The Consumer Price Index in Northern Mindanao for the month of January posted at 126.6 which imply that the price of one basket of goods was 26.6 higher than the price of goods in year 2012. 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 that commonly purchased by a particular group of people. Figure 1 shows the Consumer Price Index in the region for the period of January 2019 & 2020 with 2012 as the base year.
Among the commodity groups, Alcoholic Beverages and Tobacco registered the highest CPI in January 2020 at 217.1 followed by Housing, Water, Electricity, Gas and Other Fuels at 143.5 and Health at 131.7. On the other hand, Recreation and Culture with 114.6, Transport at 107.8 and Communication at 106.1 were the bottom three with the lowest CPI posted in the month of January 2020 as shown in figure 2.
Presented below in table 1 is the Consumer Price Index for All Income Households by province in Northern Mindanao for the period of January 2019 and January 2020.
As shown in table 1, all the provinces exhibited an increase in Consumer Price Index for all items as compared to the same period last year. Across the provinces, the province of Misamis Occidental registered the highest CPI for all items at 128.8 and the province with lowest CPI registered as of January 2020 was Camiguin at 123.4.
Based on the percent change from January 2019 to January 2020, Misamis Occidental ranked first with highest increase in CPI of 2.6 percent from 125.5, followed by Misamis Oriental with an increase of 2.3 percent from 124.1 last January of 2019. Camiguin had an increase of 2.1 percent in CPI from 120.9 and Lanao del Norte had increase of 1.8 percent in CPI from 123.1 on same period last year. Meanwhile the province of Bukidnon had the lowest increase of 1.7 percent from 124.0 CPI last January 2019.
INFLATION RATE
Inflation rate refers to the percent change in the average prices of goods and services typically purchased by consumers compared to prices a year ago. Figure 3 below displays the Inflation rate for all items in Northern Mindanao from January 2019 and January 2020. The inflation rate of the region reduces by 2.5 percentage point from 4.6 percent to 2.1 percent same period last year.
Figure 4 displays the year-on-year inflation rate of all items by province for the month of January 2019 and 2020.
The province of Misamis Occidental had the highest inflation rate registering at 2.6 percent in January 2020. On the other side, the province registered with the lowest inflation rate was Bukidnon at 1.7 percent. All of the provinces demonstrated a decreasing trend as compared to the previous month.
PURCHASING POWER OF PESO (PPP)
The Purchasing Power of Peso (PPP) shows how much the peso in the base period is worth in the current period. The PPP in Northern Mindanao is at P0.79 for the month of January 2020. This value means that the goods and services that are worth one peso (P1.00) in the year 2012, the current value of it decreases into seventy-nine centavos (P0.79).
This figure shows the comparative year-on-year purchasing power of peso of the provinces in Northern Mindanao from January 2019 and 2020.
(Sgd.)RUBEN D. ABARO, JR., CESE
Regional Director
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.
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