A.    The Philippines

The country’s inflation rate for the bottom 30% income households retained its previous month’s rate at 5.3 percent in May 2024. This brings the average inflation for this income group from January to May 2024 to 4.6 percent. In May 2023, the inflation rate was posted at 6.7 percent. (Table A)

B. Central Visayas

1.    Regional Inflation

Inflation rate for the bottom 30% income households in Central Visayas increased to 5.7 percent in May 2024 from 3.9 percent in April 2024. The region’s average inflation for this income group from January to May 2024 stood at 3.7. In May 2023, the inflation rate in the region was higher which recorded at 7.1 percent. (Table A)

C. Province of Cebu

1. Headline Inflation

The headline inflation rate for the bottom 30% income households in the Province of Cebu had a faster increase at 3.5 percent in May 2024 from 0.2 percent annual decline in April 2024. This brings the province’s average inflation at 0.3 percent from January to May 2024.  In May 2023, the inflation rate was higher which recorded at 5.6 percent. (Table A and Figure 1)

1.1    Main Drivers to the Upward Trend of Headline Inflation in the Province of Cebu

The main driver to the upward trend of the headline inflation in May 2024 was the faster year-on-year increase of the heavily-weighted food and non-alcoholic beverages at 4.3 percent from 1.0 percent annual drop in the previous month. The slower annual decrease in transport at 0.3 percent in May 2024 from 13.0 percent annual decline in April 2024 also contributed in the uptrend of headline inflation. The third main driver of acceleration of the inflation was brought by the faster annual increase of housing, water, electricity, gas and other fuels at 2.8 percent in May 2024 from 2.2 percent in April 2024. (Table 3)

In addition, faster annual increases were also observed in recreation sport and culture at 4.9 percent and health at 3.8 percent, from their respective inflation rate at 4.6 and 3.7 percent in the previous month. (Table 3)

On the other hand, slower annual increases were posted in the indices of the following commodity group during the month:

a.    Alcoholic beverages and tobacco 5.9 percent from 8.1 percent;
b.    Furnishings, household equipment and routine household maintenance, 2.0 percent from 2.1 percent; and
c.    Personal care, and miscellaneous goods and services, 3.8 percent from 3.9 percent. (Table 3)

Moreover, 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, 0.0 percent;
c.    Education services, 0.2 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 following commodity groups were the top contributors to the May 2024 overall inflation for the bottom 30% income households in the Province of Cebu:

a.    Food and non-alcoholic beverages with 64.0 percent share or 2.2 percentage points.
b.    Housing, water, electricity, gas and other fuels with 13.8 percent share or 0.5 percentage point; and
c.    Restaurants and accommodation services with 7.6 percent share or 0.3 percentage point.

2. Food Inflation

Food inflation rate for the bottom 30% income households in the Province of Cebu had a faster increase at 4.2 percent in May 2024 from 1.4 percent annual decline in the previous month. In May 2023, food inflation stood at 4.8 percent. (Table 7)

2.1    Main Drivers to the Uptrend of Food Inflation

The uptrend in the food inflation was mainly due to the faster annual growth in corn with 0.0 percent in May 2024 from 20.3 percent annual drop in April 2024. Also contributed to the uptrend was the faster annual increase in vegetables, tubers, plantains, cooking bananas and pulses at 12.1 percent from 1.4 percent in the previous month. The third main source of the acceleration was brought by the slower annual decrease of fish and other seafood at 7.5 percent from 9.0 percent annual decrease in April 2024. (Table 5)

Additionally, faster annual increases were noted in ready-made food and other food products at 9.4 percent, and oils and fats at 1.1 percent during the month from their respective inflation rate at 9.0 percent and 0.8 percent in April 2024. (Table 5)

In contrast, lower inflation rates were recorded in the indices of the following food groups during the month:

a.    Meat and other parts of slaughtered land animals, 7.7 percent from 10.8 percent;
b.    Milk, other dairy products and eggs, 7.6 percent from 8.4 percent;
c.    Fruits and nuts, -0.1 percent from 6.0 percent; and
d.    Sugar, confectionary and desserts at -7.4 percent from -4.4 percent. (Table 5)

2.2 Main Contributors to the Food Inflation

Food inflation contributed 58.0 percent or 2.0 percentage point to the May 2024 overall inflation for this particular income group.

Among the food groups, the main contributors to the food inflation during the month were the following:

a.    Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, with 73.6 percent share or 
3.1 percentage points;
b.    Meat and other parts of slaughtered land animals with 22.7 percent share or 1.0 percentage point; and
c.    Vegetables, tubers, plantains, cooking bananas and pulses with 19.9 percent share or 0.8 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