Siquijor CPI increases at 128.0
Consumer Price Index or CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is an indicator of the changes in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to the base year.
As of May 2020 the survey of retail prices of commodities conducted by Philippine Statistics Authority (PSA) has generated a CPI of 128.0 using 2012 as the base year. But it has a slight decrease of 0.5 from April 2020 which posted a CPI of 128.5. During the same period in 2019, the CPI was at 125.7. The CPI for May 2020 period implied that the cost of a basket of goods and services commonly purchased by typical Filipino households in the Province of Siquijor was at an average of P128.0. Price indices are used for economic analysis and as a monitoring indicator of government’s economic policy. Table 1 below shows the CPI result of Siquijor by commodity group.
Table 1. Consumer Price Index (CPI) by Commodity Group: Siquijor (2012=100)
As shown in Table 1, a commodity under Alcoholic Beverages and Tobacco continues to rise and remains with the highest CPI at 177.3. It was followed the commodity group of Furnishings, Household Equipment and Maintenance of the House which recorded a CPI at 141.8 which is still the same with the previous month. Housing, Electricity, Gas and other Fuels recorded at 133.5. The rest of the commodity groups had CPI lower than the provincial average of 128.0 for all items.
Figure 1 below shows the graph of CPI for all items from May 2019 to May 2020.
Figure 1: Consumer Price Index (CPI) for all Items: Siquijor, May 2019 to May 2020
Siquijor Province Inflation lowered at 1.8% in May 2020
Siquijor inflation in May 2020 decreased to 1.8% from the previous month with inflation at 2.8%. It also decreased from the same period in May 2019 with an inflation of 4.6%.
Inflation Rate is the rate of change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of peso. See Table 2 for the year on year Inflation rate for all items.
Table 2. Year on Year Inflation Rate (All Items) and Purchasing Power of Peso (2012=100)
The decrease of inflation was mainly driven by those commodities that were slowly increasing or with negative value in May 2020 from the same period last year (May 2019). See Table 3 below for the complete list of commodity group and its corresponding inflation rate.
Table 3. Consumer Price Index (CPI) and Inflation Rates by Commodity Group: Siquijor (2012=100)
Consumer Price Index and Inflation Rates of Selected Food Items
On the selected food items, highest inflation was recorded in Vegetable at 21.5% followed by Food Products not elsewhere classified at 8.1% and Fruits at 7.1%. Other food items but with lower inflation are Corn (3.9%) Milk, Cheese and Eggs (3.6%) and Meat and Fish with same inflation at 1.4%. Food groups that have negative inflation in May 2020 are the following:
Rice (-5.6%)
Oils and Fats (-3.5%)
Bread and Cereals (-3.2%)
Table 4 below is the complete list of inflation rates of selected food items for May 2020.
Table 4. Consumer Price Index (CPI) and Inflation Rates of Selected Food Items: Siquijor (2012=100)
Purchasing Power of Peso (PPP) remains at 0.78
For five months since January 2020 the purchasing power of peso in Siquijor Province remains at 78 centavos. It has a difference of 2 centavos from May 2019 with a PPP of 80 centavos. The PPP at 78 centavos means that the value of Php 1.0 in 2012, as the base year, PPP values only at Php 0.78 in May 2020.
Purchasing Power of Peso (PPP) is computed as the reciprocal of the CPI for the period under review multiplied by 100. The PPP is inversely related to inflation rate. Thus, as the inflation rate increases, PPP declines.
Figure 2 shows the declining graph of purchasing power of peso from May 2019 to May 2020.
Figure 2: Purchasing Power of Peso (PPP): Siquijor, 2012 = Php 1.00
TECHNICAL NOTES
Uses of CPI
The CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is a major statistical series used for economic analysis and as monitoring indicator of the government economic policy.
Computation of CPI
The computation of CPI involves consideration of the following important points:
a. Base Period – The reference date or base period is the benchmark or reference date or period at which the index is taken as equal to 100.
b. Market Basket – A sample of the thousands of varieties of goods purchased for consumption and the services availed by the households in the country selected to represent the composite price behavior of sll goods and services purchased by consumers.
c. Weighting System – The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure.
d. Formula – The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2012) weights.
e. Geographic Coverage – CPI values are computed at the national, regional, and provincial levels, and or selected cities.
(SGD.) AURELIA M. CANDA
Chief Statistical Specialist
