May 2020 Consumer Price Index (CPI), Inflation Rate (IR), Purchasing Power of Peso (PPP) of Central Visayas

Reference Number: 

2020-SR07-015

Release Date: 

2 July 2020

Starting March 2018, the Philippine Statistics Authority (PSA) released the rebased CPI series as announced in the press release number 2018-031 dated 22 February 2018. The CPI series for July 2018 onwards shall be 2012-based.

Year on Year Inflation rate in Central Visayas was recorded at 2.2 percent

  • Inflation in Central Visayas for May 2020 continued to move at a slower rate of 2.2 percent which was slower than the 2.4 percent annual increase in April 2020. In May 2019, inflation was lower at 1.5 percent (Table A).

  • Slowdown of the inflation in May 2020 was mainly driven by the 4.5 percent annual drop in the transport index. The downtrend in the headline inflation was also brought about by the deceleration in the annual increments recorded in the indices of the following commodity groups during the month:
    • Housing, Water, Electricity, Gas, and Other Fuels, -1.0%;
    • Furnishing, Household Equipment and Routine Maintenanceof the House; 7.0%;
    • Health, 5.4%;
    • Communication, 0.2%;
  • On the contrary, higher annual increase was noted in the indices of following commodity groups:
    • Food and Non-Alcoholic Beverages, 4.4%;
    • Alcoholic Beverages and Tobacco, 13.7%;
    • Restaurant and Miscellaneous Goods and Services, 1.1%
  • Indices of the rest of the commodity groups retained their previous month’s annual growth rates:
    • Clothing and Footwear, 0.6%;
    • Recreation and Culture, 0.3%;
    • Education, 3.2%;

May 2020 CPI in Central Visayas was recorded 126.1

  • May 2020 CPI in Central Visayas was recorded at 126.1. An increasing movement of the CPI was observed from May 2019 to January 2020 except for the slight drop in October 2019. Meanwhile starting January 2020, the CPI moves back and forth from 126.1 to 125.9.

  • Higher annual rate was noted in the indices of each commodity group from April and May 2020 compared to April and May 2019 except for Housing, Water, Electricity, Gas, and Other Fuels and Transport which posted a decrease in the indices in April and May 2020. (Table D).

Purchasing Power of Peso (PPP) was recorded at 0.79 in May 2020

  • Purchasing Power of Peso in Central Visayas was recorded at 0.79 in May 2020. The PPP in May 2019 to May 2020 exhibited a downtrend movement from 0.81 to 0.79. In April 2019, PPP was at 0.81 and remained constant until October 2019.  A decline was recorded from 0.81 to 0.80 in the months of November and December 2019. Starting January 2020, the PPP further decelerated to 0.79 and remained constant until May 2020.

TECHNICAL NOTES

The Philippine Statistics Authority generates and announces the monthly Consumer Price Index (CPI) based on a nationwide survey of prices for a given basket of goods and services. Two important indicators, the inflation rate and purchasing power of the peso (PPP), are derived from the CPI which are important in monitoring price stability and the value of the country’s currency. 

The CPI is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.

Retail Price is the price at which a commodity is sold for spot in small quantities for consumption.

Base Period/Base Year is the period, usually a year, at which the index number is set to 100. It is the reference point of the index number series.

Market Basket is a term used to refer to a sample of goods and services that are commonly purchased and bought by an average Filipino household.

Weight is a value attached to a commodity or ground of commodities to indicate the relative importance of that commodity or group of commodities in the market basket.

Inflation Rate is equivalent to a decline in the purchasing power of the peso. It is the change in the CPI over a specific period of time (usually a month or a year). That is, 

where:

CPI1 - is the CPI in the previous period

CPI2 - is the CPI in the current period

The Purchasing Power of the Peso (PPP) is a measure of the real value of the peso in a given period relative to a chosen reference period. It is computed by getting the reciprocal of the CPI and multiplying the result by 100. That is,

Headline Inflation is the rate of change in the weighted average prices of all goods and services in the CPI basket.

 

Approved by:

 

(SDG.) ARIEL E. FLORENDO
Regional Director

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