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 increased to 3.9 percent in May 2024 from 3.8 percent in April 2024. This brings the national average inflation from January to May 2024 at 3.5 percent. In May 2023, inflation rate was higher at 6.1 percent. (Table A)

B. Central Visayas

1.    Regional Inflation

Following the trend at the national level, headline inflation rate in Central Visayas also increased to 4.0 percent in May 2024 from 3.2 percent in April 2024. The region’s average inflation from January to May 2024 stood at 3.1 percent. In May 2023, the inflation rate in the region was recorded at 5.4 percent. (Table A)

C. City of Cebu

1.    Headline Inflation

Inflation rate in the City of Cebu increased to 5.7 percent in May 2024 from 4.6 percent in April 2024. The city’s average inflation rate from January to May 2024 stood at 4.8 percent. While in May 2023, the inflation rate in the city stood at 4.1 percent. (Table A and Figure 1)

1.1    Main Drivers to the Upward Trend of the Headline Inflation

The uptrend of the headline inflation in May 2024 was primarily influenced by the year-on-year faster increases in the heavily weighted food and non-alcoholic beverages at 9.4, housing, water, electricity, gas and other fuels at 5.1 percent, and transport at 5.3 percent from their respective inflation rate at 6.2 percent, 4.4 percent and 4.3 percent in April 2024. (Table 3)

In addition, faster annual increases were also noted in clothing and footwear at 2.7 percent from 2.4 percent and recreation, sport and culture at 10.2 percent from 10.1 percent in April 2024. (Table 3)
On the contrary, the following commodity groups recorded a slower year-on-year increase during the month: 
a.    Alcoholic beverages and tobacco, 5.0 percent from 9.1 percent;
b.    Furnishings, household equipment and routine household maintenance, 1.6 percent from 1.7 percent; and
c.    Health, 4.6 percent from 4.9 percent. (Table 3)

Moreover, the indices of the following commodity groups retained their previous month’s annual growth rates:

a.    Information and communication, 0.7 percent;
b.    Education services, 2.3 percent;
c.    Restaurants and accommodation services, 1.8 percent;
d.    Financial services, -0.3 percent; and
e.    Personal care, and miscellaneous goods and services, 6.0 percent. (Table 3)

1.2 Main Contributors to the Headline Inflation

The top three commodity groups contributing to the May 2024 headline inflation were the following:

a.    Food and non-alcoholic beverages with 53.2 percent share or 3.0 percentage points;
b.    Housing, water, electricity, gas and other fuels with 22.8 percent share or 1.3 percentage point; and
c.    Transport with 7.2 percent share or 0.4 percentage point.

2. Food Inflation

Similar to the headline inflation, food inflation at the city level accelerated to 10.0 percent in May 2024 from 6.5 percent in April 2024. In May 2023, food inflation stood at 5.9 percent. (Table 7)

2.1 Main Drivers to the Upward Trend of Food Inflation

The acceleration of food inflation in the city was mainly brought by the faster annual increase of meat and other parts of slaughtered land animals at 5.7 percent in May 2024 from an annual drop of 2.0 percent in the previous month. The faster annual growth rate of the vegetables, tubers, plantains, cooking bananas and pulses at 31.5 percent in May 2024 from 3.9 percent in April 2024 also contributed to the uptrend of the food inflation. The third main source of acceleration of the inflation was brought by the faster annual increase of corn at 15.6 percent in May 2024 from 7.4 percent annual drop in April 2024. (Table 5)

In addition, the index of fish and other seafood recorded a faster annual increase of 4.4 percent during the month from 3.8 percent in April 2024 while slower annual decrease of 1.3 percent was observed in sugar, confectionery and desserts index from 1.7 percent annual decline in April 2024. (Table 5)

On the other hand, slower annual increases were posted in the following food groups:

a.    Milk, other dairy products and eggs, 6.5 percent from 7.2 percent;
b.    Fruits and nuts, 10.7 percent from 15.3 percent; and
c.    Milk, other dairy products and eggs, 6.0 percent from 9.0 percent. (Table 5)

Moreover, oils and fats food group retained its previous month’s inflation rate at -2.1 percent. (Table 5)

2.2 Main Contributors to the Food Inflation

Food inflation shared 51.6 percent or 2.9 percentage points to the overall inflation in May 2024. The top three food groups in terms of contribution to the food inflation during the month were the following:

a.    Cereals and cereals products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, with 54.0 percent share or 5.4 percentage points;
b.    Vegetables, tubers, plantains, cooking bananas and pulses, with 16.5 percent share or 1.65 percentage points; and
c.    Meat and other parts of slaughtered land animals, with 10.9 percent share or 1.09 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:

(SDG)MELCHOR B. BAUTISTA
Chief Statistical Specialist

MJDG/LGS