Here's the science (physics) behind it:
The bags of chips are sealed at lower altitudes with higher air pressure. When these bags of chips are taken to higher altitudes like Baguio City, the air pressure inside the bags remains constant but the air pressure outside the bags decreases. This creates what is called a pressure differential.
Because there's less air pressure outside the bags when they're taken to higher altitudes, the trapped air inside the bags expands. This causes the bags to inflate and puff up.
In short, when you take a bag of chips from the lowlands to Baguio City, the air pressure outside the bag decreases as you go higher. Air pressure decreases with increasing altitude. This change in pressure causes the air inside the bag to push ouwards causing the bag to inflate.