INFLATION RATES FOR ALL ITEMS

Table 1. Year-on-Year Inflation Rates for All Items, BARMM: February 2023, January 2022, and February 2022 (In percent, 2018=100)

Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, Philippine Statistics Authority

The headline inflation in BARMM decelerated to 7.5 percent in February 2023, from 7.8 percent in January 2023. Inflation in February 2022 was lower at 1.6 percent. It is shown in Table 1 that in February 2023, Tawi-Tawi had the highest inflation rate among BARMM provinces, including HUC, with 10.9 percent. Other province/city with higher inflation rates compared to previous month is Cotabato City at 6.6 percent. Meanwhile, the following provinces posted a slower movement of prices: Basilan at 9.5 percent, Lanao del Sur at 9.4 percent, and Maguindanao at 6.4 percent. On the other hand, Sulu retained their previous’ month inflation rate at 4.0 percent. 

Figure 1. Headline Inflation Rates for All Items, BARMM: February 2022 to February 2023 (In percent, 2018=100)

Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, Philippine Statistics Authority

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 12.3 percent, Housing, Water, Electricity, Gas and Other Fuels at 4.7 percent, and Recreation, Sport and Culture at 3.9 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 Food and Non-Alcoholic Beverages at 9.1 percent and Transport at 3.0 percent

On the other hand, the following commodity groups retained their previous month’s inflation rate. These are:

Table 2. Inflation Rates by Commodity Group for All Income Households, BARMM: February 2023, January 2023, and February 2022 (In percent, 2018=100)

Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, Philippine Statistics Authority

INFLATION RATES FOR FOOD ITEMS

For food index, it increased further by 9.2 percent in February 2023, from 9.6 percent in the previous month. In February 2022, food index was lower by 0.4 percent.

The increase in the region’s food inflation was mainly brought about by the higher annual increase in the index for Corn at 11.1 percent, Flour, Bread and Other Bakery Products, Pasta Products, and Other Cereals at 9.7 percent, and Meat and Other Parts of Slaughtered Land Animals at 8.4 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:

Meanwhile, inflation rates in other food commodities had decreased. These are as follows:

1. Sugar, Confectionery and Desserts, 43.4 percent
2. Vegetables, Tubers, Cooking Bananas and Pulses, 21.5 percent
3. Oils and Fats, 13.8 percent
4. Fish and Other Seafood, 5.1 percent
5. Fruits and Nuts, 4.4 percent; and
6. Rice, 3.4 percent.

Table 3. Inflation Rate by Commodity Group for Food, BARMM: February 2023, January 2022, and February 2022 (In percent, 2018=100)

Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, 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 2. In BARMM, PPP is at PhP 0.84 as of February 2023. 

Figure 2. Purchasing Power of Peso in BARMM, February 2022 to January 2023 (In peso, 2018=100)

Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, 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 (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.