BARMM Consumer Price Index (Formerly ARMM) as of October 2019
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 127.6 in October 2019. 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 165.4, 133.6 and 128.0 in October 2019. On the other hand, Communication, Transport, and Housing, Water, Electricity, Gas, and Other Fuels have the lowest CPIs of 103.3, 105.4, and 113.5, respectively.
The Province of Sulu recorded the highest CPI in the region in October 2019 at 137.4, as shown in Figure 3. This was followed by Basilan and Lanao del Sur with CPIs of 131.2 and 125.6, respectively. Figure 3 also shows that Tawi-Tawi, Maguindanao and Cotabato City have the lowest corresponding CPIs of 123.6, 123.5 and 123.3
Figure 4 shows that the inflation rate of BARMM decelerated to 1.0 percent in October 2019 from the 8.3 percent inflation rate in October 2018. This implies that the average retail prices of goods and services in the market basket in BARMM increased by 1.0 percent in October 2019 compared to the prices in October 2018.
Commodity groups of Transport, Restaurant and Miscellaneous Goods and Services and Health have the highest inflation rates in October 2019 recorded at 5.8 percent, 5.6 percent, and 4.4 percent, respectively. On the other hand, commodity groups of Housing, Water, Electricity, Gas and Other Fuels, Education, Recreation and Culture and Furnishing, Household Equipment, and Routine Maintenance of the House have the lowest corresponding inflation rates of 1.2 percent, 1.8 percent, 2.7 percent and 2.7 percent, respectively while the average prices in Communication and Food and Non-Alcoholic Beverages decreased by 0.2 percent and 0.3 percent in October 2019 (see Figure 5).
It is shown in Figure 6 that Basilan has the highest inflation rate 6.1 percent in October 2019. This is followed by Sulu and Tawi-Tawi with both 2.3 percent inflation rates. Cotabato City and Lanao del Sur has the lowest inflation rate with 0.2 percent and 1.0 percent, respectively. On the other hand, the average prices of All Items for the province of Maguindanao decreased by 2.9 percent.
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 October 2019. This is 1.28 percent lower than the PPP in October 2018. The 0.78 PPP implies that the Php1.00 in 2012, as the base year, values only Php0.78 in October 2019.
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.
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