Tawi-Tawi Summary Inflation Report for August 2022
INFLATION RATES FOR ALL ITEMS
The headline inflation in Tawi-tawi increased further to 6.3 percent in August 2022, from 4.2 percent in July 2022. This is the highest recorded inflation since January 2022. Inflation in August in August 2021 was lower at -0.8 percent. The average inflation for the first eight months of the year stood at 2.0 percent. Tawi-tawi got the highest inflation for the entire Region of BARMM comparing to other provinces and the City of Cotabato.
The increase in the province of Tawi-tawi’s inflation was mainly brought about by the higher annual increase in the index for Transport at 8.5 percent, Restaurants and Accommodation Services at 29.9 percent, Food and Non-Alcoholic Beverages at 8.1 percent and Information and Communication at 4.2 percent. Also contributing to the uptrend in the overall inflation during the period were the higher annual increment in the indices of Health at 1.4 percent.
On the other hand, the commodity group of Clothing and Footwear, Housing, Water, Electricity, Gas and Other Fuels, Recreation, Sports and Culture, Education Services, Financial Services and Personal Care, Miscellaneous Goods and Services retained their previous month’s inflation rate.
The commodity group of Alcoholic Beverages and Tobacco and Furnishing, Household Equipment and Routine Maintenance of the House decreased their inflation rate to 0.8 percent and 1.6 percent, respectively. They are the only two commodities that got lower rate compare to previous year.
INFLATION RATES FOR FOOD ITEMS
For food index, it increased further by 8.0 percent in August 2022, from 6.8 percent in the previous month. In August 2021, food index was lower at -2.6 percent.
The increase in the region’s food inflation was mainly brought about by the higher annual increase in the index for Sugar, Confectionery and Desserts at 31.7 percent, Vegetables, Tubers, Cooking Bananas and Pulses at 16.2 percent and Fish and Other Seafood at 6.5 percent. Also contributing to the uptrend in the overall inflation during the period were the higher annual increments in the indices of the following commodity groups as compared with their previous month’s inflation rates:
- Milk, Other Dairy Products, and Eggs, 7.1 percent
- Ready-Made Food and Other Food Products N.E.C, 5.9 percent
- Fruits and Nuts, 5.4 percent
- Flour, Bread and Other Bakery Products, Pasta Products and Other Cereals, 1.6 percent
- Corn, 1.5 percent
On the other hand, Cereals¸Rice, Meat and Other Parts of Slaughtered Land Animals and Oils and Fats slowed down their annual increase and was lower compare its previous months’ inflation rate.
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 2. In Tawi-tawi, PPP is at 0.82 as of August 2022. This is the lowest purchasing power of peso recorded since January 2022.
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.