Lanao del Norte’s Consumer Price Index posted at 113.1 for the month of May which implies that the price of one basket of goods was 13.1 higher than the price of goods in the year 2018.
Consumer Price Index (CPI) is used as an indicator to measure the changes in the average retail prices of one basket of goods and services over time that consumers commonly pay. Figure 1 shows the Consumer Price Index in the province for the period of May 2021 & 2022 with 2018 as the base year.
Among the commodity groups, Financial Services registered the highest CPI in May 2022 at 146.0 followed by Transport at 138.8, and Alcoholic Beverages and Tobacco at 136.7. On the other hand, Food and Non-Alcoholic Beverages at 107.5, Education Services at 106.0, and Information and Communication at 100.9 were the bottom three with the lowest CPI posted in the month of May 2022 as shown in figure 2.
Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, Philippine Statistics Authority
INFLATION RATE
The inflation rate refers to the percent change in the average prices of goods and services that most cases purchased by consumers compared to prices a year ago. Figure 3 below displays the Inflation rate for all items in the province between May 2021 and May 2022. The inflation rate of the province of Lanao del Norte is at 2.7 percent, lower than its average retail price in May 2021 which is 6.0 percent. Also, the descending trend line is evident in figure 3 which shows that the inflation rate in all items in Lanao del Norte is decreased throughout the year.
Inflation occurs mostly when goods and services are in high demand giving a rise to a drop-in availability in the market. This may be caused by any reason like natural phenomena and/or man-made calamities.
PURCHASING POWER OF PESO (PPP)
The Purchasing Power of Peso (PPP) shows how much the currency of peso is worth in the current period based on the year 2018. The PPP in the province of Lanao del Norte is at P0.88 for the month of May 2022. This value means that the goods and services that are worth one peso (P1.00) in the year 2018, the current value of it decreases to eighty-eight centavos (P0.88).
Figure 4 below shows the year-on-year purchasing power of peso of the province between May 2021 and 2022.
The province of Lanao del Norte had remained its purchasing power of peso declining at 0.88 centavos for the month of May 2022. This also implies that the consumers in the province had to increase their usual costs in order to attain the same quality of living in the year 2018.
Purchasing power has a great impact on different aspects of the economy. A massive decrease in purchasing power caused by excessive inflation may lead to an economic crisis.
OSLER M. MEJARES
Chief Statistical Specialist
PSA Lanao del Norte