Headline Inflation

Oriental Mindoro’s headlineinflation or the overall inflation slowed down furtherto 2.1 percent in February 2024 from 2.5 percent in January 2024. This is the lowest inflation rate since the 1.8 percent recordedin April 2022. In February2023, inflation rate in the province was higher at 10.7 percent.

Main Drivers to the Down ward Trend of the Headline Inflation

The downtrend in the overall inflation in February2024 was primarily influenced by the loweryear-on-year increase in housing, water, electricity, gas and other fuels at 0.6 percent during the month from 2.5 percent in the previous month. Also contributing to the downtrend were clothing and footwear and restaurants and accommodation services with slowerannual increases of 5.2 percentand 9.1 percent, respectively in February 2024 from the previous month’srates of 7.1 percent and

10.1 percent, respectively.

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

• Alcoholic beverages and tobacco, 9.7 percent from 10.2 percent;

• Furnishings, household equipment and routine household maintenance, 5.3 percent from 6.2 percent;

• Health, 5.1 percentfrom 6.5 percent;

• Recreation, sports and culture, 3.1 percent from 3.4 percent;and

• Personal care, and miscellaneous goods and services, 3.3 percent from 3.4 percent.

Also contributed to the downtrend is the annual decrease of information and communication with a recorded declineof 0.5 percent during the month from an annual decrease of 0.1 percent in January 2024.

On the contrary, the indices of food and non-alcoholic beverages and transport exhibited higher annual increases in February 2024, while the rest of the commodity groups retained their January 2024 inflation rates.

Main Contributors to the Headline Inflation

The top three commodity groups contributing to the February 2024 overall inflation of the province were the following:

• Food and non-alcoholic beverages, 38.1 percentshare or 0.8 percentage point;

• Restaurants   and   accommodation   services,    24.8    percentage    share   or 0.5 percentage point; and

• Alcoholic beverages and tobacco, 10.0 percentage share or 0.2 percentage point.

Food Inflation

Food inflationin Oriental Mindoro rose to 1.9 percent in February 2024 from

1.7 percentin January 2024.In February 2023, food inflation rate was higher at 10.0 percent.

Main Drivers to the UpwardTrend of Food Inflation

The acceleration of food inflation in February 2024 was mainly brought by the faster year-on-year increase in the indices of rice and ready-made food and other food products at 14.4 percent and 5.8 percent, respectively from their corresponding January 2024 inflationrates of 10.3 percent and 4.9 percent,respectively. The indices of vegetables, tubers, plantains, cooking bananas and pulses and corn with an annual decline of 3.4 percentand 5.1 percent in February 2024 from an annual decrease of

13.5 percent and 7.6 percent, respectively in the previous month likewise contributed to the increase in food inflation.

On the contrary, lower inflation rates were noted in the indices of the following food groups during the month:

• Meat    and    other    parts    of    slaughtered    land    animals,    -3.0     percent from -2.6 percent;

• Fish and other seafood, -0.5 percent from 3.8 percent;

• Milk, and other dairy productsand eggs, -2.9 percent from 2.2 percent;

• Oils and fats, -14.6 percentfrom -13.5 percent;

• Fruits and nuts, -3.4 percentfrom 6.4 percent; and

• Sugar, confectionery and desserts, -5.0 percent from -2.8 percent

Meanwhile, flour, bread and other bakery products, pasta products and other cereals index remained at its January 2024 rate of 3.3 percent.

INFLATION RATE BY FOOD GROUP

Purchasing Power of the Peso

The PurchasingPower of Peso (PPP) in Oriental Mindoro is at Php 0.75 in February 2024. The PPP was registered at Php 0.76 in February 2023.

As a result,the amount of goods that could be presently purchased by consumers was lessthan 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 purchasedby households relativeto a base year.

  • To determine the commodities that will form the market basket for the 2018- based CPI, the Surveyof 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.

  • 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 numberseries. The CPI is rebasedfrom base year 2012 to base year 2018.

• Inflation Rate is the annual rate of change or the year-on-year changein 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, referenceyear)

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

100%

For example,

INFLATION RATE (Feb 2024)= [(CPI(February 2024) - CPI(February 2023)) / CPI(Febuary 2023)] x 100%

= [(133.9– 131.1) / 131.1] x 100%

= (2.8 / 131.1) x 100%

≈ 2.1