- What is Inflation?
- What Causes Inflation in the Philippines?
- How is Inflation Measured in the Philippines?
- How Does Our Inflation Calculator Work?
- How Much is Inflation in the Philippines?
- What is Your Personal Inflation Rate?
- 5 Tips to Manage Inflation in the Philippines
- How to Beat Inflation Through Investing
Inflation affects everyone—whether it’s rising food prices, higher rent, or more expensive fuel. Over time, the value of your peso decreases, meaning you need more money to buy the same goods and services.
But what exactly is inflation? How does it affect your daily life? And, more importantly, how can you prepare for it and protect your finances? Find out everything in this guide!
We’ve also created a Philippines Inflation Calculator to help you see how the value of money has changed over time.
What is Inflation?
Inflation is the steady increase in the prices of goods and services over time. As inflation rises, the purchasing power of your money shrinks.
For example
If a 1 kg pack of rice cost ₱50 last year but now costs ₱60, that’s a 20% price increase due to inflation.
Inflation affects everything—from food and rent to transportation, education, and healthcare.
What Causes Inflation in the Philippines?
Demand-Pull Inflation
When demand is higher than supply, prices go up. During Christmas and New Year, the demand for ham, lechon, and gifts increases, leading to higher prices in December.
Cost-Push Inflation
When businesses face higher costs, they pass them on to consumers. If fuel prices increase, transport fares go up, and so does the cost of groceries, fast food, and delivery services.
Supply Chain Disruptions
Events like typhoons, global conflicts, and import issues cause shortages, leading to higher prices. During the pandemic, the cost of alcohol, face masks, and medicines surged due to high demand and low supply.
Government & Economic Policies
The Bangko Sentral ng Pilipinas (BSP) controls inflation through interest rates and monetary policies. If BSP lowers interest rates, people borrow and spend more, increasing demand and pushing prices up.
Fuel & Energy Prices
The Philippines imports oil, so when global prices rise, gas, electricity, and transportation costs go up too. A crude oil price hike leads to higher gas prices, which raises the cost of jeepney fares, Grab rides, and flights.
How is Inflation Measured in the Philippines?
The Philippine Statistics Authority (PSA) measures inflation using the Consumer Price Index (CPI), which tracks the price of essential goods like:
- Rice, fish, meat, and vegetables
- Housing & utilities (rent, water, electricity, LPG)
- Transportation & fuel
- Healthcare & education
Formula for Inflation Rate
Inflation Rate = ((CPI in Current Year - CPI in Previous Year) ÷ CPI in Previous Year) × 100
For example
If the CPI was 160 last year and is now 176, then:
Inflation Rate = ((176 - 160) ÷ 160) × 100 = 10%
This means inflation for the year is 10%, meaning prices have gone up by 10% on average.
How Does Our Inflation Calculator Work?
Our Philippines Inflation Calculator helps you compare the value of money over time.
How to Use It:
- Enter the amount of money you want to compare.
- Select the starting and ending years (e.g., 2000 to 2023).
- The calculator will show how much that amount is worth today, adjusted for inflation.
For example
If ₱100,000 in 2000 is equal to ₱350,000 in 2023, inflation has reduced the peso’s purchasing power over time.
How Much is Inflation in the Philippines?
| Year | Inflation Rate (%) |
|---|---|
| 2023 | 6.0% |
| 2022 | 5.8% |
| 2021 | 4.4% |
| 2020 | 2.6% |
| 2019 | 2.5% |
| 2018 | 5.2% |
Highest Inflation in Philippine History:
1984-1985 – Over 50% due to the economic crisis.
2022 – Over 6% due to global oil price hikes and food shortages.
What is Your Personal Inflation Rate?
The national inflation rate is an average, but your personal inflation rate depends on your expenses.
Personal Inflation Rate
If your monthly grocery bill was ₱5,000 last year but is now ₱6,000, then:
Personal Inflation Rate = ((6,000 - 5,000) ÷ 5,000) × 100 = 20%
This means your grocery expenses increased by 20%, even if the official inflation rate is lower.
5 Tips to Manage Inflation in the Philippines
- Cut Unnecessary Expenses – Reduce spending on online shopping, fast food, and subscriptions.
- Buy in Bulk & Use Promos – Shop during sales on Lazada, Shopee, or supermarkets like SM Hypermarket.
- Negotiate Bills – Call your internet, phone, or insurance provider for discounts.
- Use Cashback & Rewards – Use GCash, Maya, and credit card perks to save money.
- Try Cheaper Brands – Store brands in Puregold, Landmark, or AllDay are often cheaper than premium brands.
How to Beat Inflation Through Investing
Want to protect your money from inflation? Try investing in:
- Stock Market (PSEi) – Long-term investing can outperform inflation.
- Real Estate – Property values rise over time, making real estate a good hedge.
- Mutual Funds & UITFs – Professional fund managers grow your money.
- Gold & Digital Gold – Gold is a traditional store of value against inflation.
- Time Deposits & Bonds – Fixed-income investments provide stable returns.
