The Philippines' inflation* rate in March 2025 grew slower than economists expected. The Philippine Statistics Authority (PSA) reported a 1.8% increase in consumer goods such as food and beverages that month, which was 30 basis points lower than the February inflation rate of 2.1%. PSA further noted that was mainly due to lower rice prices and slower price increase for food and non-alcoholic beverages. As a result, the Bangko Sentral ng Pilipinas may continue with its plan to cut key interest rates by 25-basis-points*on April 10, 2025.
(Source: Bloomberg)
The impact of inflation policies on consumers
With lower interest rates*, savings may grow a little slower. The upside is that loans become more affordable. This gives consumers easier access to financial support for big goals— like buying a car, owning a home, or funding other important milestones.
Definition of terms
Interest Rate
Interest rate is the percentage of a loan or deposit balance that a lender charges or pays to a borrower, usually communicated on a yearly basis. It represents the cost of borrowing money or the reward for saving money. When one goes up, the other goes down.
Basis Point
Basis point is a unit of measure used in finance to describe percentage changes, often in interest rates or other finance-related terms. One basis point is equal to 0.01%. For example, if an interest rate decreases from 5.5% to 5.25%, it decreases by 25 basis points.
Inflation Rate
Inflation rate is the percentage change of the price of goods and services over a specific period. It measures how quickly prices increase in an economy, usually compared against the same month of the previous year.
