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

Reference Number: 

2020-SR07-023

Release Date: 

6 November 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 1.1 percent

  • The inflation in Central Visayas slowed down at 1.1 percent in September 2020 compared to the 1.3 percent annual increase in August 2020. In September 2019, inflation was at 0.2 percent (Table A).

  • The downtrend in the overall inflation was mainly driven by the decrease in the inflation of the Food and Non-Alcoholic Beverages index at 0.8 percent during the month from 1.7 percent in August 2020. The downtrend in the inflation was also brought about by the decrease in the indices of the following commodity groups during the month:
    • Alcoholic Beverages and Tobacco, 13.3%;
    • Furnishing, Household Equipment and Routine Maintenance of the House; 6.1%;
    • Health, 4.6%;
  • Meanwhile, higher annual increase was noted in the indices of following commodity groups:
    • Clothing and Footwear, 0.4%;
    • Housing, Water, Electricity, Gas, and Other Fuels, -0.6%;
    • Transport, 0.9%
    • Education, 0.2%
    • Restaurant and Miscellaneous Goods and Services, 1.6%
  • Indices of the rest of the commodity groups retained their previous month’s annual growth rates:
    • Communication, 0.2%;
    • Recreation and Culture, -2.0%;

September 2020 CPI in Central Visayas was recorded at 125.4

  • The CPI in Central Visayas was recorded at 125.4 in September 2020 which was lower compared to the CPI in August 2020 which was at 125.6. An up and down movement of the CPI was observed from September 2019 to September 2020 in which the month of October 2019 recorded the lowest CPI while June 2020 recorded the highest CPI from the series.

  • Higher annual rate was noted in the indices of each commodity group from August and September 2020 compared to August and September 2019 except for Housing, Water, Electricity, Gas, and Other Fuels and Recreation and Culture which posted a decrease in the indices in August and September 2020. Education also posted a constant index for August 2019 and 2020 (Table D).

Purchasing Power of Peso (PPP) was recorded at 0.80 in September 2020

  • Purchasing Power of Peso in Central Visayas was recorded at 0.80 in September 2020 which remained constant compared to August 2020. The PPP of the first two months starting September 2019 was constant at 0.81 and it slowly decreased at a constant rate of 0.80 in the last two months of 2019. Starting January 2020, the PPP further declined to 0.79 until July 2020. A slower increase in the PPP was recorded starting August 2020 which was at 0.80 up to the month of September.

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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