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 Mandaue
1. Headline Inflation
Inflation rate in Mandaue City decreased to 7.3 percent in May 2024 from 7.6 percent in April 2024. The city’s average inflation rate from January to May 2024 stood at 7.0 percent. While in May 2023, the inflation rate in the city was lower at 2.7 percent. (Table A and Figure 1)
1.1 Main Drivers to the Downward Trend of the Headline Inflation
The downtrend in the city’s headline inflation in May 2024 was primarily influenced by the slower year-on-year increases in the heavily-weighted food and non-alcoholic beverages at 5.7 percent, housing, water, electricity, gas and other fuels at 16.6 percent, and alcoholic beverages and tobacco at 8.8 percent from their previous month’s respective inflation rate at 6.2 percent, 17.2 percent and 10.1 percent. (Table 3)
Additionally, slower annual increase was also noted in personal care, and miscellaneous goods and services at 9.7 percent during the month from 10.1 percent in April 2024. (Table 3)
In contrast, faster annual increases were observed in the following commodity groups during the month:
a. Clothing and footwear, 0.5 percent from 0.4 percent;
b. Health, 5.3 percent from 4.9 percent;
c. Transport, 3.8 percent from 2.7 percent; and
d. Recreation, sport and culture, 5.2 percent from 5.0 percent. (Table 3)
Moreover, the indices of the following commodity groups retained their previous month’s annual growth rates:
a. Furnishings, household equipment and routine household maintenance, 3.4 percent;
b. Information and communication, 0.1 percent;
c. Education services, 0.0 percent;
d. Restaurants and accommodation services, 0.9 percent; and
e. Financial services, -0.4 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. Housing, water, electricity, gas and other fuels with 57.9 percent share or 4.2 percentage points;
b. Food and non-alcoholic beverages with 25.5 percent share or 1.9 percentage point; and
c. Personal care, and miscellaneous goods and services with 5.1 percent share or 0.4 percentage point.
2. Food Inflation
Food inflation at the city level decelerated to 6.1 percent in May 2024 from 6.6 percent in April 2024. In May 2023, food inflation stood at 6.3 percent. (Table 7)
2.1 Main Drivers to the Downward Trend of Food Inflation
The deceleration of food inflation in May 2024 was mainly brought by slower annual increase in meat and other parts of slaughtered land animals at 6.3 percent, and fruits and nuts at 8.6 percent from their respective inflation rate at 10.3 percent and 11.8 percent in the previous month. The faster annual decrease in fish and other seafood at 12.5 percent in May 2024 from 7.7 percent annual decline in April 2024 also contributed in the downtrend of the food inflation. (Table 5)
Milk, other dairy products and eggs index also recorded a slower annual increase with an inflation rate of 1.1 percent in May 2024 from 1.4 percent in the previous month.
On the other hand, higher inflation rates were observed in the following food groups:
a. Corn, -9.4 percent from -17.9 percent;
b. Vegetables, tubers, plantains, cooking bananas and pulses, 33.2 percent from 16.3 percent;
c. Sugar, confectionery and desserts, -4.0 percent from -4.7 percent; and
d. Ready-made food and other food products not elsewhere classified, 9.3 percent from 8.3 percent. (Table 5)
Moreover, oils and fats food group retained its previous month’s inflation rate at 0.3 percent. (Table 5)
2.2 Main Contributors to the Food Inflation
Food inflation shared 24.9 percent or 1.8 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 71.4 percent share or 4.4 percentage points;
b. Vegetables, tubers, plantains, cooking bananas and pulses, with 29.0 percent share or 1.8 percentage point; and
c. Meat and other parts of slaughtered land animals, with 18.0 percent share or 1.1 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
