Friday, June 18, 2021
Inflation Rate (IR) in Eastern Visayas escalated to 3.1 percent in May 2021. This IR is 0.3 percentage point higher compared with the 2.8 percent IR in April 2021.
This May IR of the region is also 1.3 percentage points higher than the recorded 1.8 percent IR in the same period last year.
In comparison with the national average IR, the regional IR is 1.4 percentage points lower than the 4.5 percent national IR in May 2021.
Eastern Visayas’ IR of 3.1 percent ranked third lowest among the regions in May 2021. Central Visayas registered the lowest IR at 2.1 percent, followed by BARMM at 2.5 percent.
On the other hand, Bicol posted the highest IR at 7.5 percent, followed by Cagayan Valley at 6.5 percent. CALABARZON registered the third highest IR among the regions in May 2021 at 5.8 percent.
Among the provinces, only Southern Leyte and Leyte registered decreases in IRs. Southern Leyte’s IR declined to 3.3 percent in May 2021 from 4.1 percent in April 2021, a reduction by 0.8 percentage point. Leyte’s IR, meanwhile, decreased to 0.9 percent in May 2021 from 1.4 percent in April 2021. It posted the lowest IR among the provinces during the month in review.
Samar registered the highest increase in IR by 1.6 percentage points. Its IR rose to 8.3 percent in May 2021 from 6.7 percent in April 2021. It was the highest IR among provinces during the reference month. Northern Samar grew by 0.9 percentage point, registering 1.6 percent IR in May 2021. Biliran’s 0.6 percentage
point increase in IR brought its level to 5.5 percent. While Eastern Samar’s IR settled at 5.4 percent, prompted by the 0.5 percentage point increase during the month in review.
BY COMMODITY GROUP
Majority of the 11 commodity groups in the region exhibited higher IRs in May 2021 compared with their rates in April 2021. Transport commodity group registered the biggest increase in IR by 0.8 percentage point. Its double-digit IR of 12.9 percent in April 2021 grew to 13.7 percent in May 2021. This can be traced to higher double-digit IRs for both operation of personal transport equipment (28.9%) and transport services (10.1%).
Housing, water, electricity, gas and other fuels commodity group recorded 3.1 percent IR in May 2021, higher by 0.7 percentage point from the 2.4 percent IR in April 2021. This growth can be attributed to the higher IRs in the indices for electricity, gas, and other fuels (8.7%), maintenance and repair of the dwelling (2.1%), and water supply and miscellaneous services relating to the dwelling (0.9%).
The IR for food and non-alcoholic beverages commodity group increased to 2.2 percent in May 2021 from 2.0 percent in April 2021. Lower IRs were noted in majority of the items under this commodity group. However, these were offset by faster IRs noted in other food indices resulting to 0.2 percentage point increase in IR for food and non-alcoholic beverages commodity group. Fruits index registered the highest decrease of 5.3 percentage points, from 2.9 percent IR in April 2021 to 2.4 percent deflation in May 2021. The IR for vegetables index managed to shed off by 2.9 percentage points from its 3.2 percent IR in April 2021, posting 0.3 percent IR in May 2021. The IR for sugar, jam, honey, chocolate, and confectionery index also declined by 0.2 percentage point, settling at 1.4 percent during the month in review. Corn index further deflated to 4.1 percent. Decreased IRs were also registered in the indices for meat (8.9%) and non-alcoholic beverages (0.4%). Meanwhile, prices of fish picked up at a faster rate of 6.4 percent in May 2021 from 5.3 percent in April 2021. Faster price increases
were also noted in indices for food products not elsewhere classified (3.7%); milk, cheese, and eggs (2.2%); and oils and fats (1.6%). Rice and bread and cereals continued to register deflations in May 2021 but at a slower rate of 1.0 percent and 0.7 percent, respectively.
The IR for clothing and footwear commodity group increased by 0.2 percentage point, pushing its IR to 2.0 percent in May 2021.
Compared with its April 2021 levels, IR for communication commodity group inched up by 0.1 percentage point, registering to 0.7 percent IR in May 2021.
Recreation and culture commodity group continued to record deflation but at a slower rate of 1.4 percent in May 2021 from 1.5 percent in April 2021.
Only the commodity group of restaurants and miscellaneous goods and services registered a decrease in IR. Its IR declined to 2.8 percent in May 2021 from 3.6 percent in April 2021.
Meanwhile, alcoholic beverages and tobacco; furnishings, household equipment, and routine maintenance of the house; health; and education commodity groups retained their previous month’s IRs at 6.9 percent, 3.2 percent, 1.6 percent, and 0.5 percent, respectively.
PURCHASING POWER OF PESO
The Purchasing Power of Peso (PPP) of the region weakened to Php 0.76 in May 2021. This PPP implies that the goods and services worth PhP 76.00 in 2012 is now worth PhP 100.00 in May 2021.
Compared with their levels in April 2021, PPP in Biliran strengthened by PhP 0.01, while PPP in Northern Samar and Samar weakened by PhP 0.01. The rest of the provinces retained their previous month’s PPP.
Leyte recorded the strongest PPP among provinces in May 2021 at PhP 0.80. Biliran ranked second at PhP 0.79, followed by Southern Leyte at PhP 0.78, Eastern Samar at PhP 0.73, and Northern Samar at PhP 0.71. Samar posted the weakest PPP during the reference month at PhP 0.69.
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 CPI.
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.
Based on PSA Board Resolution No. 02, Series of 2018, the new methodology for CPI uses straightforward computation of monthly average prices of commodities; chain method for elementary item indexes; geometric mean method at the lowest level (subclass level) of aggregation of price indexes; and weighted arithmetic mean at the higher levels of aggregation of price indexes.
BASE YEAR - is a period at which the index number is set to 100. It is the reference point of the index number
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 2012 Family Income and Expenditure Survey.
Sgd. WILMA A. PERANTE