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 3.7 percent in March 2024 from 3.4 percent in February 2024. This brings the national average inflation from January 2024 to March 2024 at 3.3 percent. In March 2023, inflation rate was higher at 7.6 percent. (Table A)
B. Central Visayas
1. Regional Inflation
Following the trend at the national level, inflation rate in Central Visayas also increased to 3.2 percent in March 2024 from 2.7 percent in February 2024. This brings the regional average inflation from January to March 2024 at 2.8 percent. In March 2023, inflation rate in the region was higher at 6.6 percent. (Table A)
C. City of Cebu
1. Headline Inflation
Inflation rate in Cebu City also increased to 4.7 percent in March 2024 from 4.5 percent in February 2024. The city’s average inflation rate from January to March 2024 stood at 4.6 percent. While in March 2023, the inflation rate in the city stood at 4.3 percent. (Table A and Figure 1)
1.1 Main Drivers to the Upward Trend of the Headline Inflation
The uptrend in the city’s headline inflation in March 2024 was brought by the higher year-on-year increase in the heavily-weighted transport commodity group at 4.9 percent during the month from 4.2 percent in February 2024. In addition, the faster annual increases in the indices of health at 5.1 percent during the month from 4.0 percent in February 2024, and food and non-alcoholic beverages at 6.6 percent in March 2024 from 6.5 percent in the previous month contributed to the uptrend. (Table 3, All Income)
In addition, higher inflation rates were also recorded in the indices of clothing and footwear at 2.0 percent and recreation, sport and culture at 10.1 percent during the month from their respective inflation rates 1.7 percent and 10.0 percent in the previous month. (Table 3, All Income)
On the contrary, lower inflation rates were observed in the following commodity groups during the month:
a. Alcoholic beverages and tobacco, at 9.1 percent from 10.8 percent; and
b. Furnishings, household equipment and routine household maintenance, 1.7 percent from 2.0 percent. (Table 3, All Income)
Moreover, the indices of the following commodity groups retained their previous month’s annual growth rates:
a. Housing, water, electricity, gas and other fuels, 3.9 percent;
b. Information and communication, 0.0 percent;
c. Education services, 2.3 percent;
d. Restaurants and accommodation services, 1.8 percent;
e. Financial services, -0.3 percent; and
f. Personal care, and miscellaneous goods and services, 6.3 percent. (Table 3)
1.2 Main Contributors to the Headline Inflation
The top three commodity groups contributing to the March 2024 headline inflation were the following:
a. Food and non-alcoholic beverages with 47.2 percent share or 2.2 percentage points;
b. Housing, water, electricity, gas and other fuels with 22.0 percent share or 1.0 percentage point; and
c. Transport with 8.4 percent share or 0.4 percentage point.
2. Food Inflation
Food inflation at the city level rose to 6.9 percent in March 2024 from 6.7 percent in February 2024. In March 2023, food inflation stood still at 5.2 percent. (Table 7)
2.1 Main Drivers to the Upward Trend of Food Inflation
The acceleration of food inflation in March 2024 was mainly brought by the slower year-on-year decrease in vegetables, tubers, plantains, cooking bananas and pulses index at 10.3 percent in March 2024 from 21.1 percent annual decline in the previous month. In addition, cereals and cereals products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals index recorded a faster annual increment of 14.3 percent during the month from 13.8 percent in February 2024. (Table 5)
The inflation rate of meat and other parts of slaughtered land animals recorded an annual increase of 0.3 percent during the month from a 0.1 percent annual decline in February 2024. Moreover, faster annual increase were observed in ready-made food and other food products n.e.c., food groups at 6.9 percent during the month from 6.2 percent in February 2024. (Table 5)
On the other hand, lower inflation rates were observed in the following food groups:
a. Fish and other seafood, 7.6 percent from 12.5 percent;
b. Milk, other dairy products and eggs, 9.6 percent from 10.1 percent;
c. Oils and fats, -2.1 percent from 0.1 percent;
d. Fruits and nuts, 16.1 percent from 18.4 percent; and
e. Sugar, confectionery and desserts, -0.4 percent from 2.8 percent. (Table 5)
2.2 Main Contributors to the Food Inflation
Food inflation shared 44.9 percent or 2.1 percentage points to the overall inflation in March 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 67.3 percent share or 4.6 percentage points;
b. Fish and other seafood, with 14.6 percent share or 1.0 percentage points; and
c. Milk, other dairy products and eggs, with 12.2 percent share or 0.8 percentage points.
3. Overall Inflation for the Bottom 30% Income Households
The Philippines
The country’s inflation rate for the bottom 30% income households increased to 4.6 percent in March 2024 from 4.2 percent in February 2024. In March 2023, inflation rate was posted at 8.8 percent. (Table C)
Central Visayas
Following the trend at the national level, inflation rate for the bottom 30% income households in Central Visayas also increased to 3.3 percent in March 2024 from 2.8 percent in February 2024. In March 2023, inflation rate in the region was higher at 9.8 percent. (Table C)
City of Cebu
Inflation rate for the bottom 30% income households in Cebu City also increased to 4.2 percent in March 2024 from 3.7 percent in February 2024. While in March 2023, the inflation rate in the city stood at 3.8 percent. (Table C and Figure 2)
3.1 Main Drivers to the Upward Trend of the Overall Inflation
The main driver to the upward trend of the city’s overall inflation for this income group in March 2024 was brought by the annual increase of 1.5 percent in housing, water, electricity, gas and other fuels during the month from a 0.7 percent annual decline in February 2024. The faster annual increase of food and non-alcoholic beverages at 5.8 percent during the month from 5.6 percent in the previous month also contributed to the uptrend of the overall inflation of the city. (Table 3, Bottom 30%)
In addition, higher annual increments were also posted in clothing and footwear at 1.5 percent during the month from 1.0 percent in February 2024, transport at 4.3 percent during the month from 4.2 percent from previous month, and recreation, sport and culture at 18.1 percent during the month from 18.0 percent in February 2024. (Table 3, Bottom 30%)
On the contrary, lower inflation rates were observed in the following commodity groups during the month:
a. Alcoholic beverages and tobacco, at 9.9 percent from 13.1 percent;
b. Furnishings, household equipment and routine household maintenance, 4.1 percent from 4.4 percent;
c. Health, 4.2 percent from 5.3 percent; and
d. Personal care, and miscellaneous goods and services, 5.8 percent from 5.9 percent.
Moreover, the indices of the following commodity groups retained their previous month’s annual growth rates:
g. Information and communication, 0.0 percent;
h. Education services, 4.2 percent;
i. Restaurants and accommodation services, 2.1 percent; and
j. Financial services, 0.0 percent. (Table 3, Bottom 30%)
3.2 Main Contributors to the Overall Inflation
The following commodity groups were the top three contributors to the March 2024 overall inflation for the bottom 30% income households:
a. Food and non-alcoholic beverages with 63.9 percent share or 2.7 percentage points;
b. Housing, water, electricity, gas and other fuels with 7.1 percent share or 0.3 percentage point; and
c. Restaurants and accommodation services with 6.9 percent share or 0.3 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
