Summary Inflation Report Consumer Price Index (2012=100) of MIMAROPA: September2020

Date: 

Thursday, October 22, 2020

SUMMARY INFLATION REPORT CONSUMER PRICE INDEX (2012=100)

OF MIMAROPA: SEPTEMBER 2020

 

Release Date: October 22, 2020

Reference No.:

 

Table 1. Year-on-Year Inflation Rates in the Philippines and MIMAROPA, by Province (2012=100)

Area

September 2020

August 2020

September 2019

Philippines

2.3

2.4

0.9

MIMAROPA

3.2

3.1

2.2

Marinduque

6.5

6.6

2.1

Occidental Mindoro

4.1

4.1

2.5

Oriental Mindoro

2.6

2.7

1.7

Palawan

2.7

2.2

2.6

Romblon

2.2

3.3

2.1

Source: Philippine Statistics Authority, Retail Price Survey (RPS) of Selected Commodities and Services for the Generation of Consumer Price Index (CPI)

 

The headline inflation rate at the regional level continued to exhibit a slightly faster growth of 3.2 percent in September 2020. In August 2020, the inflation was lower at 3.1 percent. During the same period in the previous year, it was posted at 2.2 percent. The uptrend of inflation in September 2020 was driven by the combined acceleration of selected commodity groups.

 

BY COMMODITY GROUP

 

Higher annual increments were noted in the indices of the following commodity groups, when compared with the annual figures from the previous month:

  • Food and Non-Alcoholic Beverages, 0.8%;
  • Clothing and Footwear, 5.2%;
  • Furnishings, Household Equipment and Routine Maintenance of the House, 5.0%;
  • Health, 7.0%;
  • Transport, 7.1%;
  • Communication, 1.5%; and
  • Education, 0.2%.

Lower annual increases were observed in the indices of the following commodity groups, when compared with the annual figures from the previous month:

  • Alcoholic Beverages and Tobacco, 16.3%;
  • Housing, Water, Electricity, Gas and Other Fuels, 4.9%;
  • Recreation and Culture, 0.5%; and
  • Restaurants and Miscellaneous Goods and Services, 3.7%.

Source: Philippine Statistics Authority, Retail Price Survey (RPS) of Selected Commodities and Services for the Generation of Consumer Price Index (CPI)

 

BY FOOD GROUP

 

The region’s food index exhibited a slightly faster growth of 0.7 percent in September 2020. The inflation rate was lower at 0.3 percent in the previous month. In September 2019, the inflation rate was significantly lower at -2.7 percent. Annual decline was noted in the index of Corn, recorded at 9.9 percent.

 

The annual indices of the following food items increased, when compared with the annual figures from the previous month:

 

  • Bread and Cereals, 0.7%;
  • Rice, 0.0%;
  • Other Cereals, Flour, Cereal Preparation, Bread, Pasta and Other Bakery Products, 3.8%;
  • Meat, 1.7%;
  • Fish, -3.9%;
  • Fruit, 6.8%; and
  • Food Products, not elsewhere classified, 10.9%.

 

On the contrary, annual upticks were slower in the following food groups, when compared with the annual figures from the previous month:

  • Milk, Cheese and Eggs, 1.7%;
  • Oils and Fats, 0.7%;
  • Vegetables, 0.2%; and
  • Sugar, Jam, Honey, Chocolate and Confectionery, 2.9%.

 

The index of Non-Alcoholic Beverages retained at 2.2 percent. It did not show a considerable difference from their respective annual figure from the previous month.

 

PURCHASING POWER OF PESO

 

The Purchasing Power of Peso (PPP) in the MIMAROPA Region maintained at 0.79 in September 2020. The PPP maintained at 0.79 since the previous month, August. As a result, the amount of goods that can be presently purchased by consumers were fewer compared to when the PPP was higher. Furthermore, the weakening of PPP was attributed to the higher consumer price index, given that they have an inverse relationship.

