March’s nearly five-year low inflation was particularly a boon to the country’s poorest households, whose price increase rate was even slower at 1.1 percent, prompting the government to push for measures that would sustain the easing of the vulnerable sector’s burden.

“The lower food inflation especially benefited low-income households,” the Department of Finance (DOF) said in an April 4 statement, noting that the country’s top priority is to “help alleviate the burden on vulnerable sectors, especially low-income families.”

Inflation for bottom 30-percent income households slowed to 1.1 percent in March, down from 1.5 percent in February. This was the lowest in over five years, aligning with the trend in inflation of all-income households, according to the Philippine Statistics Authority (PSA).

Citing slower annual growth in food and non-alcoholic beverages, the PSA said this low figure starkly contrasts with the 4.6-percent inflation seen in the previous year.

Annual consumer price increases slowed further to 1.8 percent in March 2025, down from 2.1 percent in February, as food price hikes eased mainly due to lower rice prices. This figure was within the expectation of the central bank, at 1.7 percent to 2.5 percent for the month.

In the first three months of the year, average inflation stood close to the low end of the government’s target range of two to four percent, at 2.2 percent, lower than last year’s 3.3 percent.

March inflation was notably the slowest in nearly five years, or since May 2020—at the height of the most stringent lockdowns at the onset of the Covid-19 pandemic—when the headline rate clocked in at 1.6 percent.

“This is very good news, especially for our consumers and businesses. This brings relief to every Filipino,” DOF Secretary Ralph G. Recto said.

According to the Bangko Sentral ng Pilipinas (BSP), the continued slowdown in inflation was due to “lower global rice prices and the impact of government measures to stabilize supply.”

But Recto said the government’s “strict monitoring and proactive interventions will continue—even be intensified—to safeguard this momentum, especially amid global uncertainties.”

Inflation, policy risks

“Uncertainty over global economic policies and their impact on the domestic economy has increased significantly,” the BSP also noted.

Among the most recent developing uncertainties is international trade, particularly between the United States (US) and its trading partners.

On April 2 (US time), US President Donald Trump slapped reciprocal tariffs on countries exporting goods to the US, including the Philippines, at 17 percent. The Philippines charges an average of 34-percent tariffs on American exports, hence the reciprocal tariffs equivalent to their half.

“That’s why we continue to find ways to ensure that government measures lead to a real decrease in the prices of goods, especially food,” Recto said, adding that the government is taking multiple steps to ensure energy stability, besides food.

Meanwhile, the BSP said the Monetary Board (MB), its highest policy-making body, will take into account the latest inflation figure, “along with latest domestic and global developments, at its monetary policy meeting on 10 April 2025.”

“The risks to the inflation outlook continue to be broadly balanced for 2025 and 2026,” the BSP said.

“Looking ahead, the BSP will maintain a measured approach to monetary policy easing to ensure price stability conducive to sustainable economic growth and employment. On balance, uncertainty in the outlook for inflation and growth continues to be a key factor in the setting of monetary policy,” the central bank further said.

Interest rate cuts, particularly their timing and magnitude, will be determined based on the existing data, it added.