Central Luzon’s Inflation Increases to 3.4 Percent

The annual inflation rate in Central Luzon increased to 3.4 percent in January 2025. In comparison, inflation was higher in January 2024, recorded at 3.7 percent. (Figure 1)
 

1.    Headline Inflation

1.1    Main Drivers to the Upward Trend of the January 2025 Inflation

The upward trend in the overall inflation in Central Luzon in January 2025 was primarily due to the faster increase in the index for food and non-alcoholic beverages, which rose to 4.6 percent from 3.6 percent in the previous month. Alcoholic beverages and tobacco also contributed to the upward trend in inflation, increasing from 3.3 percent in December 2024 to 4.3 percent in January 2025. Additionally, transport contributed to the uptrend, recording a faster annual increase of 0.5 percent in January 2025, from 0.3 percent in December 2024.

Furthermore, higher annual increment was observed in the indices of the following commodity groups:

• Recreation, sport and culture, 2.9 percent from 2.8 percent;

• Furnishings, household equipment and routine household maintenance, 2.7 percent from 2.5 percent; and

• Health, 2.7 percent from 2.6 percent.

Financial services also contributed to the uptrend as it recorded 0.0 percent in January 2025 from the annual decline of 0.3 percent in December 2024.

In contrast, lower inflation in January 2025 were noted in the following commodity groups:

• Restaurants and accommodation services, 5.2 percent from 6.6 percent;

• Personal care, and miscellaneous good and services, 3.4 percent from 3.6 percent;

• Housing, water, electricity, gas and other fuels, 2.8 percent from 3.2 percent;

• Clothing and footwear, 1.9 percent from 2.1 percent; and

• Information and communication, 0.3 percent from 0.4 percent.

Meanwhile, the inflation rate for education services remained at its previous month's annual rate of 2.2 percent. (Table 1)

1.2 Main Contributors to the January 2025 Inflation

The top three commodity groups contributing to the Central Luzon’s overall inflation rate in January 2025 were as follows:

• Food and non-alcoholic beverages, 4.6 percent inflation with 49.1 percent share or 
  1.67 percentages point;

• Housing, water, electricity, gas and other fuels, 2.8 percent inflation with 16.2 percent share or 0.55 percentage point; and 

• Restaurants and accommodation services, 5.2 percent inflation with 16.2 percent share or 0.55 percentage point.

   

  

  2.    Food Inflation

  2.1    Main Drivers and Contributors to the Food Inflation

Food inflation in Central Luzon rose at a faster pace, increasing from 3.8 percent in December 2024 to 4.8 percent in January 2025. In comparison, food inflation was notably lower at 3.9 percent in January 2024.

The overall rise in food inflation for January 2025 was primarily driven by a sharp increase in the index for vegetables, tubers, plantains, cooking bananas, and pulses, which surged from 27.6 percent in December 2024 to 35.5 percent in January 2025. Additionally, inflation for meat and other parts of slaughtered land animals rose significantly, reaching 7.0 percent in January 2025. Fish and other seafood also contributed to the upward trend, recording an inflation rate of 5.2 percent in January 2025.

Moreover, the following food groups recorded higher inflation rates in January 2025:

• Fruits and nuts, 6.4 percent from 5.0 percent;
   
• Ready-made food and other food products n.e.c, 4.2 percent from 4.1 percent; and
   
• Oils and fats, 3.0 percent from 1.9 percent.

Conversely, lower inflation were observed in the following food groups:

• Corn, 20.2 percent from 23.1 percent; and
• Milk, other dairy products, and eggs, 1.5 percent from 2.0 percent;

Rice, on the other hand further decline at 6.7 percent from 3.9 percent annual decrease in the previous month. (Table 2)
 

3.    Inflation by Province in Central Luzon

3.1    Main Drivers and Contributors to the Food Inflation

In January 2025, inflation rates increased in six provinces of Central Luzon, along with the City of Angeles, compared to their inflation rates in December 2024. On the other hand, Bulacan and the City of Olongapo recorded a slower increase in inflation rates during the same period.  
  
Among all provinces and highly urbanized cities (HUCs) in Central Luzon, Pampanga recorded the highest inflation at 5.5 percent, followed closely by the City of Angeles at 5.4 percent and Aurora at 4.6 percent. Conversely, Zambales registered the lowest inflation rate at 1.4 percent (Figure 2).

ARLENE M. DIVINO
Regional Director
PSA RSSO 03