Source: Philippine Statistics Authority, Retail Price Survey (RPS) of Selected Commodities and Services for the Generation of Consumer Price Index (CPI)

 

TECHNICAL NOTES

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. The inflation rate is the annual rate of change or the year-on-year change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of peso. The purchasing power of the peso shows how much the peso in the base period is worth in the current period. It is computed as the reciprocal of the CPI for the period under review multiplied by 100.

 

METHODOLOGY IN REBASING THE CONSUMER PRICE INDEX TO BASE YEAR 2012

Identification of the Base Year

The base period 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. The CPI is now rebased to 2012 base year from the 2006 base year.

The year 2012 was chosen as the next base year because it was the latest year when the Family Income and Expenditure Survey (FIES) results were made available. It is also in accordance with the PSA Board Resolution No.1, Series of 2017-146, which approved the synchronized rebasing of the price indices to base year 2006 and every six (6) years thereafter.

 

Determination of the Market Basket

Market basket refers to a sample of goods and services, which is meant to represent the totality of all the goods and services purchased by households relative to a base year.

Determining the right market basket is crucial because inadequate representation of the typical basket will give wrong signals as to the behavior of prices, a very important factor in economic planning.

To determine the commodities that will form the market basket for the 2012-based CPI, the updating of the 2006 basket through the Survey of Key Informants was conducted from 07 October to 15 November 2013. The survey was conducted nationwide to store managers, sellers or proprietors and were asked of the most commonly purchased items or commodities. The commodities are grouped according to the 2010 Philippine Classification of Individual Consumption According to Purpose (PCOICOP) which is based on the United Nations COICOP.

 

Determination of the Household Consumption Patterns (Weights)

This activity involves assigning weights to the commodity groups/sub-groups.  This reflects the consumption priorities of households and the way they allocate resources to meet their needs. Weight is a value attached to a commodity or group of commodities to indicate the relative importance of that commodity or group of commodities in the market basket.

The weights for the 2012-based CPI were derived from the expenditure data of the 2012 FIES, a survey that covered around 50,000 sample households nationwide.  The weight for each item of expenditure is a proportion of that expenditure item to the total national expenditure. The total (all items) national expenditure weights is equal to 100.

The 2012 FIES expenditure data were used to directly estimate the 2012 CPI weights at the national and regional levels. However, the 2012 FIES estimates for the expenditure data at the provincial level were not directly utilized in estimating the CPI expenditure weights as the data at the provincial/city level may not be reliable with the use of the households' master sample (MS) that was utilized in selecting the 2012 FIES sample households. The MS was drawn using regions as domains in generating estimates in all the household surveys of the PSA starting July 2003.

The provincial/city expenditure data were derived using the model-based method in small area estimation procedures using the regional expenditure data as the control total for all the expenditure data within the specific region. Using these estimates, the weight for each item of expenditure is computed as a proportion of that item of expenditure to the total national expenditure. A raking procedure was done to adjust the weights of the provinces so that the provincial weights when added up will equal to the regional weights.

 

Monitoring of Prices of Items in the Market Basket

This involves establishing baseline information for prices of the items in the base year and monitoring the prices of the items on a regular basis. Collection of data for the CPI is done by the provincial staff of the PSA. Except for food, beverage and tobacco (FBT) in NCR and petroleum products which are monitored on a weekly basis, price collection is generally done twice a month. First collection phase is done in the first five days of the month while the second phase is on the 15thto 17th day of the month. Data are collected from the sample outlets (outlets or establishments where prices of commodities/services are collected or quoted) which were chosen using the following criteria:

 

  1. Popularity of an establishment along the line of goods to be priced - this means the sample outlet is publicly noted in the locality for selling goods included in the CPI market basket and the outlet is patronized by a large segment of the population.
  2. Consistency and completeness of stock

 

Consistency of stock - the outlet has a constant, steady or regular stock of commodities listed in the CPI price collection forms as well as of those commodities of the same kind and belonging to the same commodity group.

