Citing a slowdown in food inflation alongside a stronger peso, the Bangko Sentral ng Pilipinas (BSP) has forecast that the April headline inflation may fall below the government’s two- to four-percent target band—potentially the slowest rate in over half a decade.

Specifically, the central bank has projected April 2025 inflation to remain subdued, settling within the range of 1.3 to 2.1 percent. If realized, the lower end of the BSP’s forecast would mark the slowest inflation in over five years, or since November 2019, when consumer price hikes accelerated at 1.2 percent.

“Easing prices of rice, fish, fruits, and vegetables, favorable domestic supply conditions along with lower oil prices and the peso appreciation contributed to the downward price pressures for the month,” the BSP said in a statement released on Wednesday, April 30.

However, the BSP also anticipates this potential below-target inflation being partly offset by higher electricity rates and LRT-1 fare increases.

For Meralco consumers, a rate hike of ₱0.72 per kilowatt-hour (kWh) took effect in April, raising the overall rate to around ₱13 per kWh.

As for commuters, LRT-1 operator Light Rail Manila Corp. hiked single journey fares this month, with the minimum fare increasing from ₱15 to ₱20 and end-to-end trips now costing ₱55 instead of ₱45.

Last month, the inflation rate fell within the central bank’s expectation of 1.7 percent to 2.5 percent. March’s annual consumer price increases slowed to 1.8 percent, down from 2.1 percent in February, as food inflation eased mainly due to lower rice prices.

March inflation was the slowest in almost five years, matching the pace seen in May 2020—during the height of strict pandemic lockdowns—when the headline rate stood at 1.6 percent.

Average inflation for the first three months of the year eased to 2.2 percent, down from 3.3 percent in the same period last year and near the lower end of the government’s target.

“Going forward, the Monetary Board (MB) will continue to take a measured approach in adjusting the monetary policy stance in line with its price stability objectives conducive to balanced and sustainable growth of the economy and employment,” the BSP said.

To recall, the MB slashed the key policy rate by 25 basis points (bps) to 5.5 percent on April 10, resuming its easing cycle after a surprise pause in February amid global economic uncertainties.

One of the risks materialized on April 2 when US President Donald Trump imposed across-the-board tariffs, including a 17-percent reciprocal tariff on Philippine imports, adding to external pressures like a possible global slowdown that could prompt further rate cuts in 2025.