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 4.4 percent in July 2024 from 3.7 percent in June 2024. This brings the national average inflation from January to July 2024 to 3.7 percent. In July 2023, inflation rate was higher at 4.7 percent. (Table A)
By Region
Among the 17 regions, 14 regions recorded faster inflation rates during the month while three regions recorded slower inflation rates relative to their June 2024 inflation. Region I (Ilocos Region) recorded with the lowest inflation rate at 3.3 percent while BARMM and Region X (Northern Mindanao) recorded with the highest inflation at 5.7 percent during the month. (Figure 1)
B. Central Visayas
1. Regional Inflation
Headline inflation in Central Visayas decreased to 4.5 percent in July 2024 from 4.8 percent in June 2024. This brings the regional average inflation from January 2024 to July 2024 at 3.6 percent. In July 2023, inflation rate was lower at 4.1 percent. (Table A, B, and Figure 1)
1.1 Main Drivers to the Downward Trend of the Regional Inflation
The downward in the regional inflation in July 2024 was primarily brought about by the slower year-on-year increase of housing, water, electricity, gas and other fuels at 0.3 percent in July 2024 from 2.7 percent in June 2024.
In addition, the slower year-on-year increases in the indices of transport at 2.0 percent in July 2024 from 2.2 percent in the previous month, and restaurants and accommodation services at 3.9 percent in July 2024 from 4.1 percent in the previous month also contributed to the downward trend of the regional inflation. (Table 3)
A slower annual increment during the month was also observed in the index of alcoholic beverages and tobacco. This commodity group posted 4.4 percent inflation in July 2024 from 5.4 percent in June 2024: (Table 3)
In contrast, faster annual increments during the month were observed in the indices of the following commodity groups: (Table 3)
a. Food and Non-Alcoholic Beverages, 8.6 percent from 7.6 percent;
b. Furnishings, Household Equipment and Routine Household Maintenance, 2.9 percent from 2.6 percent;
c. Health, 4.0 percent from 3.9 percent;
d. Recreation, Sport and Culture, 3.9 percent from 3.7 percent;
e. Education Services, 4.9 percent from 1.8 percent; and
f. Personal Care, And Miscellaneous Goods and Services, 3.2 percent from 3.1 percent.
Meanwhile, the following commodity groups retained their previous month's rate:
a. Clothing and Footwear at 1.8;
b. Information and Communication at 0.4 percent; and
c. Financial Services at -0.2 percent.
1.2 Main Contributors to the Regional Inflation
The top three commodity groups contributing to the 4.5 percent regional inflation in July 2024 were the following:
a. Food and Non-Alcoholic Beverages with 72.9 percent share or 3.3 percentage points;
b. Restaurants and Accommodation Services with 7.7 percent share or 0.4 percentage point; and
c. Transport with 4.2 percent share or 0.2 percentage point.
2. Food Inflation
Food inflation at the regional level rose to 9.1 percent in July 2024 from 8.0 percent in June 2024. In July 2023, food inflation was lower at 5.2 percent. (Table 7)
2.1 Main Drivers to the Upward Trend of Food Inflation
The acceleration of food inflation in July 2024 was mainly brought about by the year-on-year increase in corn at 27.7 percent in July 2024 from 18.0 percent in the previous month. The index of fish and other seafood also contributed to the uptrend with an annual decline of 2.9 percent during the month from a year-on-year decrease of 5.1 percent in June 2024. Moreover, faster annual increment was noted in the index of meat and other parts of slaughtered land animals at a rate of 8.4 percent from 7.3 percent in June 2024.
In addition, faster annual increase was noted in the index of fruits and nuts at 5.8 percent in July 2024 from3 .9 percent in June 2024.
On the contrary, slower annual increments during the month were observed in the indices of the following food groups: (Table 5)
a. Rice, 19.4 percent from 20.3 percent;
b. Flour, bread and other bakery products, pasta products, and other cereals, 3.5 percent from 4.9 percent;
c. Milk, other dairy products, and eggs, 2.3 percent from 2.8 percent;
d. Oils and fats, 0.5 percent from 0.7 percent;
e. Vegetables, tubers, plantains, cooking bananas and pulses, 15.5 percent from 17.0 percent;
f. Ready-made food and other food products n.e.c., 7.8 percent from 8.8 percent.
Meanwhile, sugar, confectionery and desserts retained its previous month's rate at -5.4 percent.
2.2 Main Contributors to the Food Inflation
Food shared 71.6 percent or 3.2 percentage points to the overall inflation in July 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 73.5 percent share or 6.7 percentage points;
b. Meat and other parts of slaughtered land animals with 14.3 percent share or 1.3 percentage points; and
c. Vegetables, tubers, plantains, cooking bananas and pulses with 11.1 percent share or 1.0 percentage point.
C. By Province
Among the provinces and Highly Urbanized Cities (HUCs) of Central Visayas, two provinces and the three HUCs recorded slower year-on-year growth rates this month compared to the previous month’s inflation rates while two provinces 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:
(SGD.)
ARIEL E. FLORENDO
Regional Director