Completeness of stock- the sample outlet carries in its stock many if not all of the items included in the CPI price collection forms relative to the other outlets in the area.

  1. Permanency of outlet - the outlet is an established store or stall in the market area.

It should not be an ambulant or transient vendor in order that the collection of data can be done for the succeeding survey rounds.

  1. Geographical location- the outlet is conveniently located and is accessible to the majority of consumers in the area.

 

Computation of the CPI

Below are the steps in the computation of CPI using 2012 as the base year:

Step 1: Compute the monthly average price for each commodity

Monthly Average Price of Commodity=[Outlet 1 (1st Phase)  Price+Outlet 1 (2nd Phase)  Price+Outlet 2 (1st Phase)Price+Outlet 2 (2nd Phase)Price+Outlet 3 Price+Outlet 4 Price+Outlet 5 Price+Outlet 6 Price]/8

Step 2: Compute the price relative (PR) for each commodity

PR=  (Current Month Average Price)/(Previous Month Average Price)

 

 

(SGD) LENI R. RIOFLORIDO

Regional Director

 

Table 2. Year-on-Year Inflation Rates of MIMAROPA, by Commodity Group (2012=100)

Commodity Group

Year-on-Year Inflation (%)

September 2020

August 2020

September 2019

ALL ITEMS

3.2

3.1

2.2

 

 

 

 

I. FOOD AND NON-ALCOHOLIC BEVERAGES

0.8

0.5

-2.3

* Food

0.7

0.3

-2.7

Bread and Cereals

0.7

0.5

-6.5

     Rice

0.0

-0.3

-8.3

     Corn

9.9

13.2

21.8

Other Cereals, Flour, Cereal Preparation, Bread, Pasta and Other Bakery Products

3.8

3.4

2.7

Meat

1.7

1.6

0.2

Fish

-3.9

-4.3

0.7

Milk, Cheese and Eggs

1.7

3.2

3.0

Oils and Fats

0.7

1.6

-0.2

Fruit

6.8

3.4

14.5

Vegetables

0.2

0.6

-7.6

Sugar, Jam, Honey, Chocolate and Confectionery

2.9

4.3

-9.1

Food Products N.E.C.

10.9

6.1

4.5

* Non-alcoholic Beverages

2.2

2.2

5.7

 

 

 

 

II. ALCOHOLIC BEVERAGES AND TOBACCO

16.3

21.6

30.5

III. CLOTHING AND FOOTWEAR

5.2

4.4

1.9

IV. HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS

4.9

5.3

6.6

V. FURNISHINGS, HOUSEHOLD EQUIPMENT AND ROUTINE MAINTENANCE OF THE HOUSE

5.0

4.9

4.2

VI. HEALTH

7.0

6.6

5.0

VII. TRANSPORT

7.1

5.6

5.3

VIII. COMMUNICATION

1.5

0.7

0.1

IX. RECREATION AND CULTURE

0.5

0.8

3.4

X. EDUCATION

0.2

0.0

5.6

XI. RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES

3.7

4.4

6.7

Source: Philippine Statistics Authority, Retail Price Survey (RPS) of Selected Commodities and Services for the Generation of Consumer Price Index (CPI)

 

Table 3. Purchasing Power of Peso in MIMAROPA Region: September 2019 to September 2020 (2012=100)

 

Year

Purchasing Power of Peso

Month

2019

 

September

0.81

October

0.81

November

0.81

December

0.81

2020

 

January

0.80

February

0.80

March

0.80

April

0.80

May

0.80

June

0.80

July

0.80

August

0.79

September

0.79

Source: Philippine Statistics Authority, Retail Price Survey (RPS) of Selected Commodities and Services for the Generation of Consumer Price Index (CPI)

 

 

 

 

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