BARMM Consumer Price Index (Formerly ARMM) as of January 2020
Consumer Price Index
The Consumer Price Index (CPI) is an indicator of the changes in the average retail prices of fixed basket of goods and services commonly purchased by households relative to a base year. BARMM recorded a CPI of 127.9 in January 2020. The region’s CPI is the highest in the entire country during this period.
Figure 2 shows that commodity groups of Alcoholic Beverages and Tobacco, Food and Non-Alcoholic Beverages, and Restaurant and Miscellaneous Goods and Services have the highest corresponding CPIs of 172.1, 134.0 and 128.5 in January 2020. On the other hand, Communication, Transport, and Housing, Water, Electricity, Gas, and Other Fuels have the lowest CPIs of 102.7, 108.9, and 115.8, respectively.
The Province of Sulu recorded the highest CPI in the region in January 2020 at 138.1, as shown in Figure 3. This was followed by Basilan and with CPIs of 132.2 and 126.1, respectively. Figure 3 also shows that Cotabato City, Maguindanao and Tawi-Tawi have the lowest corresponding CPIs of 121.8, 124.4 and 125.9.
Figure 4 shows that the inflation rate of BARMM decelerated to 1.0 percent in January 2020 from the 0.8 percent inflation rate in January 2019. This implies that the average retail prices of goods and services in the market basket in BARMM increased by 1.0 percent in January 2020 compared to the prices in January 2019.
Commodity groups of Transport, Health and Restaurant and Miscellaneous Goods and Services have the highest inflation rates in January 2020 recorded at 8.5 percent, 6.2 percent, and 4.7 percent, respectively. On the other hand, commodity groups of Education, Recreation and Culture and Furnishing, Household Equipment, and Routine Maintenance of the House have the lowest corresponding inflation rates of 1.0 percent, 1.8 percent, and 2.6 percent; while the average prices in Communication and Food and Non-Alcoholic Beverages decreased by 1.0 percent and 1.0 percent in January 2020 (see Figure 5).
It is shown in Figure 6 that Basilan has the highest inflation rate 2.5 percent in January 2020. This is followed by Tawi-Tawi and Lanao del Sur with 2.2 percent and 2.2 percent, respectively. On the other hand, the average prices of All Items for the provinces of Cotabato City, Maguindanao and Sulu decreased by 0.2 percent, 0.6 percent and 0.4 percent, respectively.
Purchasing Power of Peso
Purchasing Power of Peso (PPP) is inversely related to inflation rate. Thus, as the inflation rate increases, PPP declines, as shown in Figure 7. In BARMM, PPP is at 0.78 as of January 2020. This is 1.27 percent lower than the PPP in January 2020. The 0.78 PPP implies that the Php1.00 in 2012, as the base year, values only Php0.78 in January 2020.
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 PeriodThe 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.
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.
Note: The dataset used in the special release is exclusive for ARMM plus Cotabato City.