Starting April 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 April 2022. The CPI series for all income households for April 2022 onwards will be 2018-based.

A.    The Philippines

The country’s inflation rate for the bottom 30% income households remains constant at 5.3 percent in May 2024. In May 2023, inflation rate was posted at 6.7 percent. (Table A)

By Region

Among the 17 regions, seven recorded faster inflation rates for the bottom 30% income households during the month and eight regions recorded lower inflation rates relative to its April 2024 inflation rate. Region I (Ilocos Region) recorded the lowest inflation rates at 3.9 percent while Region IX (Zamboanga Peninsula) recorded the highest inflation at 6.3 percent during the month. (Figure 1)

B. Central Visayas

1. Regional Inflation

Inflation for the bottom 30% income households in Central Visayas increase to 5.7 percent in May 2024 from 3.9 percent in April 2024. In May 2023, inflation rate was recorded at 7.1 percent. (Table A, B, and Figure 1)

1.1 Main Drivers to the Upward Trend of the Regional Inflation

The main driver to the upward trend of the overall inflation for this income group in May 2024 was the higher year-on-year growth of the heavily weighted food and non-alcoholic beverages at 6.4 percent from 3.8 percent in the previous month. In addition, a faster year-on-year increase was observed in the transport index at 1.6 percent in May 2024 from -4.3 percent in the last month and faster year-on-year growth of housing, water, electricity, gas and other fuels at 6.5 percent from 6.3 percent. (Table 3)

The inflation rate of recreation, sport and culture also increased to 5.9 percent from 5.7 percent in the previous month.  

In contrast, lower annual growth rates were noted in the indices of the following food groups during the month: 
a. Alcoholic Beverages and Tobacco, 5.6 percent from 7.5 percent; 
b. Furnishings, Household Equipment and Routine Household Maintenance, 1.9 percent from 2.2 percent;
c. Health, 3.4 percent from 3.5 percent;
d. Restaurants and Accommodation Services, 4.8 percent from 4.9 percent; and
e. Personal Care, And Miscellaneous Goods and Services, 4.6 percent from 4.7 percent.

Meanwhile, the following commodity groups retained their previous month's rate:
a. Clothing and Footwear at 2.0 percent;
b. Information and Communication at 0.0 percent;
c. Education Services at 1.5 percent; and
d. Financial Services at -0.2 percent.

1.2 Main Contributors to the Regional Inflation

The following commodity groups were the top three contributors to the May 2024 overall inflation for the bottom 30% income households:
a. Food and Non-Alcoholic Beverages with 58.3 percent share or 3.3 percentage points;
b. Housing, Water, Electricity, Gas and Other Fuels with 20.3 percent share or 1.7 percentage points; and
c. Restaurants and Accommodation Services with 7.4 percent share or 0.4 percentage point.

2. Food Inflation

Food inflation for the bottom 30% income households at the regional level moved at a faster pace of 6.7 percent in May 2024 from 3.7 percent in the previous month. In May 2023, its annual increase was observed at 5.8 percent. (Table 7)

2.1 Main Drivers to the Upward Trend of Food Inflation

The uptrend in the food inflation was mainly due to the faster annual increases in cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, at 11.7 percent in May 2024 from 6.9 percent in the previous month and Vegetables, tubers, plantains, cooking bananas and pulses at 10.6 percent in May 2024 from 1.6 percent in the previous month.

A slower year-on-year decrease was also noted in the index of fish and other seafood at -3.2 percent in May 2024 from -4.5 percent in the previous month.

In addition, faster year-on-year increase was also observed in the index of oils and fats at 0.3 percent in May 2024 from 0.1 percent in the previous month.

On the contrary, lower annual growth rates during the month were observed in the indices of the following food groups: (Table 5)
a. Meat and other parts of slaughtered land animals, 7.1 percent from 7.9 percent; 
b. Milk, other dairy products and eggs, 4.4 percent from 6.4 percent; and
c. Fruits and nuts, 1.5 percent from 4.7 percent.

In addition, a faster annual decline was observed in the index of sugar, confectionery and desserts at 7.9 percent from a 7.4 percent annual decline in April 2024.

2.2 Main Contributors to the Food Inflation

Food inflation contributed 58.3 percent or 3.3 percentage points to the May 2024 overall inflation for this particular income group. Among the food groups, the main contributors to the 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 80.6 percent share or 5.4 percentage points; 
b. Meat and other parts of slaughtered land animals with 11.4 percent share or 0.8 percentage point; and
c. Vegetables, tubers, plantains, cooking bananas and pulses with 10.5 percent share or 0.7 percentage point.

C. By Province

Among the Provinces and Highly Urbanized Cities (HUCs) in Central Visayas, the Province of Cebu recorded the lowest inflation in May 2024 at 3.5 percent while the province of Bohol recorded the highest inflation during the month at 10.7 percent.

Two provinces and one HUCs recorded a faster year-on-year increase this month compared to the previous month’s inflation rates while two provinces and two HUCs recorded a slower annual increment during the month relative to its respective April 2024 annual rate. (Table A, Figure 3)

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:

(SGD.)
ARIEL E. FLORENDO
Regional Director