How Did Philippine Inflation Rise to 1.5 Percent in August?
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Synopsis
In August, the Philippines witnessed a notable increase in its inflation rate, now at 1.5%. This rise is primarily due to higher food costs linked to adverse weather. Experts are urging close monitoring of weather patterns to mitigate agricultural impacts. What does this mean for the economy? Dive into the implications of these economic shifts.
Key Takeaways
- Annual inflation in the Philippines rose to 1.5% in August.
- The increase is mainly due to higher food prices.
- Core inflation stands at 2.7%, up from 2.6% last year.
- Weather conditions are crucial in determining agricultural production.
- The trade deficit was -4.05 billion dollars in July 2025.
Manila, Sep 5 (NationPress) The annual headline inflation rate in the Philippines surged to 1.5 per cent in August, up from 0.9 per cent in July, primarily driven by rising food prices attributed to adverse weather conditions, as reported by the Philippine Statistics Authority (PSA) on Friday.
During a news briefing, PSA chief Dennis Mapa highlighted that the index for food and non-alcoholic beverages—an essential part of the consumer basket—increased by 0.9 per cent in August, reversing a 0.2 per cent annual decline seen in July 2025. He pointed out that this change was the main contributor to the inflation rise, according to Xinhua News Agency.
Moreover, Mapa noted that the slower annual decrease in the transport sector, which registered 0.3 per cent in August compared to 2.0 per cent in the previous month, also played a role in this upward trend.
This latest inflation figure raises the national average inflation rate from January to August 2025 to 1.7 per cent. In August 2024, inflation was higher at 3.3 per cent.
Core inflation, which excludes selected food and energy items, increased to 2.7 per cent in August 2025, compared to 2.6 per cent in August 2024.
In a separate statement, Arsenio Balisacan, the Secretary of the Department of Economy, Planning, and Development, stressed the necessity of monitoring the country’s weather forecast due to its potential effects on agricultural output.
“Although inflation is largely manageable, the recent data demonstrate how negative weather conditions can directly affect prices,” Balisacan remarked.
The Philippines' state weather bureau, PAGASA, anticipates up to 15 tropical cyclones from September 2025 to February 2026.
Last month, the Philippine Statistics Authority revealed that the country’s total external trade in goods rose by 7.7 per cent in July 2025, reaching 18.72 billion US dollars compared to 17.38 billion dollars in July 2024.
According to the agency, 60.8 per cent of this total trade consisted of imported goods, while the remaining 39.2 per cent were exports.
They also indicated that the trade balance, which is the difference between the value of exports and imports, resulted in a deficit of -4.05 billion dollars in July 2025, reflecting an annual decline of 17 per cent.
Point of View
It is imperative to acknowledge the complex interplay between weather conditions and economic indicators like inflation. The recent spike highlights vulnerabilities in the agricultural sector and underscores the need for strategic planning and effective monitoring by authorities to manage these economic challenges.
NationPress
05/09/2025
Frequently Asked Questions
What contributed to the rise in inflation in August 2025?
The rise in inflation to 1.5% in August 2025 was primarily driven by increased food prices due to unfavorable weather conditions.
What is core inflation and how did it change?
Core inflation, which excludes volatile food and energy prices, rose to 2.7% in August 2025, compared to 2.6% in August 2024.
What forecasts did PAGASA provide for the upcoming months?
PAGASA forecasts expect up to 15 tropical cyclones between September 2025 and February 2026, which could impact agricultural production.
How does the current inflation rate compare to previous years?
The inflation rate of 1.5% in August 2025 is lower than the 3.3% recorded in August 2024.
What is the trade balance in the Philippines for July 2025?
In July 2025, the Philippines experienced a trade deficit of 4.05 billion dollars, reflecting a 17% decrease in trade balance year-on-year.
