Leyte’s 2024 average inflation rate lower than in 2023

Leyte closed the year 2024 with an average of 3.1 percent inflation. It was lower by 0.9 percentage point compared to 2023 at 4.0 percent in average. Concurrently, the region’s inflation rate for the year 2024 is relatively lower by 1.3 percentage points, from an average of 4.4 percent in 2023 to 3.1 percent in 2024. Among all the provinces and HUC in Eastern Visayas, only the provinces of Southern Leyte and Biliran manifested a higher average inflation rate in 2024 compared to their 2023 average inflation rates.

Main Drivers to the Downward Trend of Leyte’s 2024 Average Inflation

The 0.9 percentage point 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 5.1 percent in 2024 from 6.9 percent in 2023;

   b. Alcoholic beverages and tobacco at 3.0 percent in 2024 from 6.6 percent in 2023;

   c. Health at 1.4 percent in 2024 from 3.1 percent in 2023;

   d. Information and communication at zero percent in 2024 from 0.1 percent in 2023;

   e. Recreation, sport and culture at 1.6 percent in 2024 from 1.7 percent in 2023;

   f. Restaurants and accommodation services at 2.0 percent in 2024 from 3.9 percent in 2023; and

   g. Personal care, and miscellaneous goods and services at 2.0 percent in 2024 from 3.5 percent in 2023.

In addition, clothing and footwear recorded an average deflation of -0.5 percent in 2024 from an inflation of 1.0 percent in 2023.

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

   a. Housing, water, electricity, gas and other fuels at 0.7 percent in 2024 from an average deflation of -0.1 percent in 2023;

   b. Furnishings, household equipment and routine household maintenance at 3.7 percent in 2024 from 3.1 percent in 2023; and

   c. Education services at 6.3 percent in 2024 from 0.5 percent in 2023.

On the other hand, financial services and transport maintained their average inflation rate of zero percent, consistent with the previous year.

In 2024, the top three commodity groups with the highest average inflation rates were education services, food and non-alcoholic beverages, and furnishings, household equipment, and routine household maintenance. Conversely, transport, information and communication, and financial services recorded the lowest average inflation rates at zero percent. Meanwhile, clothing and footwear recorded an average deflation of -0.5 percent. 

Moreover, July recorded the highest inflation rate in 2024 at 4.6 percent, while December had the lowest at 1.1 percent. Overall, inflation rates from January to December 2024 were generally lower than those in 2023, except for the months of June, July, and August.

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 2024 was 123.6. This implies that the average retail price of goods and services in Leyte in 2024 is 23.6 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 2024

The Purchasing Power of Peso (PPP) in Leyte continues to decline from 2018 to 2024. In 2024, the average PPP of Leyte was recorded at 81 centavos, 2 centavos lower than the 83 centavos in 2023 and 19 centavos lower compared to 2018 (base year). The 81 centavos PPP in Leyte indicates that the same basket of goods and services worth 81 pesos in 2018 (base year) is worth 100 pesos in general in 2024.

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