Tacloban City's 2023 average inflation rate lower than in 2022

Tacloban City closed the year 2023 with an average of 2.9 percent inflation. It was lower by 1.6 percentage points compared to 2022 at 4.5 percent in average. Concurrently, Leyte’s inflation rate for the year 2023 is relatively lower by 2.4 percentage points, from an average of 6.4 percent in 2022 to 4.0 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 Tacloban City’s 2023 Average Inflation

The 1.6 percentage points difference between the two (2) periods was triggered by the decrease in the average inflation rates of the following major commodity groups:

     a. Information and communication at 0.1 percent in 2023 from 0.3 percent in 2022; and

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

In addition, housing, water, electricity, gas and other fuels and transport recorded a deflation of -2.1 percent and -1.8 percent, respectively in 2023 from an inflation of 1.5 percent and 12.4 percent, respectively in 2022.

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

     a. Food and non-alcoholic beverages at 7.9 percent in 2023 from 6.5 percent in 2022;

     b. Alcoholic beverages and tobacco at 5.0 percent in 2023 from 3.9 percent in 2022;

     c. Health at 2.2 percent in 2023 from 0.9 percent in 2022;

     d. Recreation, sport and culture at 1.2 percent in 2023 from 0.6 percent in 2022;

     e. Education services at 0.6 percent in 2023 from 0.4 percent in 2022;

     f. Restaurants and accommodation services at 4.1 percent in 2023 from 1.7 percent in 2022; and

     g. Personal care, and miscellaneous goods and services at 2.8 percent in 2023 from 1.1 percent in 2022.

Moreover, furnishings, household equipment and routine household maintenance recorded an average inflation rate of 0.9 percent in 2023 from an average deflation of -0.8 percent in 2022. Meanwhile, clothing and footwear retained it average inflation rate in 2022 and 2023 at 0.1 percent.

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 financial services, clothing and footwear, and information and communication. Meanwhile, housing, water, electricity, gas and other fuels and transport recorded an average deflation of -2.1 percent and -1.8 percent, respectively.

Moreover, the highest recorded inflation rate in 2023 was in the month of February at 4.3 percent while the lowest recorded inflation rate was in the month of July at 1.1 percent. The inflation rates in 2023 from January to December were generally lower compared to the inflation rates in 2022 except for the months of February and March.

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 Tacloban City for 2023 was 117.1. This implies that the average retail price of goods and services in Leyte in 2023 is 17.1 percent higher than the average retail prices in 2018 (base year).

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

The Purchasing Power of Peso (PPP) in Tacloban City continues to decline from 2018 to 2023. In 2023, the average PPP of Tacloban City was recorded at 85 centavos, 3 centavos lower than the 88 centavos in 2022 and 15 centavos compared to 2018 (base year). The 85 centavos PPP in Tacloban City indicates that the same basket of goods and services worth 85 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