MANILA — The country’s headline inflation rate eased to 0.9 percent in July 2025, down from 1.4 percent in June, according to the latest data released by the Philippine Statistics Authority (PSA) .

This brings the national average inflation for the first seven months of the year to 1.7 percent. In comparison, inflation in July 2024 stood at 4.4 percent.

PSA said the slowdown was primarily driven by the lower annual increase in housing, water, electricity, gas and other fuels, which decelerated to 2.1 percent from 3.2 percent in June.

Also contributing to the downtrend were the declines in food and non-alcoholic beverages, which dropped by 0.2 percent in July from a 0.4 percent increase the previous month, and transport, which posted a faster annual drop of 2.0 percent from 1.6 percent.

Other commodity groups that posted slower annual growth were education services (4.3 percent from 5.3 percent) and personal care and miscellaneous goods and services (2.3 percent from 2.4 percent).

Meanwhile, higher annual inflation rates were recorded in several commodity groups, including alcoholic beverages and tobacco (4.2 percent from 3.8 percent), clothing and footwear (1.8 percent from 1.7 percent), health (2.6 percent from 2.4 percent), information and communication (0.5 percent from 0.4 percent), and restaurants and accommodation services (2.3 percent from 2.1 percent).

The top contributors to the July 2025 headline inflation were:

• Housing, water, electricity, gas and other fuels (47.3% share or 0.4 percentage point)
• Restaurants and accommodation services (24.7% share or 0.2 percentage point)
• Alcoholic beverages and tobacco (14.2% share or 0.1 percentage point)

Food inflation turns negative

Food inflation at the national level registered an annual decline of 0.5 percent in July 2025, a reversal from the 0.1 percent increase in June. A year earlier, food inflation stood at 6.7 percent.

The drop was mainly due to steeper declines in rice (15.9 percent from 14.3 percent) and corn (15.9 percent from 14.5 percent), as well as a sharper decrease in vegetables and pulses (4.7 percent from 2.8 percent). Fruits and nuts also posted a slower increase at 8.0 percent from 9.7 percent.

Other food items with lower inflation included:

• Meat and other slaughtered land animals (8.8 percent from 9.1 percent)
• Milk, other dairy products and eggs (5.0 percent from 5.1 percent)
• Ready-made food and other uncategorized products (2.0 percent from 2.2 percent)

In contrast, higher annual increases were observed in:

• Flour, bread and bakery products, pasta and cereals (1.5 percent from 1.3 percent)
• Fish and seafood (6.3 percent from 6.2 percent)
• Oils and fats (7.8 percent from 7.1 percent)

The main contributors to food inflation were:

• Cereals and cereal products (–3.5 percentage points)
• Vegetables and pulses (–0.4 percentage point)
• Sugar, confectionery and desserts (–0.01 percentage point)

Core inflation ticks up

Core inflation, which excludes selected volatile food and energy items, slightly rose to 2.3 percent in July 2025 from 2.2 percent in June. It was recorded at 2.9 percent in July 2024.

Regional inflation trends

In the National Capital Region (NCR), inflation slowed to 1.7 percent in July 2025 from 2.6 percent in June. This was attributed to slower increases in housing (3.7 percent from 6.0 percent) and food and non-alcoholic beverages (1.8 percent from 2.3 percent), as well as a faster drop in transport costs (2.3 percent from 1.6 percent).

Other categories that posted slower annual growth in NCR included:

• Furnishings and household maintenance (0.4 percent from 0.5 percent)
• Health (1.5 percent from 1.7 percent)
• Recreation and culture (0.6 percent from 0.7 percent)
• Education services (2.6 percent from 2.8 percent)
• Restaurants and accommodation services (0.9 percent from 1.3 percent)

In Areas Outside NCR (AONCR), inflation likewise declined to 0.7 percent in July 2025 from 1.1 percent in June. A year earlier, the inflation rate in AONCR was significantly higher at 4.6 percent.

The deceleration was mainly due to a 0.6 percent annual decline in food and non-alcoholic beverages and a slower increase in housing-related costs (1.5 percent from 2.3 percent). Transport also posted a sharper decline at 1.9 percent from 1.6 percent.

Lower growth was also noted in:

• Education services (5.0 percent from 6.1 percent)
• Personal care and miscellaneous goods (2.4 percent from 2.6 percent)

However, certain commodity groups in AONCR recorded faster inflation, including:

• Alcoholic beverages and tobacco (4.4 percent from 4.1 percent)
• Clothing and footwear (1.9 percent from 1.8 percent)
• Health (2.8 percent from 2.6 percent)
• Information and communication (0.6 percent from 0.5 percent)
• Restaurants and accommodation services (2.8 percent from 2.4 percent)

Twelve regions outside NCR recorded either lower inflation rates or outright deflation in July 2025, with the highest inflation observed in Region I (Ilocos Region) at 1.9 percent.