Table 1. Year-on-Year Inflation Rates: Philippines, MIMAROPA, and Romblon:
All Items (2018=100)
The headline inflation rate of Romblon accelerated to 8.1 percent in December 2023, compared to the 7.0 percent computed in the previous month. Compared to the previous year, its inflation rate was higher than the registered 3.3 percent in December 2022. Meanwhile, the year-to-date inflation rate of the province was computed at 7.2 percent.
The inflation trend in December 2023 was primarily brought by the slowing down of the year-on-year growth rate in the indices of the commodity group such as:
Food and Non-Alcoholic Beverages, 10.5% (89.5% share to inflation trend)
Housing, Water, Electricity and Other Fuels, -0.3% (1.4% share to inflation trend)
Furnishings, Household Equipment and Routine Household Maintenance, 12.4% (0.6% share to inflation trend)
Information and Communication, 0.7 percent (0.6% share to inflation trend)
Restaurant and Accommodation Services, 20.1% (3.2% share to inflation trend)
Personal Care, and Miscellaneous Goods and Services, 9.9% (4.7% share to inflation trend)
On the other hand, Alcoholic Beverages and Tobacco (21.2%), Clothing and Footwear (10.5%), Health (1.7%), Transportation (0.4%), and Recreation, Sports and Culture (9.8%) showed slower inflation rates as compared to the previous month’s rate. Meanwhile, Education Services (2.6%) and Financial Services (0.0%) remained at their previous month’s rate.
In the past 12 months, the highest inflation rate was observed in the month of September 2023 computed at 9.7 percent while the lowest was observed in January 2023 at 5.1 percent (Figure 1).
Figure 1. 1-Year Monthly Inflation Rate of Romblon: January – December 2023
Table 2 shows that the month-on-month price index for all items in the province increased by 0.9 percent (129.2 to 130.3). It also shows that Food and Non-alcoholic Beverages registered the highest increment with reference to the price situation in the previous month, increased by 1.7 percent (132.0 to 134.3). It was followed by the observed price situation of Personal Care, and Miscellaneous Goods and Services with 1.2 percent (121.2 to 122.6), Furnishing, Household Equipment and Routine Maintenance of the House with 0.4 percent (137.3 to 137.8) and Alcoholic Beverages and Tobacco with 0.3 percent (192.4 to 192.9).
On the other hand, commodity groups that showed decreased indices include Health with -0.6 percent (125.0 to 124.3), Transportation with -0.5 percent (136.7 to 136.0), and Recreation, Sports and Culture with -0.8 percent (121.6 to 120.6).
Meanwhile, there is no observed month-on-month changes in average prices of Clothing and Footwear, House, Water, Electricity and Other Fuels, Information and Communication, Education Services and Financial Services.
The average monthly CPI for all income households in the province in December 2023 was recorded at 130.3, increased by 8.1 percent from the price level on the same month of the past year (120.5).
Table 2. Consumer Price Index by Commodity Group for All Income Households (2018=100)
Meanwhile, Figure 2 shows the Consumer Price Indices of different commodity groups in December 2023. The commodity group of Alcoholic Beverages and Tobacco registered 192.9, the highest value of the CPI in the province during the period.
Purchasing Power of Peso
CPI is further used in the computation of Purchasing Power of Peso (PPP). PPP measures the “true” value of money using a given base year.
In December 2023, the PPP was calculated to have a value of P0.77 on the average, which means that P1.00 in 2018 is only worth 77 centavos. Also, on the average, an individual needs P130.30, or P30.30 more, to buy the same basket of goods that was worth P100.00 in 2018.
TECHNICAL NOTES
Consumer Price Index (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.
is widely used in the calculation of the inflation rate and purchasing power of the peso.
is used to adjust other economic series for price changes. Example, CPI components are used as deflators for most personal consumption expenditures (PCE) in the calculation of the Gross National Product (GNP).
is used as basis to adjust wages in labor management contracts as well as pensions and retirement benefits. Thus, increases in wages through collective bargaining agreements use the CPI as one of their bases.
Inflation Rate (IR)
interpreted in terms of declining purchasing power of peso.
is the annual rate of change or the year-on-year change of the CPI expressed in percent.
Inflation Rate (reference month, reference year)
= [(CPI (reference month, reference year) - CPI (reference month, previous year)) / CPI (reference month, previous year)] x 100%
Purchasing Power of Peso
shows how much the peso in the base period is worth in the current period.
computed as the reciprocal of the CPI for the period under review multiplied by 100.
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.
To determine the commodities that will form the market basket for the 2018-based 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.
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.
