BARMM Summary Inflation Report for January 2023
INFLATION RATES FOR ALL ITEMS
The headline inflation in BARMM increased further to 7.8 percent in January 2023, from 6.3 percent in December 2022. Inflation in January 2022 was lower at 1.9 percent. It is shown in Table 1 that in January 2023, Basilan had the highest inflation rate among BARMM provinces, including HUC, with 11.7 percent. Other provinces with higher inflation rates compared to previous month are the following: Lanao del Sur at 9.5 percent, Tawi-Tawi at 9.9 percent, Maguindanao at 6.6 percent and Cotabato City at 5.6 percent. On the other hand, Sulu posted a slower movement of prices at 4.0 percent from 5.4 percent in December 2022.
The increase in the region’s inflation was mainly brought about by the higher annual increase in the index for Restaurant and Accommodation Services at 12.0 percent, Food and Non-Alcoholic Beverages at 9.6 percent, and Alcoholic Beverages and Tobacco at 6.9 percent (see Table 2). 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:
Meanwhile, annual upticks slowed down in the indices of Transport at 3.1 percent and Health at 1.2 percent.
On the other hand, the commodity groups of Education Services, and Financial Services retained their previous month’s inflation rate at 3.7 and 0.0 percent, respectively.
INFLATION RATES FOR FOOD ITEMS
For food index, it increased further by 9.6 percent in January 2023, from 8.6 percent in the previous month. In January 222, food index was lower by 1.1 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 44.0 percent, Vegetables, Tubers, Cooking Bananas and Pulses at 25.4 percent, and Oils and Fats at 14.0 percent (see Table 3). 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:
- Corn, 11.0 percent
- Flour, Bread and Other Bakery Products, Pasta Products, and Other Cereals, 9.6 percent
- Milk, Other Dairy Products and Eggs, 6.4 percent
Meanwhile, inflation rates in other food commodities had decreased. These are:
- Meat and Other Parts of Slaughtered Land Animals, 6.4 percent
- Fish and Other Seafood, 5.7 percent
- Fruits and Nuts, 4.5 percent
- Rice, 3.8 percent
- Ready-made Food and Other Food Products N.E.C.,1.8 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 2. In BARMM, PPP is at PhP 0.84 as of January 2023.
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 (2018) 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.