ARMM Consumer Price Index (As of August 2018)

September 13, 2018Special Release Ref No.: 2018-036

Survey of Retail Prices of Commodities conducted by the Philippine Statistics Authority (PSA) has generated a Consumer Price Index (CPI) of 125.4 as of August 2018, using 2012 as the base year. This implies that the cost of a basket of goods and services commonly purchased by a typical Filipino household in ARMM was at an average of Php125.4 as of August 2018. This is 0.7 percent higher than the July 2018 with CPI = 124.5.

Table 1. Monthly Consumer Price Index for All Income Households in ARMM, by Commodity Group: August and July 2018 and 2017 (2012 = 100)
Commodity Group August 2018 August 2017 July 2018 July 2017
All Items 125.4 116.0 124.5 115.8
Food and Non-Alcoholic Beverages 132.8 121.6 131.9 121.4
Alcoholic Beverages and Tobacco 157.5 135.3 156.9 134.6
Clothing and Footwear 118.2 111.4 116.5 111.1
Housing, Water, Electricity, Gas, and Other Fuels 110.8 105.9 110.3 105.6
Furnishing, Household Equipment and Routine Maintenance of the House 117.5 110.7 117.3 110.4
Health 112.5 107.3 112.2 107.0
Transport 103.6 96.4 104.2 96.4
Communication 103.5 100.6 103.2 100.5
Recreation and Culture 116.3 110.0 115.7 109.7
Education 116.9 121.9 116.9 121.9
Restaurant and Miscellaneous Goods and Services 119.8 110.3 116.4 109.9
Source of Basic Data: Philippine Statistics Authority, Survey of Retail Prices of Commodities for the Generation of CPI

Commodities under the groups of Alcoholic Beverages and Tobacco and Food and Non-Alcoholic Beverages had the highest corresponding CPIs of 157.5 and 132.8 in August 2018, respectively. These two commodity groups have CPIs higher than the total average CPI of all items in the region.

On the other hand, Communication with CPI 103.5 have the lowest CPI during the same period.

Figure 1. Consumer Price Index in ARMM, All Items, by Commodity Group: as of August 2018 (2012 = 100)
Source of Basic Data: Philippine Statistics Authority, Survey of Retail Prices of Commodities for the Generation of CPI

Inflation Rate

The year-on-year headline inflation rate in ARMM is at 8.1 percent as of August 2018 (2012=100). This implies that the prices of commodities and prices in the region on the average increased by 8.1 percent compared to the same period in the previous year.

Commodity groups of Alcoholic Beverages and Tobacco, Food and Non-Alcoholic Beverages and Restaurant and Miscellaneous Goods and Services, have shown the most volatile annual prices in August 2018 with the inflation rates of 16.4 percent, 9.2 percent and 8.6 percent, respectively. These three commodity groups have inflation rates higher than the total average inflation rate of all items in the region. On the other hand, the Restaurant and Miscellaneous Goods and Services and Clothing and Footwear have the most rapidly changing average prices between August 2018 and July 2018 with an increase of 45.76 percent and 24.49 percent, respectively.

Figure 2. Year-on-Year Headline Inflation Rate in ARMM, All Items: January 2018 – August 2018 (2012 = 100)
Source of Basic Data: Philippine Statistics Authority, Survey of Retail Prices of Commodities for the Generation of CPI
 
Table 2. Year-on-Year Headline Inflation Rate in ARMM, All Items by Commodity Group: August 2018 – July 2018 (2012 = 100)
Commodity Group August 2018 July 2018
All Items 8.1 7.5
Food and Non-Alcoholic Beverages 9.2 8.6
Alcoholic Beverages and Tobacco 16.4 16.6
Clothing and Footwear 6.1 4.9
Housing, Water, Electricity, Gas, and Other Fuels 4.6 4.5
Furnishing, Household Equipment and Routine Maintenance of the House 6.1 6.3
Health 4.8 4.9
Transport 7.5 8.1
Communication 2.9 2.7
Recreation and Culture 5.7 5.5
Education -4.1 -4.1
Restaurant and Miscellaneous Goods and Services 8.6 5.9
Source of Basic Data: Philippine Statistics Authority, Survey of Retail Prices of Commodities for the Generation of CPI

Purchasing Power of Peso

PesoPurchasing Power of Peso (PPP) is inversely related to inflation rate. Thus, as the inflation rate increases, PPP declines. In ARMM, PPP decreased by 3.4 percent in 2017 and has been decreasing at an average rate of 2.97 percent annually between 2012 and 2017.

The PPP in 2017 is 0.86. This implies that the Php1.0 in 2012, as the base year, values only Php 0.86 in 2017.

Figure 3. Purchasing Power of Peso in ARMM: 2012 – 2017 (2012 = 100)
Source of Basic Data: Philippine Statistics Authority, Survey of Retail Prices of Commodities for the Generation of CPI
Technical Notes
 
Consumer Price Index (CPI)
The CPI is an indicator of the changes in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
 
Uses of CPI
The CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is a major statistical series used for economic analysis and as a monitoring indicator of government economic policy.
 
Computation of CPI
The computation of the CPI involves consideration of the following important points: 
 
a. Base Period
The reference date or base period is the benchmark or reference date or period at which the index is taken as equal to 100.
 
b. Market Basket
A sample of the thousands of varieties of goods purchased for consumption and services availed by the households in the country selected to represent the composite price behavior of all goods and services purchased by consumers.
 
c. Weighting System
The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure.
 
d. Formula
The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2006) weights.
 
e. Geographic Coverage
CPI values are computed at the national, regional, and provincial levels, and for selected cities. 
 
Inflation Rate is the rate of change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of peso.
 
Headline Inflation refers to the rate of change in the CPI, a measure of the average standard “basket” of goods and services consumed by a typical family.
 
Purchasing Power of 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.

 

(Sgd) HJI. RAZULDEN A. MANGELEN, MPA, MDM
(Chief Statistical Specialist)
Officer-in-Charge
RSSO-ARMM