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. City of Cebu

1. Headline Inflation

The headline inflation rate for the bottom 30% income households in the City of Cebu has faster increase at 6.6 percent in May 2024 from 5.2 percent in April 2024. This brings the city’s average inflation at 4.9 percent from January to May 2024 while in May 2023, the inflation rate was recorded 2.2 percent. (Table A and Figure 1)

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

The main source to the upward trend of the headline inflation rate for this commodity group in May 2024 was the faster annual increases of food and non-alcoholic beverages at 9.3 percent, transport at 4.5 percent, and clothing and footwear at 2.3 percent from their previous month’s respective inflation rate at 5.3 percent, 4.2 percent, and 2.0 percent. (Table 3)

In contrast, slower year-on-year increases were recorded in the indices of the following commodity group during the month:

a.    Alcoholic beverages and tobacco, 3.8 percent from 9.9 percent;
b.    Housing, water, electricity, gas and other fuels, 6.4 percent from 7.3 percent;
c.    Furnishing, household equipment and routine household maintenance, 3.9 percent from 4.0 percent;
d.    Health, 3.3 percent from 4.2 percent; and
e.    Personal care, and miscellaneous goods and services, 5.5 percent from 5.7 percent. (Table 3)

Moreover, the indices of commodity groups that retained their previous month’s inflation were as follows:

a.    Information and communication, 0.0 percent;
b.    Recreation, sport and culture, 18.1 percent;
c.    Education services, 4.2 percent;
d.    Restaurants and accommodation services, 2.1 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 three contributors to the May 2024 overall inflation for the bottom 30% income households in the City of Cebu:

a.    Food and non-alcoholic beverages with 64.7 percent share or 4.3 percentage points;
b.    Housing, water, electricity, gas and other fuels with 19.1 percent share or 1.3 percentage point; and
c.    Restaurants and accommodation services with 4.4 percent share or 0.3 percentage point.

2. Food Inflation

Food inflation rate for the bottom 30% income households in the City of Cebu had a faster increase at 9.9 percent in May 2024 from 5.5 percent in the previous month. In May 2023, the food inflation was lower at 5.2 percent. (Table 7)

2.1    Main Drivers to the Uptrend of Food Inflation

The uptrend in the food inflation was primarily driven by the faster annual increase of vegetables, tubers, plantains, cooking bananas and pulses at 38.1 percent in May 2024 from 1.7 percent in the previous month. The faster annual increases of meat and other parts of slaughtered land animals at 5.5 percent and corn at 15.6 percent in May 2024 from their respective rate at     2.2 percent and 7.4 percent annual decline in April 2024.

Furthermore, faster year-on-year increase of fish and other seafood at 3.4 percent from 0.6 percent annual drop in April 2024 while slower annual decrease of sugar, confectionary and desserts at 2.7 percent from 3.3 percent annual drop in April 2024 were also contributed in the acceleration of the food inflation.

On the contrary, slower annual increases were noted in the indices of the following food groups during the month:

a.    Milk, other dairy products and eggs, 6.5 percent from     7.6 percent;
b.    Fruits and nuts, 12.8 percent from 17.5 percent; and
c.    Ready-made food and other food products, 5.6 percent from 8.8 percent

Meanwhile, the index of oils and fats retained its previous month’s rate at -2.5 percent.

2.2 Main Contributors to the Food Inflation

Food inflation contributed 63.0 percent or 4.2 percentage points 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 60.0 percent share or 5.9 percentage points;
b.    Vegetables, tubers, plantains, cooking bananas and pulses with 18.4 percent share or 1.8 percentage point; and
c.    Meat and other parts of slaughtered land animals with 7.7 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