Wednesday, January 20, 2021
Eastern Visayas closed 2020 with a 2.4 percent Inflation Rate (IR). This IR is 0.6 percentage point higher compared with the 1.8 percent IR a month ago. This is also 0.9 percentage point higher than the recorded 1.5 percent IR in the same period last year.
The regional IR is 1.1 percentage points lower than the 3.5 percent national average inflation rate in December 2020.
Eastern Visayas ranked fifth among the regions with low IR in December 2020. Central Visayas registered the lowest inflation rate during the month in review at 0.9 percent, followed by Zamboanga Peninsula and Davao Region at 1.0 percent and 1.4 percent, respectively.
On the other hand, Bicol Region and Cagayan Valley posted the highest IR both at 6.6 percent, followed by Central Luzon at 4.5 percent. CALABARZON and MIMAROPA ranked third with IRs both at 4.4 percent.
Samar, Northern Samar, Southern Leyte, and Leyte registered higher IRs in December 2020 compared with their figures in November 2020. Samar and Northern Samar both recorded the highest increase in their IRs at 1.9 percentage points, pushing their IRs in December 2020 to 5.5 percent and 4.0 percent, respectively. Southern Leyte and Leyte’s IRs, meanwhile, rose to 3.2 percent and 1.9 percent, respectively. Both provinces recorded 0.6 percentage point increase from their figures in November 2020.
On the other hand, Biliran registered a 1.0 percentage point decrease in IR. It declined to 0.8 percent in December 2020 from 1.8 percent in November 2020. This is the lowest IR among the provinces during the month in review. Eastern Samar, meanwhile, eased down to 1.5 percent in December 2020 from 1.7 percent in November 2020.
Five of the 11 commodity groups in the region exhibited higher IRs in December 2020 compared with their rates in November 2020. Alcoholic beverages
and tobacco commodity group registered the biggest increase of 2.9 percentage points, from 6.4 percent in November 2020 to 9.3 percent in December 2020. This acceleration may be traced to the double-digit IR (12.4%) registered in the index for tobacco.
The IR for food and non-alcoholic beverages commodity group increased by 1.4 percentage points, from 1.7 percent in November 2020 to 3.1 percent in
December 2020. Higher IRs were noted in all items under this commodity group. Vegetables index registered the highest increase of 4.7 percentage points, posting a double-digit IR of 13.0 percent in December 2020 from 8.3 percent in November 2020. Fish index recorded 2.9 percent IR in December 2020 from 0.6 percent deflation in November 2020. Corn index continued to register deflation but at slower rate of 0.4 percent during the reference month from 0.5 percent deflation in November 2020. The rest of the items under this commodity group recorded increases in IRs ranging from 0.1 percent to 2.2 percent.
Transport commodity group recorded 1.1 percentage points increase in its IR, from 3.9 percent in November 2020 to 5.0 percent in December 2020. The 3.1 percent deflation registered in the index for operation of personal transport equipment was offset by the higher IR (8.9%) posted in the index for transport services. Compared with their November 2020 levels, the IRs for clothing and footwear commodity group (2.7%) and health commodity group (1.2%) were higher by 0.2 percentage point and 0.1 percentage point, respectively, in December 2020.
On the other hand, annual price change for housing, water, electricity, gas and other fuels commodity group declined by 1.1 percentage points. The 0.5 percent IR in November 2020 dropped to 0.6 percent deflation in December 2020. This can be attributed to the significant decrease in the index for electricity, gas and other fuels to 2.8 percent deflation in December 2020, from 0.1 percent deflation in November 2020.
The deflation for communication commodity group eased down by 0.1 percentage point, settling at 1.6 percent during the month in review. The commodity groups of restaurants and miscellaneous goods and services; furnishings, household equipment and routine maintenance of the house; and education retained their previous month’s IRs at 3.8 percent, 2.4 percent, and 0.4 percent, respectively. Meanwhile, recreation and culture commodity group retained its previous month’s deflation at 1.4 percent.
PURCHASING POWER OF PESO
The Purchasing Power of Peso (PPP) of the region remained at PhP 0.78 in December 2020. This PPP implies that the goods and services worth PhP 78.00 in 2012 is worth PhP 100.00 in December 2020.
Compared to their levels in November 2020, PPP in Samar (PhP 0.71) weakened by PhP 0.02 in December 2020. This is the lowest PPP among the provinces during the month in review. PPP in Leyte (PhP 0.80), Southern Leyte (PhP 0.79), Eastern Samar (PhP 0.75), and Northern Samar (PhP 0.72) weakened by PhP 0.01 in December 2020. Biliran, meanwhile, retained its previous month’s PPP at PhP 0.82 registering the strongest PPP among the provinces during the reference month.
The current CPI series is 2012-based. The five steps involved in the rebasing/computing of the CPI are as follows: (1) identification of the base year (2) determination of the market basket (3) determination of household consumption patterns (4) monitoring of prices of items in the basket and (5) computation of the CPI using chain method.
The 2012 FIES expenditure data were used to directly estimate the 2012 CPI weights at the national and regional levels. However, the 2012 FIES estimates for the expenditure data at the provincial level were not directly utilized in estimating the CPI expenditure weights as the data at the provincial/city level may not be reliable with the use of the households' master sample (MS) that was utilized in selecting the 2012 FIES sample households. The MS was drawn using regions as domains in generating estimates in all the household surveys of the PSA starting July 2003. The provincial/city expenditure data were derived using the model-based method in small area estimation procedures using the regional expenditure data as the control total for all the expenditure data within the specific region. Using these estimates, the weight for each item of expenditure is computed as a proportion of that item of expenditure to the total national expenditure. A raking procedure was done to adjust the weights of the provinces so that the provincial weights when added up will equal to the regional weights.
BASE YEAR - is a period at which the index number is set to 100. It is the reference point of the index number series.
CONSUMER PRICE INDEX (CPI) - is an indicator of the change in the average prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
DEFLATION - is the decline in prices for goods and services that happens when the inflation rate dips below 0%.
INFLATION RATE (IR) - is the annual rate of change or the year-on-year changes in CPI. It indicates how fast or how slow price changes over two time periods (year-on-year). Contrary to common knowledge, low inflation does not necessarily connote that prices of commodities are falling. It means that prices continue to increase but at a slower rate.
MARKET BASKET - refers to a sample of goods and services, which is meant to represent the totality of all the goods and services purchased by households relative to a base year.
MONITORING OF PRICES - involves establishing baseline information for the prices of the items in the base year and monitoring the prices of the items on a regular basis. Data collection for the CPI is done by the provincial office twice a month, except for petroleum products which are monitored on a weekly basis, every Friday. First collection phase is done during the first five days of the month while the second phase is on the 15th to 17th day of the month.
PURCHASING POWER OF PESO (PPP) - gives an indication of the real value of peso (how much it is worth) in a given period relative to its value in the base period. It is computed as the reciprocal of CPI multiplied by 100.
RETAIL PRICE - refers to the actual price at which retailers sell a commodity on spot or earliest delivery, usually in small quantities for consumption and not for resale. It is confined to transactions on cash basis in the free market and excludes black-market prices and prices of commodities that are on sale as in summer sales, anniversary sales, Christmas sales, etc.
WEIGHTS - is a value attached to a commodity or group of commodities to indicate the relative importance of that commodity or group of commodities in the market basket. The weights for the 2012-based CPI were derived from the expenditure data of the 2018 Family Income and Expenditure Survey.
SGD. WILMA A. PERANTE