Wednesday, February 24, 2021
Eastern Visayas welcomed January 2021 with a 2.2 percent Inflation Rate (IR). This IR is 0.2 percentage point lower compared with the 2.4 percent IR in December 2020. This figure, however, is 0.2 percentage point higher than the recorded 2.0 percent IR in the same period last year.
The regional IR is 2.0 percentage points lower than the 4.2 percent national average inflation rate in January 2021.
Eastern Visayas ranked fourth among the regions with low IR in January 2021. Zamboanga Peninsula registered the lowest inflation rate during the month in review at 0.2 percent, followed by Central Visayas and Davao Region at 0.6 percent and 1.9 percent, respectively.
On the other hand, Cagayan Valley posted the highest IR at 8.0 percent, followed by Bicol Region at 7.4 percent. CALABARZON ranked third with IR at 5.6 percent.
Among the provinces, only Samar registered an increase in IR of 0.3 percentage point. It rose to 5.8 percent in January 2021 from 5.5 percent in December 2020. This is the highest IR among the provinces during the reference month. Leyte, meanwhile, retained its previous month’s IR at 1.9 percent. Biliran registered the highest decrease of 0.8 percentage point, pushing its IR to zero in January 2021. Northern Samar, Southern Leyte, and Eastern Samar’s IRs registered decreases ranging from 0.1 percentage point to 0.7 percentage point, settling at 3.3 percent, 3.0 percent, and 1.4 percent, respectively, during the month in review.
Five (5) of the 11 commodity groups in the region exhibited lower IRs in January 2021 compared with their rates in December 2020. Alcoholic beverages and
tobacco commodity group registered the biggest decrease of 1.9 percentage points, from 9.3 percent in December 2020 to 7.4 percent in January 2021. This decrease may be traced to slower IR in the index for tobacco, from double digit 12.4 percent in December 2020 to 9.1 percent in January 2021.
Prices for housing, water, electricity, gas and other fuels commodity group further deflated to 1.4 percent in January 2021 from 0.6 percent in December 2020, a continued drop by 0.8 percentage point. This can be attributed to the index for electricity, gas and other fuels which posted 4.9 percent deflation in January 2021 from 2.8 percent deflation in December 2020.
Compared with their December 2020 levels, the IRs for clothing and footwear commodity group (2.5%) and health commodity group (1.1%) were lower by 0.2 percentage point and 0.1 percentage point, respectively, in January 2021.
The IR for food and non-alcoholic beverages commodity group eased by 0.1 percentage point, from 3.1 percent in December 2020 to 3.0 percent in January 2021. Double digit IRs were noted in vegetables and fruits indices at 15.9 percent and 12.0 percent, respectively. Prices of meat picked up by 3.1 percent in January 2021 from 1.4 percent in December 2020. Increased IRs were also registered in the indices for food products not elsewhere classified (6.9 percent); sugar, jam, honey, chocolate, and confectionary products (1.9 percent); and rice (0.6 percent). However, the 2.9 percent deflation in corn index, and the drop in the IR for fish index to 0.3 percent in January 2021 from 2.9 percent in December 2020, eased the impact of those increases to the overall IR of the commodity group.
On the other hand, IR for transport commodity group increased by 0.6 percentage point. The 5.0 percent IR in December 2020 rose to 5.6 percent in January 2021. The 3.0 percent deflation registered in the index for operation of personal transport equipment was offset by the higher IR (9.6%) posted in the index for transport services.
Restaurant and miscellaneous goods and services commodity group recorded 0.4 percentage points increase in its IR, from 3.8 percent in December 2020 to
4.2 percent in January 2021. This can be traced to higher IRs in the indices for catering services (6.3%) and personal care (2.6%).
Communications commodity group and recreation and culture commodity group continued to post deflations but at a slower rate, settling at 1.5 percent and 1.3 percent during the month in review.
Meanwhile, the commodity groups of furnishings, household equipment and routine maintenance of the house and education retained their previous month’s IRs at 2.4 percent and 0.4 percent, respectively.
PURCHASING POWER OF PESO
The Purchasing Power of Peso (PPP) of the region weakened to Php 0.77 in January 2021. This PPP implies that the goods and services worth PhP 77.00 in 2012 is worth PhP 100.00 in January 2021.
Biliran recorded the strongest PPP among provinces in January 2021 at PhP 0.81. Leyte and Southern Leyte ranked second both at PhP 0.79, followed by Eastern Samar at PhP 0.75 and Northern Samar at PhP 0.72. Samar posted the weakest PPP during the reference month at PhP 0.70.
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