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 May 2022. The CPI series for all income households for January 2022 onwards will be 2018-based.
A. The Philippines
The country’s inflation rate for the bottom 30% income households increased to 5.5 percent in June 2024 from 5.3 percent in May 2024. This brings the average inflation for this income group from January to June 2024 to 4.8 percent. In June 2023, inflation rate was posted at 6.1 percent. (Table A)
By Region
Among the 17 regions, ten regions recorded faster inflation rates for the bottom 30% income households during the month and six regions recorded slower inflation rates relative to its May 2024 inflation rate while one region retained its previous month’s rate. NCR (National Capital Region) recorded the lowest inflation rate at 3.5 percent while Region VII (Central Visayas) recorded the highest inflation at 7.0 percent during the month. (Figure 1)
B. Central Visayas
1.Regional Inflation
Inflation for the bottom 30% income households in Central Visayas increased to 7.0 percent in June 2024 from 5.7 percent in May 2024. In June 2023, inflation rate was recorded at 7.1 percent. (Table A, B, and Figure 1)
1.1 Main Drivers to the Upward Trend of the Regional Inflation
The main driver to the upward trend of the overall inflation for this income group in June 2024 was the faster year-on-year growth of the heavily-weighted food and non-alcoholic beverages at 8.9 percent from 6.4 percent in the previous month. In addition, faster year-on-year increases were observed in the indices of housing, water, electricity, gas and other fuels, at 7.4 percent in June 2024 from 6.5 percent in the previous month, and transport at 1.8 percent from 1.6 percent. (Table 3)
In contrast, slower annual growth rates were noted in the indices of the following food groups during the month:
a. Alcoholic Beverages and Tobacco, 4.6 percent from 5.6 percent;
b. Clothing and Footwear, 1.7 percent from 2.0 percent;
c. Furnishings, Household Equipment and Routine Household Maintenance, 1.7 percent from 1.9 percent;
d. Health, 3.2 percent from 3.4 percent;
e. Recreation, Sport and Culture, 5.8 percent from 5.9 percent;
f. Restaurants and Accommodation Services, 4.7 percent from 4.8 percent; and
g. Personal Care, and Miscellaneous Goods and Services, 3.2 percent from 4.6 percent.
Meanwhile, the following commodity groups retained their previous month's rate:
a. Information and Communication at 0.0 percent;
b. Education Services at 1.5; and
c. Financial Services, at -0.2 percent.
1.2 Main Contributors to the Regional Inflation
The following commodity groups were the top three contributors to the June 2024 overall inflation for the bottom 30% income households:
a. Food and Non-Alcoholic Beverages with 67.5 percent share or 4.7 percentage points;
b. Housing, Water, Electricity, Gas and Other Fuels with 18.5 percent share or 1.3 percentage points; and
c. Restaurants and Accommodation Services with 5.8 percent share or 0.4 percentage point.
2. Food Inflation
Food inflation for the bottom 30% income households at the regional level moved at a faster pace of 9.3 percent in June 2024 from 6.7 percent in the previous month. In June 2023, its annual increase was observed at 5.7 percent. (Table 7)
2.1 Main Drivers to the Upward Trend of Food Inflation
The acceleration of food inflation in June 2024 for the bottom 30% income household was mainly brought about by the faster year-on-year increase in the index of cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals at 17.7 percent in June 2024 from 11.7 percent in the previous month.
In addition, the faster year-on-year increases in the indices of vegetables, tubers, plantains, cooking bananas and pulses at 15.1 percent in June 2024 from 10.6 percent in the previous month, and meat and other parts of slaughtered land animals at 7.6 percent from 7.1 percent also contributed to the upward trend of the food Inflation. (Table 5)
Faster annual increases during the month were also noted in the indices of the following food groups:
a. Oils and fats, 1.0 percent from 0.3 percent.
b. Fruits and Nuts, 3.0 percent from 1.5 percent; and
c. Ready-made food and other food products, 7.6 percent from 6.4 percent.
On the contrary, slower annual increase was recorded in the index of milk, other dairy products and eggs at 1.9 percent in June 2024 from 4.4 percent in the previous month.
In addition, faster annual declines were noted in the indices of fish and other seafood at 5.3 percent in June 2024 from 3.2 percent annual decline in May 224 and sugar, confectionary and desserts at 8.1 percent from annual decline of 7.9 percent in the previous month.
2.2 Main Contributors to the Food Inflation
Food inflation contributed 65.9 percent or 4.6 percentage points to the June 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 86.9 percent share or 8.1 percentage points;
b. Vegetables, tubers, plantains, cooking bananas and pulses with 10.7 percent share or 1.0 percentage point; and
c. Meat and other parts of slaughtered land animals with 8.7 percent share or 0.8 percentage point.
C. By Province
Among the Provinces and Highly Urbanized Cities (HUCs) in Central Visayas, three provinces and two HUCs recorded faster year-on-year increases this month compared to the previous month’s inflation rates. In contrast, the Province of Bohol and the City of Mandaue registered a slower annual increment this month relative to their respective May 2024 annual 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
