Leyte’s 2023 average inflation rate lower than in 2022

Leyte closed the year 2023 with an average of 4.0 percent inflation. It was lower by 2.4 percentage points compared to 2022 at 6.4 percent in average. Concurrently, the region’s inflation rate for the year 2023 is relatively lower by 2.2 percentage points, from an average of 6.6 percent in 2022 to 4.4 percent in 2023. Among all the provinces and HUC in Eastern Visayas, only the province of Eastern Samar manifested a higher average inflation rate in 2023 compared to its 2022 average inflation rate.

Main Drivers to the Downward Trend of Leyte’s 2023 Average Inflation

The 2.4 percentage points difference between two (2) periods was triggered by the decrease in the average inflation rates of the following major commodity groups:

     a. Food and non-alcoholic beverages at 6.9 percent in 2023 from 8.3 percent in 2022;

     b. Transport at 0.0 percent in 2023 from 12.1 percent in 2022;

     c. Information and communication at 0.1 percent in 2023 from 0.4 percent in 2022; and

     d. Financial services at 0.0 percent in 2023 from 8.6 percent in 2022.

In addition, housing, water, electricity, gas and other fuels recorded an average deflation of -0.1 percent in 2023 from an inflation of 5.5 percent in 2022.

In contrast, the following major commodity groups registered higher average inflation rates compared to previous year’s average inflation rate:

     a. Alcoholic beverages and tobacco at 6.6 percent in 2023 from 3.0 percent in 2022;

     b. Clothing and footwear at 1.0 percent in 2023 from 0.9 percent in 2022;

     c. Furnishings, household equipment and routine household maintenance at 3.1 percent in 2023 from 0.8 percent in 2022;

     d. Health at 3.1 percent in 2023 from 0.6 percent in 2022;

     e. Recreation, sport and culture at 1.7 percent in 2023 from 0.5 percent in 2022;

     f. Education services with 0.5 percent in 2023 from 0.4 percent in 2022;

     g. Restaurants and accommodation services with 3.9 percent in 2023 from 3.0 percent in 2022; and

     h. Personal care, and miscellaneous goods and services with 3.5 percent in 2023 from 1.4 percent in 2022.

In 2023, food and non-alcoholic beverages, alcoholic beverages and tobacco, and restaurants and accommodation services are the top three (3) commodity groups with the highest average inflation rates. On the other hand, the three (3) commodity groups with the lowest average inflation rates are transport, information and communication, and financial services. Meanwhile, housing, water, electricity, gas and other fuels recorded an average deflation of -0.1 percent in 2023. 

Moreover, the months of January and February recorded the highest inflation rate in 2023 at 5.8 percent while the lowest was recorded in the month of July at 2.0 percent. The inflation rates in 2023 from January to December were generally lower compared to the inflation rates in 2022 except for the month of February.

The inflation rate is the general rise in prices over a period. It indicates how fast or how slow price changes over two-time periods. Contrary to common knowledge, low inflation does not necessarily connote that prices are falling instead; it means that prices continue to increase at a slower rate. It is a derived indicator of the Consumer Price Index (CPI).

The CPI is a measure of change in the average retail prices of goods and services commonly purchased by a particular group of people in a specific area.  The average CPI in Leyte for 2023 was 119.9. This implies that the average retail price of goods and services in Leyte in 2023 is 19.9 percent higher than the average retail prices in 2018 (base year).

Average Purchasing Power of Peso (PPP) of Leyte continues to weaken from 2018 to 2023

The Purchasing Power of Peso (PPP) in Leyte continues to decline from 2018 to 2023. In 2023, the average PPP of Leyte was recorded at 83 centavos, 4 centavos lower than the 87 centavos in 2022 and 17 centavos compared to 2018 (base year). The 83 centavos PPP in Leyte indicates that the same basket of goods and services worth 83 pesos in 2018 (base year) is worth 100 pesos in general in 2023.

TECHNICAL NOTES

Rebasing of the CPI is necessary to ensure that this barometer of economic phenomena is truly reflective of current situation. Consumer taste, fashion and technology change over time causing the fixed market basket of goods and services to become outmoded. To capture such changes for a more meaningful price comparison, revision or updating of the fixed market basket, the sample outlets, the weights and the base year had to be done periodically.

BASE PERIOD – refers to the reference period of the index number. It is a period at which the index is set to 100. Current base period is 2018.

COMPUTING THE CPI - The formula used in computing the CPI is the weighted arithmetic mean of price relatives, a variant of the Laspeyres formula with fixed base year period weights.

CONSUMER PRICE INDEX – is a measure of change in the average retail prices of goods and services commonly purchased by a particular group of people in a particular area.

INFLATION RATE – refers to the annual rate of change or year-on-year change in CPI.

MARKET BASKET - refers to a sample of goods and services used to represent all goods and services bought by a particular group of consumers in a particular area.

MONITORING OF PRICES - is to establish baseline information for prices of the items in the base year and monitoring of the prices of the items on a regular basis. Except for Food, Beverage and Tobacco which is monitored on a weekly basis in NCR, price collection is done twice a month. 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 PESO – it is a measure of how much the peso in the base period is worth in another period. It gives as indication of the real value in a given period relative to the peso value in the base period.

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 -     The weights for the 2018-based CPI were derived from the expenditure data of the 2018 Family Income and Expenditure Survey (FIES). The weight for each item of expenditure is a proportion of that expenditure item to the total national expenditure. The total (all items) national expenditure weights is equal to 100.

SGD. SHERYL ANN A. JAMISOLA

Chief Statistical Specialist