BARMM Consumer Price Index (Formerly ARMM) as of 2019

March 5, 2020Special Release Ref No.: SR-BARMM-20-050

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 127.1 in 2019. The region’s CPI is the highest in the entire country during this period.

Figure 1. Consumer Price Index for All Income Households in the Philippines, by Region: 2019 and 2018
Source: Philippine Statistics Authority
Survey of Retail Prices of Commodities for the Generation of CPI
 

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 164.0, 133.7 and 125.4 in 2019. On the other hand, Communication, Transport, and Housing, Water, Electricity, Gas, and Other Fuels have the lowest CPIs of 103.2, 105.0, and 112.5, respectively.

Figure 2. Consumer Price Index for All Income Households in BARMM, by Commodity Group: 2019 and 2018
Source: Philippine Statistics Authority
Survey of Retail Prices of Commodities for the Generation of CPI
 

The Province of Sulu recorded the highest CPI in the region in 2019 at 134.6, as shown in Figure 3. This was followed by Basilan and Maguindanao with CPIs of 130.4 and 125.0, respectively. Figure 3 also shows that Lanao del Sur, Tawi-Tawi and Cotabato City have the lowest corresponding CPIs of 124.7, 124.2 and 123.5.

Figure 3. Consumer Price Index for All Income Households in BARMM, by Province: 2019 and 2018
Source: Philippine Statistics Authority
Survey of Retail Prices of Commodities for the Generation of CPI
 

Inflation Rate

Figure 4 shows that the inflation rate of BARMM decelerated to 2.6 percent in 2019 from the 7.1 percent inflation rate in 2018. This implies that the average retail prices of goods and services in the market basket in BARMM increased by 2.6 percent in 2019 compared to the prices in 2018. The inflation rate seemed to have a seasonality as it is observed in the graph.

Figure 4. Headline Inflation Rate in BARMM, All Items: 2012 – 2019
Source: Philippine Statistics Authority
Survey of Retail Prices of Commodities for the Generation of CPI
 

Commodity groups of Alcoholic Beverages and Tobacco, Restaurant and Miscellaneous Goods and Services and Health have the highest inflation rates in 2019 recorded at 7.5 percent, 7.1 percent, and 5.2 percent, respectively. On the other hand, commodity groups of Communication, Food and Non-Alcoholic Beverages and Housing, Water, Electricity, Gas and Other Fuels have the lowest corresponding inflation rates of 0.6 percent, 1.8 percent and 2.5 percent, respectively while the average prices in Education decreased by 1.2 percent (see Figure 5).

Figure 5. Headline Inflation Rate in BARMM, All Items, by Commodity Group: 2019 and 2018
Source: Philippine Statistics Authority
Survey of Retail Prices of Commodities for the Generation of CPI
 

It is shown in Figure 6 that Basilan has the highest inflation rate, that is 7.9 percent in 2019. This is followed by Tawi-Tawi and Sulu with 5.6 percent and 4.3 percent, respectively. Lanao del Sur and Cotabato City have the lowest inflation rate with 0.7 percent and 1.6 percent, respectively. On the other hand, the average prices of All Items for the Maguindanao decreased by 0.3 percent.

 

Figure 6. Year-on-Year Headline Inflation Rate in BARMM, All Items, by Province: 2019 and 2018
Source: Philippine Statistics Authority
Survey of Retail Prices of Commodities for the Generation of CPI
 

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 0.79 as of 2019. This is 1.23 percent lower than the PPP in 2018. The 0.79 PPP implies that the Php1.00 in 2012, as the base year, values only Php0.79 in 2019.

Figure 7. Purchasing Power of Peso in BARMM: as of 2019
Source: Philippine Statistics Authority

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.

Note: The dataset used in the special release is exclusive for ARMM plus Cotabato City.

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