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 eased to 3.7 percent in June 2024 from 3.9 percent in May 2024. This brings the national average inflation from January to June 2024 to 3.5 percent. In June 2023, inflation rate was higher at 5.4 percent. (Table A)
By Region
Among the 17 regions, nine regions recorded faster inflation rates during the month while seven regions recorded slower inflation rates relative to their May 2024 inflation. Central Luzon retained its inflation rate in June 2024 compared to its previous month’s rate. NCR (National Capital Region) recorded with the lowest inflation rate at 2.3 percent while BARMM recorded with the highest inflation at 5.3 percent during the month. (Figure 1)
B. Central Visayas
1. Regional Inflation
Headline inflation in Central Visayas increased to 4.8 percent in June 2024 from 4.0 percent in May 2024. This brings the regional average inflation from January 2024 to June 2024 at 3.4 percent. In June 2023, inflation rate was higher at 5.0 percent. (Table A, B, and Figure 1)
1.1 Main Drivers to the Upward Trend of the Regional Inflation
The uptrend in the regional inflation in June 2024 was primarily brought about by the faster year-on-year increase of food and non-alcoholic beverages at 7.6 percent in June 2024 from 6.4 percent in May 2024. Also contributing to the uptrend of regional inflation was the faster year-on-year increase in the index of housing, water, electricity, gas and other fuels with 2.7 percent in June 2024 from 1.6 percent in May 2024. (Table 3)
In contrast, slower annual increments during the month were observed in the indices of the following commodity groups: (Table 3)
a. Alcoholic Beverages and Tobacco, 5.4 percent from 6.1 percent;
b. Clothing and Footwear, 1.8 percent from 2.1 percent;
c. Furnishings, Household Equipment and Routine Household Maintenance, 2.6 percent from 2.8 percent;
d. Health, 3.9 percent from 4.2 percent;
e. Transport, 2.2 percent from 2.3 percent;
f. Information and Communication, 0.4 percent from 0.5 percent;
g. Recreation, Sport and Culture, 3.7 percent from 3.8 percent;
h. Restaurants and Accommodation Services, 4.1 percent from 4.3 percent; and
i. Personal Care, And Miscellaneous Goods and Services, 3.1 percent from 4.3 percent.
Meanwhile, the following commodity groups retained their previous month's rate:
a. Education Services at 1.8 percent; and
b. Financial Services at -0.2 percent.
1.2 Main Contributors to the Regional Inflation
The top three commodity groups contributing to the 4.8 percent regional inflation in June 2024 were the following:
a. Food and Non-Alcoholic Beverages with 62.2 percent share or 3.0 percentage points;
b. Housing, Water, Electricity, Gas and Other Fuels with 13.7 percent share or 0.7 percentage point; and
c. Restaurants and Accommodation Services with 7.8 percent share or 0.4 percentage point.
2. Food Inflation
Food inflation at the regional level accelerated to 8.0 percent in June 2024 from 6.7 percent in May 2024. In June 2023, food inflation was lower
at 6.3 percent. (Table 7)
2.1 Main Drivers to the Upward Trend of Food Inflation
The acceleration of food inflation in June 2024 was mainly brought about by the faster year-on-year increase in cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals index at 16.5 percent in June 2024 from 12.3 in the previous month.
In addition, the faster year-on-year increases in the indices of vegetables, tubers, plantains, cooking bananas and pulses at 17.0 percent in June 2024 from 11.4 percent in the previous month, and meat and other parts of slaughtered land animals at 7.3 percent from 6.8 percent also contributed to the upward trend of the food Inflation. (Table 5)
Moreover, faster annual increments were also noted in the indices of the following food groups during the month:
a. Oils and fats, 0.7 percent from 0.4 percent.
b. Fruits and Nuts, 3.9 percent from 3.1 percent; and
c. Ready-made food and other food products, 8.8 percent from 7.5 percent.
On the contrary, slower annual growth rate during the month was observed in the index of milk, other dairy products and eggs at 2.8 percent in June 2024 from 4.7 percent in the previous month.
In addition, faster annual declines were observed in the indices of the following food groups: (Table 5)
a. Fish and other seafood, -5.1 percent from -2.2 percent; and
b. Sugar, confectionery and desserts, -5.4 percent from -5.2 percent.
2.2 Main Contributors to the Food Inflation
Food shared 60.6 percent or 2.9 percentage point to the overall inflation in June 2024. The top three food groups in terms of contribution 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 75.6 percent share or 6.1 percentage points;
b. Meat and other parts of slaughtered land animals with 13.9 percent share or 1.1 percentage points; and
c. Vegetables, tubers, plantains, cooking bananas and pulses with 13.6 percent share or 1.1 percentage points.
C. By Province
Among the provinces and Highly Urbanized Cities (HUCs) of Central Visayas, four provinces and the three HUCs recorded faster year-on-year growth rates this month compared to the previous month’s inflation rates. (Table A, Figure 3)
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,
Inflation Rate=(CPI2 – CPI1)/CPI1 *100
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,
PPP= 1/CPI*100
Headline Inflation is the rate of change in the weighted average prices of all goods and services in the CPI basket.
Approved by:
ARIEL E. FLORENDO
Regional Director
