The Philippines inflation rate for August 2025 was released last week, and we see that it was still low at 1.5% although a bit higher than July’s 0.9%. So the average inflation rate of the country for January to August is still at 1.7%, and this is lower than the average inflation rate of many other Asian countries.
Finance Secretary Ralph G. Recto issued an upbeat statement on this, saying that “Kahit napanatili natin ang mababang inflation, mas paiigtingin pa ng gobyerno ang mga hakbang para suportahan ang produksyon… Patuloy naming prayoridad na protektahan ang halaga ng bawat pisong kinikita ng bawat pamilyang Pilipino (Even though we have maintained low inflation, the government will further intensify measures to support production… Our priority continues to be to protect the value of every peso earned by every Filipino family).”
Low and stable prices, high employment and job opportunities, these are the most basic concerns of Filipinos and almost all other people around the world.
Meanwhile, Japan is now the “inflation capital” of major Asian economies, and this is ironic because it is an industrialized country and industrial economies are supposed to have low inflation because they can mass produce, mass store, and mass transport many things so that logistical and supply bottlenecks are avoided when delivering the goods and services to consumers.
Meanwhile, China has entered deflation.
Major economies in America and Europe also suffer from high inflation above 2.5%. A few though have experienced declining inflation from 2023-2025, like Spain, Portugal, Germany and France (see Table 1).
And when it comes to GDP growth, only three European countries have had growth above 2.5% in 2024 and in the first and second quarters (Q1 and Q2) of 2025: Turkey with 3.2% and 3.6% respectively, Poland with 2.9% and 3.3%, and Spain with 3.2% and 2.8%. Big European nations with crawling growth are: the UK with 1.1% and 1.3%, France with 1.1% and 0.7%, Italy with 0.7% and 0.6%, and Germany with -0.2% and 0.4% (Germany is suffering degrowth).
WHO ARE WE IMPORTING FROM?Two weeks ago, the Philippine Statistics Authority (PSA) released the country’s merchandise trade data for July. In Table 2, I have compared the January-July total merchandise imports for 2022-2025.
China’s share keeps rising, from 19.8% of the Philippines’ total imports in 2022 to 28.5% in 2025. Including Hong Kong, this comes up to 30%, which is huge. Meanwhile, the share of Japan and the US in the Philippines’ total imports is declining. This means that, for example, more Philippine bus companies are buying more Yutong, King Long, and Higer buses than they are Hino or Isuzu buses, and they are buying no US buses.
Only four European countries make it to the top 20 sources of Philippine imports — Germany, France, Italy, and Spain. The UK is out (see Table 2).
While the Philippines’ defense and war-mongering camps regularly issue anti-China statements, Philippines businesses embrace more China products. China’s trend of domestic deflation (see Table 1 again) is also reflected in its export prices, so many countries’ imports from China (including those of the Philippines) will continue to rise.
Among the big European economies, Spain is the only country with high growth and declining inflation. I read that their tourism sector is doing very well, which contributes to their high growth. The Philippines can learn a thing or two about Spain’s tourism that may be applicable here.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.
