BARMM Consumer Price Index in July 2022
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 113.0 in July 2022. The region’s CPI is the third lowest in the entire country during this period.
Figure 2 shows that commodity groups of (1)Financial Services, (2)Alcoholic Beverages and Tobacco, and (3)Transport have the highest corresponding CPIs of 163.6, 139.6 and 129.0 in July 2022. On the other hand, (1)Information and Communication, (2)Education Services and (3)Recreation, Sports and Culture have the lowest CPIs of 101.1, 107.9 and 111.3, respectively.
Among the provinces in BARMM, Tawi-Tawi recorded the highest CPI in July 2022 at 119.9, as shown in Figure 3. This is followed by Basilan and Lanao del Sur with CPIs of 118.4 and 115.2, respectively. Cotabato City has the lowest CPIs among the provinces with 107.9.
Figure 4 shows that the inflation rate of BARMM increased from 3.1 percent in June 2022 to 3.6 percent in July 2022. This implies that the average retail prices of goods and services in the market basket in BARMM increased by 3.6 percent in July 2022 compared to the prices in July 2021.
Commodity groups of (1)Transport, (2)Housing, Water, Electricity, Gas and Other Fuels and (3)Restaurant and Accommodation Services have the highest inflation rates in July 2022 recorded at 14.9 percent, 3.5 percent and 3.4 percent, respectively. On the other hand, commodity groups of (1)Financial Services and (2)Information and Communication have the lowest corresponding inflation rates of 0.0 percent and 0.3 percent, respectively. (see Figure 5).
It is shown in Figure 6 that Lanao del Sur has the highest inflation rate among BARMM provinces with 9.0 percent in July 2022. This is followed by Tawi-Tawi, Cotabato City, Maguindanao and Basilan with 4.2 percent, 3.4 percent, 3.4 percent and 1.6 percent, respectively. On the other hand, Sulu have a deflation rate of 2.1 percent in the said month.
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 0.88 as of July 2022. This is 1.1 percent lower than the PPP in July 2021.
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.