BARMM Consumer Price Index (Formerly ARMM) as of February 2020

March 10, 2020Special Release Ref No.: SR-BARMM-20-051

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 128.5 in February 2020. The region’s CPI is the highest in the entire country during this period.

Figure 1. Monthly Consumer Price Index for All Income Households in the Philippines, by Region: February 2020 and February 2019
Source: Philippine Statistics Authority

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 174.0, 134.3 and 128.6 in February 2020. On the other hand, Communication, Transport, and Housing, Water, Electricity, Gas, and Other Fuels have the lowest CPIs of 102.7, 104.5, and 115.9, respectively.

Figure 2. Monthly Consumer Price Index for All Income Households in BARMM, by Commodity Group: February 2019 and February 2020
Source: Philippine Statistics Authority

The Province of Sulu recorded the highest CPI in the region in February 2020 at 137.8, as shown in Figure 3. This was followed by Basilan and with CPIs of 132.3 and 126.1, respectively. Figure 3 also shows that Cotabato City, Maguindanao and Tawi-Tawi have the lowest corresponding CPIs of 122.4, 124.5 and 125.9.

Figure 3. Monthly Consumer Price Index for All Income Households in BARMM, by Province: February 2020 and February 2019
Source: Philippine Statistics Authority

Inflation Rate

Figure 4 shows that the inflation rate of BARMM decelerated to 2.1 percent in February 2020 from the 1.0 percent inflation rate in January 2020. This implies that the average retail prices of goods and services in the market basket in BARMM increased by 2.1 percent in February 2020 compared to the prices in February 2019.

Figure 4. Year-on-Year Headline Inflation Rate in BARMM, All Items: February 2019 – February 2020
Source: Philippine Statistics Authority

Commodity groups of Alcoholic beverages and Tobacco, Housing, water, Electricity, Gas and other and Miscellaneous Goods and Services have the highest inflation rates in February 2020 recorded at 7.1 percent, 4.7 percent, and 4.4 percent, respectively. On the other hand, commodity groups of Food and NonAlcoholic Beverages, Education and Furnishing, Household Equipment and Routine Maintenance of the House have the lowest corresponding inflation rates of 1.0 percent, 1.8 percent, and 2.5 percent; while the average prices in Communication decreased by 0.5 percent in February 2020 (see Figure 5).

Figure 5. Year-on-Year Headline Inflation Rate in BARMM, All Items, by Commodity Group: February 2020 and February 2019
Source: Philippine Statistics Authority

It is shown in Figure 6 that Sulu has the highest inflation rate which is 4.6 percent in February 2020. This is followed by Lanao del Sur and Basilan with both 2.4 percent. Tawi-Tawi has the least inflation rate with 1.8 percent. On the other hand, the average prices of All Items for the provinces of Maguindanao and Cotabato City decreased by 0.2 percent and 0.4 percent, respectively.

Figure 6. Year-on-Year Headline Inflation Rate in BARMM, All Items, by Province: February 2020 and February 2019
Source: Philippine Statistics Authority

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 February 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 February 2020.

Figure 7. Purchasing Power of Peso in BARMM: as of February 2020
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