BARMM Summary Inflation Report for March 2023
INFLATION RATES FOR ALL ITEMS
The headline inflation in BARMM accelerated to 7.8 percent in March 2023, from 7.5 percent in February 2023. Inflation in March 2022 was lower at 1.5 percent. It is shown in Table 1 that in March 2023, Tawi-Tawi had the highest inflation rate among BARMM provinces, including HUC, with 11.7 percent. Other province/city with higher inflation rates compared to previous month is Sulu at 8.4 percent. Meanwhile, the following provinces posted a slower movement of prices: Lanao del Sur at 7.2 percent, and Cotabato City at 5.5 percent. On the other hand, Basilan and Maguindanao retained their previous’ month inflation rate at 9.5 percent and 6.4 percent, respectively.
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 13.6 percent, Food and Non-Alcoholic Beverages at 10.2 percent, and Alcoholic Beverages and Tobacco at 7.1 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 the following commodity groups:
On the other hand, the following commodity groups retained their previous month’s inflation rate. These are:
INFLATION RATES FOR FOOD ITEMS
For food index, it increased further by 10.2 percent in March 2023, from 9.1 percent in the previous month. In March 2022, food index was lower by 0.1 percent.
The increase in the region’s food inflation was mainly brought about by the higher annual increase in the index for Fish and Other Seafood at 12.3 percent, Meat and Other Parts of Slaughtered Land Animals at 10.6 percent, Milk, Other Dairy Products and Eggs at 8.6 percent, and Ready-made Food and Other Food Products N.E.C at 2.1 percent (see Table 3).
Meanwhile, inflation rates in other food commodities had decreased. These are as follows:
- Sugar, Confectionery and Desserts, 42.3 percent
- Vegetables, Tubers, Cooking Bananas and Pulses, 21.0 percent
- Oils and Fats, 10.7 percent
- Flour, Bread and Other Bakery Products, Pasta Products, and Other Cereals, 9.6 percent
- Corn, 8.1 percent
- Fruits and Nuts, 3.8 percent; and
- Rice, 2.4 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 0.83 as of March 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.