The Consumer Price Index (CPI) in Northern Mindanao for the month of August 2020 registered at 128.0 which implies that the price of a basket of goods in August 2020 was 28.0 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 shows the CPI for Northern Mindanao for July to August 2019 and 2020.
Among the commodity groups, Alcoholic Beverages and Tobacco posted the highest CPI in August 2020 at 238.1, followed by Housing, Water, Electricity, Gas, and Other Fuels at 143.4, and Health at 134.4. On the other hand, Recreation and Culture at 113.9, Transport at 110.7 and Communication at 106.3 were the three commodity groups with the lowest CPI recorded in the month of August 2020. (See Figure 2)
Table 1 presents the CPI for all commodity groups in Northern Mindanao by province for the month of August 2019 and August 2020. All provinces demonstrated an increase in CPI for August 2020 with Misamis Occidental posting the highest CPI at 129.8 and Camiguin posting the lowest at 125.1.
Table 1. Consumer Price Index for All Commodity Groups by Province, Northern Mindanao: August, 2020 and 2019 (2012=100)
Regional inflation takes a slower pace in August 2020
Inflation rate in the region registered at 2.2 percent, slower than the recorded inflation in the previous year. This means that prices of goods in August this year increased at a slower pace than the recorded rate of increase in August 2019.
Among the provinces, Bukidnon posted the highest inflation rate at 3.5 percent, followed by Camiguin at 3.0 percent. (See Table 2)
Table 2. Year-on-Year Inflation Rates for All Items by Province, Northern Mindanao: August, 2020 and 2019 (2012=100)
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 0.78 in August 2020. This means that a consumer’s PhP 100 in 2012 can only purchase PhP 78 worth of goods and services in August 2020.
All provinces showed a lower PPP in August 2020 compared to August 2019. Bukidnon posted the highest decline of 0.03 pesos, followed by Camiguin which declined by 0.02 pesos. The PPP of Misamis Occidental, Misamis Oriental and Lanao del Norte also declined by 0.01 pesos in August 2020.
RUBEN D. ABARO, JR., CESE
Regional Director
SSB/BMC/JVTS
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.
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.
