The Consumer Price Index (CPI) in Northern Mindanao for the month of August 2021 registered at 133.0 which implies that the price of a basket of goods in August 2021 was 33.0 percent higher than its price in 2012. The CPI is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year. (Figure 1)
Among the commodity groups, Alcoholic Beverages and Tobacco posted the highest CPI in August 2021 at 262.2, followed by Housing, Water, Electricity, Gas, and Other Fuels at 146.2, and Restaurant and Miscellaneous Goods and Services at 135.2. On the other hand, Transport at 117.2, Recreation and Culture at 115.0, and Communication at 106.7 were the three commodity groups with the lowest CPI recorded in the month of August 2021. (Figure 2)
All provinces demonstrated an increase in CPI for August 2021 as compared to the same month in 2020 with Misamis Occidental posting the highest CPI at 136.7 and Camiguin posting the lowest at 131.2. (Table 1)
August 2021 Regional Inflation Accelerates Year-on-Year
Regional inflation in August 2021 inched up to 3.9 percent from 3.8 percent in July 2021. Likewise, the year-on-year regional inflation accelerated from 2.2 percent in August 2020. The prices of goods and services in August 2021 increased at a faster pace than the recorded rate of increases in the previous month and in August 2020. (Figure 3)
Among the provinces, Misamis Occidental posted the highest inflation rate at 5.3 percent, while Bukidnon posted the lowest at 2.9 percent. (Table 2)
Purchasing Power of Peso (PPP)
The Purchasing Power of Peso (PPP) shows the real value of the peso relative to the base period. The PPP in Northern Mindanao dropped to PhP 0.75 in August 2021 from PhP 0.78 in August 2020. This means that a consumer’s PhP 100 in 2012 can only purchase PhP 75.0 worth of goods and services in August 2021.
All provinces showed a lower PPP in August 2021 compared to August 2020. Bukidnon registered the lowest decline of PhP 0.02 while Camiguin and Misamis Occidental registered the highest decline of PhP 0.04. (Figure 4)
(Sgd.)JANITH C. AVES, CE, DM
(Chief Statistical Specialist)
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.
Used of CPI – 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 data or base period is the benchmark or reference date or period at which the index is taken as equal to100.
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. Weighing System – The weighing 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 (2012) weights.
e. Geographic Coverage – CPI values are computed at the national, regional, and provincial levels, and for selected cities.
Inflation Rate (IR) – is the rate of change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of peso.
Purchasing Power of Peso (PPP) – 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.