NEDA Regional Office VIII, Government Center, 6501 Palo, Leyte, Philippines. Tel Nos. (63) (53) 323-3093 & 323-3095. Fax No. 323-3093. E-mail: neda8@evis.net.ph


CONSUMER PRICE INDEX/INFLATION RATE



The National Statistics Office (NSO) and the Bureau of Agricultural Statistics (BAS) of the Department of Agriculture collect price data for the computation of the Consumer Price Index (CPI). BAS is responsible for collecting price data for agricultural commodities in Metro Manila and selected areas while NSO collects price data for non-agricultural commodities throughout the country and all commodities in areas not covered by BAS. The computation of CPI, however, is the sole responsibility of NSO.

The survey of retail prices is undertaken simultaneously in all provincial capitals or cities where the NSO provincial offices are located and in about 600 municipalities with NSO District Offices. Two price quotations are collected twice a month, i.e. during the first five days and the middle of the month in provincial capitals and four price quotations in municipalities outside the capital during the first five days of the month.

Definition of terms

Consumer Price Index (CPI) - is a measure of change in the average retail prices of goods and services commonly purchased by a particular group of people in a particular area.

Market Basket - refers to sample of goods and services used to represent all goods and services bought by a particular group of consumers in a particular area.

Base Period - is a reference period (usually a year) of the index number. It is the period at which the index is set to 100.

Inflation Rate - is the annual rate of change or year-on-year change in CPI. It is the general rise in prices over a specified period. It indicates how fast or how slow price changes over time periods.

Purchasing Power of the Peso (PPP) - shows how much the peso in the base period is worth in another period. It gives an indication of the real value of the peso in a given period relative to the peso value in the base period. It is computed as the reciprocal of the CPI multiplied by 100.
PPP= (1/CPI all items )* 100.


Table 1. Inflation Rates
Region VIII, by Month, 2003 & 2004
(1994=100)

MONTH

2003
2004
2005
2006
January
1.7
2.2
7.2
6.5
February
1.8
3.0
6.7
7.4
March
2.0
3.0
7.0
7.1
April
2.0
3.0
7.3
6.6
May
2.9
2.7
7.3
6.4
June
2.9
3.9
6.5
6.4
July
2.3
5.1
5.5
6.5
August
2.3
5.5
5.9
6.3
September
2.3
6.4
5.4
  
October
2.1
6.8
5.4
  
November
1.8
7.2
6.2
  
December
1.6
7.4
6.2
  
Annual
2.2
4.7
6.4
  


Table 2. Inflation Rate
Region VIII, by Year by Commodity Group

COMMODITY GROUP
2000
2001
2002
2003
All Items
4.2
6.2
2.8
2.2
Food
2.3
5.7
2.3
0.9
Beverages
2.0
3.9
2.1
1.6
Tobacco
0.9
5.9
2.8
1.0
Clothing
4.6
3.5
0.9
1.1
Housing and repairs
8.7
6.0
5.5
4.6
Fuel, light & water
7.6
7.8
1.9
7.2
Services
10.3
11.0
4.5
3.8
Miscellaneous
4.2
6.1
2.4
2.1

Table 3. Consumer Price Index (CPI)
Region VIII, by Year by Commodity Group

COMMODITY GROUP
1999
2000
2001
2002
2003
All Items
149.2
155.5
165.1
169.8
173.5
Food
142.7
146.0
154.3
157.8
159.2
Beverages
137.0
139.8
145.3
148.4
150.7
Tobacco
125.1
126.2
133.7
137.5
138.9
Clothing
139.9
146.3
151.4
152.7
154.4
Housing and repairs
247.4
268.9
284.9
300.5
314.3
Fuel, light & water
129.1
138.9
149.7
152.6
163.7
Services
151.5
167.1
184.4
193.7
201.1
Miscellaneous
122.5
127.7
135.5
138.7
141.6





Table 4a. Inflation Rate, Region VIII by Province: 1994-2002 (1994=100)

