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. Province of Cebu
1. Headline Inflation
The headline inflation rate in the Province of Cebu accelerated to 2.3 percent in May 2024 from 0.2 percent in April 2024. The province’s average inflation rate from January to May 2024 stood at 0.4 percent. While in May 2023, the inflation rate was higher which recorded at 5.4 percent. (Table A and Figure 1)
1.1 Main Drivers to the Upward Trend of Headline Inflation in the Province of Cebu
The uptrend of the headline inflation in May 2024 was primarily influenced by the year-on-year faster increase in the heavily weighted food and non-alcoholic beverages at 5.2 percent during the month from 2.4 percent in April 2024. The faster annual increase of transport at 0.7 percent in May 2024 from 7.7 percent annual decline in the previous month also contributed to the uptrend of the headline inflation. The third main source of the acceleration of the headline inflation was brought by the slower annual decrease of the housing, water, electricity, gas and other fuels at 4.2 percent in May 2024 from 5.0 percent annual drop in April 2024. (Table 3)
Moreover, faster annual increases were also noted in health at 4.9 percent and recreation, sport and culture at 1.7 percent during the month from their respective inflation rates at 4.8 percent and 1.6 percent in the previous month. (Table 3)
On the other hand, slower annual increases were recorded in the following commodity groups during the month:
a. Alcoholic beverages and tobacco, 8.1 percent from 11.4 percent;
b. Furnishings, household equipment and routine household maintenance, 2.7 percent from 2.9 percent; and
c. Personal care, and miscellaneous goods and services, 2.9 percent from 3.1 percent. (Table 3)
The indices of commodity groups that retained their previous month’s inflation were as follows:
a. Clothing and footwear, 0.8 percent;
b. Information and communication, 0.4 percent;
c. Education services, 0.5 percent;
d. Restaurants and accommodation services, 2.7 percent; and
e. Financial services, 0.0 percent. (Table 3)
1.2 Main Contributors to the Headline Inflation
The top three commodity groups that contributed to the May 2024 headline inflation were the following:
a. Food and non-alcoholic beverages with 101.1 percent share or 2.3 percentage points;
b. Restaurants and accommodation services with 12.9 percent share or 0.3 percentage point; and
c. Alcoholic beverages and tobacco with 6.9 percent share or 0.2 percentage point.
2. Food Inflation
Food inflation in the Province of Cebu increased to 5.3 percent in May 2024 from 2.3 percent in April 2024. In May 2023, food inflation was higher at 6.1 percent. (Table 7)
2.1 Main Drivers to the Uptrend of Food Inflation
The acceleration of food inflation in the province was mainly brought by the faster annual increase of corn at 0.0 percent in May 2024 from an annual drop of 20.3 percent in the previous month; faster annual increase of vegetables, tubers, plantains, cooking bananas and pulses at 10.3 percent in May 2024 from 0.3 percent in April 2024, and slower year-on-year decrease was also noted in the index of fish and other seafood at 2.9 percent in May 2024 from an annual decline of 4.2 percent in April 2024. (Table 5)
Additional faster annual increases were also noted in the indices of ready-made food and other food products at 9.0 percent, and oils and fats at 1.5 percent from their respective inflation rates at 8.7 percent and 1.3 percent in the previous month. (Table 5)
On the contrary, lower inflation rates during the month were observed in the indices of the following food groups:
a. Meat and other parts of slaughtered land animals, 7.2 percent from 10.3 percent;
b. Milk, other dairy products and eggs, 7.9 percent from 8.7 percent.
c. Fruits and nuts, -0.4 percent from 5.4 percent; and
d. Sugar, confectionery and desserts, -6.3 percent from -3.6 percent. (Table 5)
2.2 Main Contributors to the Food Inflation
Food inflation shared 94.8 percent or 2.2 percentage points to the overall inflation in May 2024. The food groups with highest 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 a share of 59.3 percent or 3.1 percentage points;
b. Meat and other parts of slaughtered land animals, with a share of 21.5 percent or 1.1 percentage point; and
c. Milk, other dairy products and eggs, with a share of 13.2 percent 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:
(SGD) MELCHOR B. BAUTISTA
Chief Statistical Specialist
MJDG/LGS
