Headline Inflation

Oriental Mindoro’s headline inflation or the overall inflation slowed down further to 3.4 percent in December 2023 from 3.6 percent in November 2023. This makes    the province’s average inflation rate from January to December 2023 at 7.7 percent. In December 2022, inflation rate was higher at 10.5 percent. 

Main Drivers to the Downward Trend of the Headline Inflation

The downtrend in the overall inflation in the province in December 2023 was primarily brought about by the lower year-on-year increase in the index of restaurants and accommodation services at 10.6 percent in December 2023 from 12.5 percent in the previous month. This was followed by clothing and footwear with 8.0 percent inf  lation during the month from 9.7 percent in November 2023. 

Lower annual increments were noted in the indices of the following commodity groups during the month: 

• Health, 5.6 percent from 7.4 percent; 

• Alcoholic beverages and tobacco, 9.7 percent from 11.5 percent; 

• Furnishings, household equipment and routine household maintenance, 7.6 percent from 8.4 percent; and

• Recreation, Sports and Culture, 3.4 percent from 4.1 percent. 

The index for information and communication had an annual decline of 0.1 percent     in December 2023 from 0.4 percent annual increase in the previous month. 

Housing, water, electricity, gas and other fuels and education services retained their previous month’s annual increase of 5.4 percent and 3.0 percent, respectively, while financial services remained at zero percent annual rate during the month. 

The rest of the commodity groups, on the other hand, registered higher inflation rates in December 2023. 

Main Contributors to the Headline Inflation 

The top three commodity groups contributing to the December 2023 headline inflation of the province were the following: 

• Housing, water, electricity, gas and other fuels, 30.9 percentage share or 1.1 percentage points; 

• Food and non-alcoholic beverages, 22.4 percent share or 0.8 percentage point; and 

• Restaurants and accommodation services, 19.1 percentage share or 0.7 percentage point. 

   

Food Inflation 

Food inflation in Oriental Mindoro exhibited an upward movement in December 2023 at 1.8 percent from 1.5 percent in November 2023. In December 2022, food inflation rate was higher at 9.2 percent. 

Main Drivers to the Upward Trend of Food Inflation 

The higher food inflation during the month was mainly brought by the higher annual growth in rice at 10.0 percent from 1.2 percent in November 2023. This was followed by fish and other seafood with an inflation rate of 5.0 percent in December 2023 from 4.3 percent in the previous month.   

The index of oils and fats recorded an annual decline of 13.1 percent in December 2023 from an annual decline of 14.7 percent in November 2023. Fruits and nuts index with inflation rate of 3.6 percent during the month from 3.4 percent in November 2023 also contributed to the higher food inflation in the province. 

On the contrary, lower year-on-year growth rates were noted in the indices of the following food groups during the month: 

• Corn, -5.8 percent from -1.8 percent; 

• Flour, bread and other bakery products, pasta products, 4.0 percent from 5.8 percent; 

• Meat and other parts of slaughtered land animals, -6.3 percent from -4.0 percent; 

• Milk, and other dairy products and eggs, 1.9 percent from 2.6 percent; 

• Vegetables, tubers, plantains, cooking bananas and pulses, -3.6 percent from 10.1 percent; 

• Sugar, confectionery and desserts, -3.6 percent from -2.5 percent; and 

• Ready-made food and other food products, -1.3 percent from 0.7 percent. 

Purchasing Power of the Peso

The Purchasing Power of Peso (PPP) in Oriental Mindoro is at Php 0.75 in December 2023. The PPP was registered at Php 0.77 in December 2022. 

As a result, the amount of goods that could be presently purchased by consumers were fewer compared to when the PPP was higher. Furthermore, the decrease in PPP was attributed to the higher inflation rate, given that PPP and inflation rate have an inverse relationship. 

Consumer Price Index is an indicator of the change in the average prices of a fixed basket of goods and services commonly purchased by households relative to a base year 

• Market Basket is 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. 

o To determine the commodities that will form the market basket for the 2018based CPI, the Survey of Key Informants (SKI) was conducted in March 2021. The survey, which was conducted nationwide to store managers, sellers or proprietors, obtained information on the most commonly purchased of goods and availed of services by the households. o The commodities in the 2018-based CPI market basket are grouped/classified according to the 2020 Philippine Classification of Individual Consumption According to Purpose (PCOICOP) which is based on the United Nations COICOP. Meanwhile, the commodities in the 2012-based CPI market basket used the 2009 PCOICOP version of classification of commodities. 

• Base year is a reference 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 rebased from base year 2012 to base year 2018. 

• Inflation Rate is the annual rate of change or the year-on-year change in the Consumer Price Index (CPI). 

• Purchasing Power of Peso 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 

 Inflation Rate (reference month, reference year)  = [(CPI (reference month, reference year) - CPI (reference month, previous year)) / CPI (reference month, previous year)] x

100% 

For example, 

INFLATION RATE (Dec 2023) = [(CPI(December 2023) - CPI(December 2022)) / CPI(December 2022)] x 100% 

                                                       = [(133.7 – 129.3) / 129.3] x 100% 

                                                       = (4.4 / 129.3) x 100% 

                                                         ≈ 3.4