Pilipinas. (2025). Inflation rate remains steady at 2.9% in January 2025. Retrieved from https://www.bsp.gov.ph/2025/02/05/inflation-rate-remains-steady-at-2-9-in-january-2025/]
[2] [National Economic and Development Authority. (2025). NEDA ramps up measures to combat African swine fever and La Niña. Retrieved from https://neda.gov.ph/neda-ramps-up-measures-to-combat-african-swine-fever-and-la-ni%C3%B1a/]
[3] [Bank of the Philippine Islands. (2025). Tomato prices surge due to tropical cyclones. Retrieved from https://www.bpi.com.ph/news/tomato-prices-surge-due-to-tropical-cyclones/]
The steady inflation rate recorded by the Philippines, at 2.9% in January 2025, is attributed to factors such as the stabilization of food supply and moderation of food prices, despite the disruptions caused by tropical cyclones and African swine fever. The Bangko Sentral ng Pilipinas (BSP), however, expects inflation to slightly accelerate due to possible price hikes in transportation and electricity.
