Inflation rate (IR) in Eastern Visayas inched up to 1.9 percent in October 2020 from 1.8 percent in September 2020. This figure is 2.6 percentage points higher compared with the 0.7 percent deflation recorded in October 2019.
The regional IR is 0.6 percentage point lower than the 2.5 percent national average.
Eastern Visayas and Zamboanga Peninsula ranked third among regions with low IR in October 2020. Central Visayas registered the lowest inflation during the month at 1.3 percent, followed by CAR at 1.5 percent.
Meanwhile, Bicol continued to post the highest IR at 4.1 percent, followed by SOCCSKSARGEN and Caraga at 3.3 percent and 3.1 percent, respectively.
Among 17 regions, eight (8) exhibited higher IRs, six (6) had lower IRs, while the rest retained their IRs, from the previous month’s rates.
Among provinces, only Biliran exhibited higher IR in October 2020 compared with its IR the previous month. From 1.3 percent deflation in September 2020, it accelerated to 1.1 percent for the period in review.
Samar IR decreased by 1.6 percentage points from 5.2 percent in September 2020 to 3.6 percent in October 2020. However, this is the highest IR among provinces in the region. The IR of Northern Samar and Eastern Samar declined to 3.3 percent and 1.4 percent, respectively. Southern Leyte and Leyte retained their previous month’s IR at 3.1 percent and 1.3 percent, respectively.
The increase in IR in October 2020 was attributed to the over-all increase in the inflation of non-food items at 1.8 percent compared with the 1.2 percent IR in September 2020. The index for housing, water, electricity, gas and other fuels commodity group moved up by 1.5 percentage points at 0.8 percent in October 2020 from a deflation of 0.7 percent in September 2020. This was attributed to the continued deflation but at a slower rate of electricity, gas and other fuels from 6.8 percent deflation in September 2020 to 2.6 percent deflation in October 2020. The index for the maintenance and repair of dwelling also increased to 1.6 percent in October 2020 from 1.5 percent in September 2020.
The IR of transport commodity group posted at 3.1 percent in October 2020 was 0.4 percentage point higher compared with the 2.7 percent in September 2020. This was due to the 1.4 percentage points mark up in the index of transport services from 6.1 percent in September 2020 to 7.5 percent in October 2020.
Furnishings, household equipment and routine maintenance of the house registered a 3.0 percent IR in October 2020 or 0.3 percentage point higher than the 2.7 percent in September 2020. This was triggered by the increases in the indices for household appliances (4.2 percent) and goods and services for routine household maintenance (2.9 percent) in October 2020.
Recreation and culture commodity group continued to post deflation but at a slower rate of 1.8 percent in October 2020. This can be traced to the IR of other major durables for recreation and culture (-3.7 percent) and the increase in the index of audio-visual, photographic and information processing equipment (0.8 percent) in October 2020.
On the other hand, decreases were noted in the indices of four (4) other commodity groups. Food and non-alcoholic beverages commodity group declined by 0.5 percentage point, from 2.2 percent in September 2020 to 1.7 percent in October 2020. Contributing largely to the decrease was the index for fruits, which dropped from a double-digit growth rate of 14.1 percent in September 2020 to 8.0 percent in October 2020. Also, lower indices for corn (0.5 percent) and vegetables (4.8 percent) were recorded in October 2020 while index for fish declined from 1.2 percent to 0.6 percent deflation, for the month in review.
Compared with their levels in September 2020, lower IRs were recorded for restaurant and miscellaneous goods and services (4.3 percent), clothing and footwear (2.9 percent), and alcoholic beverages and tobacco (7.5 percent).
Health and education commodity groups retained their previous month’s IR at 1.0 percent and 0.4 percent, respectively; while that for communication commodity group remained at 1.7 percent deflation for the past three months.
PURCHASING POWER OF PESO
The Purchasing Power of Peso (PPP) of the region remained at P0.79 in October 2020. This PPP implies that the goods and services worth P79.00 in 2012 is worth P100.00 in October 2020.
All provinces in the region sustained their PPP in October 2020. Biliran recorded the strongest PPP at P0.82. Leyte ranked second at P0.81, followed by Southern Leyte at P0.80, Eastern Samar at P0.77 and Northern Samar at P0.74. Samar posted the weakest PPP at P0.73.
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.