 
1994
1995
1996
1997
1998
1999
2000
2001
2002
Region 8 8.3 11.1 13.1 1.4 8.3 8.1 4.2 6.2 2.8
Leyte 8.0 13.9 15.1 0.2 7.2 9.4 5.6 6.8 3.3
Southern Leyte 7.9 6.0 11.6 3.6 12.6 4.0 2.4 8.2 4.2
Samar 11.4 9.4 8.0 4.4 10.5 6.3 2.5 3.4 1.6
Eastern Samar 7.5 9.6 14.1 2.7 9.3 11.9 4.5 5.5 0.9
Northern Samar 8.0 8.3 11.0 0.1 6.4 5.5 0.9 6.1 3.5



Table 4b. Consumer Price Index, Region VIII by Province: 1994-2002 (1994=100)

 
1994
1995
1996
1997
1998
1999
2000
2001
2002
Region 8 100.0 111.1 125.6 127.4 138.0 149.2 155.5 165.1 169.8
Leyte 100.0 113.9 131.1 131.4 140.8 154.0 162.7 173.8 179.5
Southern Leyte 100.0 106.0 118.3 122.5 137.9 143.4 146.9 159.0 165.7
Samar 100.0 109.4 118.1 123.3 136.3 144.9 148.5 153.6 156.1
Eastern Samar 100.0 109.6 125.1 128.5 140.5 157.2 164.3 173.3 174.8
Northern Samar 100.0 108.3 120.2 120.3 128.0 135.0 136.2 144.5 149.5



Table 4c. Purchasing Power of Peso, Region VIII by Province: 1994-2002 (1994=100)

 
1994
1995
1996
1997
1998
1999
2000
2001
2002
Region 8 100.0 0.90 0.80 0.78 0.72 0.67 0.64 0.61 0.59
Leyte 100.0 0.88 0.76 0.76 0.71 0.65 0.61 0.58 0.56
Southern Leyte 100.0 0.94 0.85 0.82 0.73 0.70 0.68 0.63 0.60
Samar 100.0 0.91 0.85 0.81 0.73 0.69 0.67 0.65 0.64
Eastern Samar 100.0 0.91 0.80 0.78 0.71 0.64 0.61 0.58 0.57
Northern Samar 100.0 0.92 0.83 0.83 0.78 0.74 0.73 0.69 0.67


ANALYSIS (Tables 4a to 4c):

On Inflation Rate. For the past nine years, Eastern Visayas and its provinces showed erratic cycle on its inflation rate since 1994. It was in 1996 that the region posted the highest inflation rate, 13.1 percent. However, drastic improvement was observed the following year as the rate suddenly went down to 1.4%.

Contrary to common knowledge, low inflation does not connote that prices of commodities are falling. Rather, it means that prices continue to increase but at a slower rate.

On CPI. The current CPI series uses 1994 as the base year. The year 1994 was chosen by the Inter-agency Committee on Price Statistics being perceived to be the year when the country was politically, economically and socially stable. It was the time when the country was slowly recovering from the economic crisis of 1990 and 1991 and the Philippines was recognized as an emerging tiger.

Data shows a sustained increase in CPI since 1994 up to the present. In 2002, the index is pegged at 169.8. This implies that the average level of prices in 2002 is higher by 69.8 percent as compared to the prices in 1994. Leyte reported high CPI levels over the other provinces except in 1999 and 2000. Northern Samar registered low CPI levels except in 1996.

On the Purchasing Power of the Peso (PPP).

The PPP gives an indication of the real value of peso (how much it is worth) in a given period relative to its value in a base period. Increases in the CPI means contraction of the PPP. The data reflects a declining value of the peso from the base period. For Region VIII, the one peso in 1994 has depreciated by almost half in 2002. It is only now worth 59 centavos. Since Northern Samar reported low CPI levels, this province recorded high peso value compared with the other provinces.

Source of Data and Analysis: National Statistics Office