Headline Inflation

The region’s headline inflation or overall inflation slowed down further to 2.1 percent in March 2025 from 2.7 percent in the previous month. This brings the regional average inflation rate from January to March 2025 to 2.7 percent. The inflation rate in March 2024 was higher at 3.7 percent.

Main Drivers to the Downward Trend of the Headline Inflation

The downtrend in the overall inflation in March 2025 was primarily brought about by the slower annual increment in the index of food and non-alcoholic beverages at 1.5 percent in March 2025 from 2.7 percent in the previous month. Also contributed to the downtrend was the year-on-year decrease in the transport index at 0.7 percent during the month from a     0.0 percent annual increase in February 2025. In addition, a slower inflation rate was recorded for housing, water, electricity, gas and other fuels at 3.0 percent in March 2025 from 3.1 percent in the previous month.

Moreover, slower annual increases were noted in the indices of the following commodity groups in March 2025:

a. Alcoholic beverages and tobacco, 2.9 percent from 3.3 percent;
b. Clothing and Footwear, 3.9 percent from 4.0 percent; 
c. Furnishings, household equipment and routine household maintenance, 4.1 percent from 4.3 percent; 
d. Information and communication, 1.7 percent from 1.8 percent; and
e. Recreation, sport and culture, 4.6 percent from 4.8 percent; and
f. Personal care, and miscellaneous goods and services, 3.2 percent from 3.4 percent.

On the contrary, compared with their previous month’s inflation rates, higher rates were observed during the month in the indices of health at 3.5 percent from 3.1 percent; and restaurants and accommodation services at 3.6 percent from 2.2 percent.

The indices of the rest of the commodity groups retained their respective previous month’s annual rates.

Main Contributors to the Headline Inflation

The top three commodity groups contributing to the March 2025 overall inflation were the following:

a. Food and non-alcoholic beverages with 32.9 percent share or 0.7 percentage point;
b. Housing, water, electricity, gas and other fuels with 24.0 percent share or 0.5 percentage point; and
c. Restaurants and accommodation services with 11.4 percent share or 0.2 percentage point.

Food Inflation

Food inflation at the regional level further eased to 1.2 percent in March 2025 from 2.6 percent in the previous month. In March 2024, food inflation was higher at 7.7 percent.

Main Drivers to the Downward Trend of Food Inflation

The deceleration of food inflation in March 2025 was primarily brought about by the faster year-on-year decline of rice at 12.8 percent during the month from a 7.6 percent annual decrease in February 2025. This was followed by the slower inflation rate of meat and other parts of slaughtered land animals at 11.7 percent during the month from 13.9 percent in February 2025, and milk, other dairy products and eggs at 1.0 percent in March 2025 from 1.7 percent in the previous month.

Moreover, slower year-on-year increases were observed in the indices of flour, bread and other bakery products, pasta products, and other cereals at 3.6 percent in March 2025 from 3.7 percent in the previous month, and ready-made food and other food products not elsewhere classified at 3.7 percent during the month from 4.3 percent in February 2025.
On the other hand, higher annual growth rates during the month were observed in the indices of the following food groups: 
a. Corn, 7.9 percent from 6.6 percent;
b. Fish and other seafood, 5.1 percent from 2.7 percent;
c. Oils and fats, 1.9 percent from 1.0 percent;
d. Fruits and nuts, 6.8 percent from 5.9 percent; and 
e. Vegetables, tubers, plantains, cooking bananas and pulses, 15.4 percent from 13.9 percent.

In addition, slower annual decrement was noted during the month in the index of sugar, confectionery and desserts at 1.2 percent from 2.4 percent annual drop in February 2025.

Main Contributors to the Food Inflation

Food inflation shared 25.1 percent or 0.5 percentage point to the overall inflation in March 2025. The top three food groups in terms of contribution to food inflation during the month were the following:

a. Meat and other parts of slaughtered land animals with a share of 153.9 percent or 1.9 percentage points;  
b. Vegetables, tubers, plantains, cooking bananas and pulses with a share of 91.2 percent or 1.1 percentage points; and
c. Fish and other seafood with a share of 67.0 percent or 0.8 percentage point.
 

DEFINITIONS AND CONCEPTS

Consumer Price Index - a statistical measure of the change in average retail prices of a fixed basket of goods and services bought by a specific group of consumers in a given area in a given period of time.

Purchasing Power of the Currency or Peso (PPP) - a measure of the volume of goods and services which the currency can buy at any given period relative to that which it could purchase during the base year.  It is computed as the reciprocal of the CPI for the period under review multiplied by 100.

Market Basket - the total number of goods and services in constant amounts and qualities which are samples of the goods and services available in the market and included in the construction of the index.  CPI market basket was selected to represent the composite price behavior of all goods and services purchased by consumers. Composition of the 2012 market basket was determined based on the results of the 2018 update of the 2012 basket. Provinces and selected cities had own market baskets.  

Base Year - it identifies the base period with which the index relates. It is a period of time chosen as reference on which a price index is computed. The index for the base year is 100.

Retail Price - the actual price at which retailers sell a commodity on spot or earliest delivery, usually in small quantities for consumption and not for resale. It is confined to transactions on cash basis in the free market and excludes black-market prices and prices of commodities that are on sale as in summer sales, anniversary sales, Christmas sales, etc.

Percent Change - the percent point change expressed as percent of the index of the earliest date.

Inflation Rate - the annual rate of change or the year-on-year change of the CPI.  Inflation is interpreted in terms of declining purchasing power of money.

Note to Users:

    The monthly Consumer Price Index is computed based on the average retail prices of goods and services collected during the first week and mid-month of the reference month.