Starting February 2022, the Philippine Statistics Authority (PSA) released the rebased Consumer Price Index (CPI) for all income households to base year 2018, from base year 2012 as announced in the press release number 2022-01 dated 04 January 2022. The CPI series for all income households for January 2022 onwards will be 2018-based.

A.    The Philippines

The Philippines’ headline inflation or overall inflation eased to 3.3 percent in August 2024 from 4.4 percent in July 2024. This brings the national average inflation from January to August 2024 to 3.6 percent. In August 2023, inflation rate was higher at 5.3 percent.   (Table A)

B. Central Visayas
1.    Regional Inflation

The headline inflation in Central Visayas decelerated to 3.4 percent in August 2024 from 4.5 percent in July 2024. This brings the regional average inflation from January 2024 to August 2024 to 3.6 percent. In August 2023, inflation rate was recorded at 4.1 percent. (Table A)

C. City of Lapu-Lapu

1.    Headline Inflation

Lapu-Lapu City’s headline inflation rate decreased to 5.6 percent in August 2024 from 6.1 percent in July 2024. This brings the city’s average inflation from January to August 2024 to 5.3 percent. In August 2023, the inflation rate in the city was lower at 2.9 percent. (Table A and Figure 1)
1.1    Main Drivers to the Downward Trend of the Headline Inflation

The downtrend of the headline inflation in August 2024 was primarily influenced by the year-on-year slower increase of food and non-alcoholic beverages index at 3.5 percent from 5.9 percent in July 2024. This was followed by the faster annual decrease of transport commodity group at 1.4 percent during the month from 4.1 percent in the previous month. Restaurants and accommodation services with inflation rate at 17.4 percent in August 2024 from 18.1 percent in July 2024 also contributed to the downtrend headline inflation in the city.  (Table 3)

Furthermore, slower annual increments were also recorded in the indices of the following commodity groups:
  a. Clothing and footwear, 2.5 percent from 3.6 percent;
  b. Personal care, and miscellaneous goods and services, 4.6 percent from 5.1 percent;
  c. Health, 2.7 percent from 3.2 percent;
  d. Alcoholic beverages and tobacco, 3.1 percent from 3.6 percent;
  e. Furnishings, household equipment and routine household maintenance, 1.9 percent 
      from 2.0 percent; and
  f. Recreation, sport and culture, 4.2 percent from 4.3 percent.  

On the contrary, faster year-on-year increases were noted in the indices of housing, water, electricity, gas and other fuels at 8.4 percent, and information and communication at 1.4 percent during the month from their respective inflation rates at 4.6 percent, and 1.3 percent in July 2024. 
Commodity groups that retained their previous month’s inflation were education services at 1.1 percent and financial services at 0.0 percent.

1.2    Main Contributors to the Headline Inflation

The top three commodity groups that contributed to the August 2024 headline inflation were the following:
a.    Housing, water, electricity, gas and other fuels with 36.8 percent share or 2.1 percentage points;
b.    Restaurants and accommodation services with 34.2 percent share or 1.9 percentage points; and
c.    Food and non-alcoholic beverages with 21.8 percent share or 1.2 percentage points.

2. Food Inflation

Food inflation in the city decreased to 3.8 percent in August 2024 from 6.2 percent in July 2024. In August 2023, food inflation was higher which recorded at 5.1 percent. (Table 7)

2.1 Main Drivers to the Downward Trend of Food Inflation

The downtrend of food inflation in August 2024 was mainly brought by the faster annual decrease in the food group of fish and other seafood at 11.2 percent from the annual drop of 6.4 percent in the previous month. This was followed by the slower annual increase of meat and other parts of slaughtered land animals food group at 8.5 percent in August 2024 from 11.6 percent in the previous month.  Faster annual decrease was noted in vegetables, tubers, plantains, bananas and pulses at 2.7 percent during the month from 5.1 percent in July 2024. 

Moreover, slower annual increments were also recorded in the indices of the following food groups:

   a. Rice at 10.4 percent from 15.6 percent;
  b. Flour, bread and other bakery products, pasta products, and other 
      cereals, 2.2 percent from 2.3 percent;
  c. Ready-made food and other food products not elsewhere classified at 
      4.5 percent from 7.3 percent; and
  d. Sugar, confectionery and desserts at 3.5 percent from 3.6 percent.  

On the contrary, faster annual increases were posted in the following indices:

  a. Corn, 72.2 percent from 20.2 percent;
  b. Milk, other dairy products and eggs, 1.7 percent from 0.9 percent; and
  c. Fruits and nuts, 16.5 percent from 13.4 percent.

Oils and fats had remained its previous month’s food inflation rate at 0.1 percent annual decline.

2.2 Main Contributors to the Food Inflation

Food inflation shared 21.2 percent or 1.2 percentage points to the overall inflation in August 2024. Food groups with highest contribution to food inflation during the month were the following:

a.  Cereals and cereal products which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, with 80.2 percent share or 3.0 percentage points;
b.    Meat and other parts of slaughtered land animals, 37.3 percent share or 1.4 percentage points; and 
c.    Fruits and nuts, with 17.4 percent share or 0.7 percentage point.

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:

MELCHOR B. BAUTISTA
Chief Statistical Specialist

MLA/KST