Leyte’s inflation rate slows down at 2.7 percent in September 2024

Leyte’s inflation rate continued to slow down at 2.7 percent in September 2024 from 3.8 percent in August 2024. This is the lowest recorded inflation rate of the province for this year. In September 2023, inflation rate was higher at 4.4 percent.  Likewise, the region recorded its lowest inflation rate for this year in September 2024 at 1.8 percent. Furthermore, all other provinces and HUC in the region manifested a decrease in their respective inflation rates during the reference month. 

Main Drivers Contributing to the Downward Trend of Leyte’s Inflation

The downtrend in Leyte’s inflation rate in September 2024 was primarily brought about by slower annual increment of the heavily-weighted food and non-alcoholic beverages at 3.8 percent from 6.7 percent in the previous month which was driven by the slower rate of increase in cereals and cereal products, milk, other dairy products and eggs, fruits and nuts, ready-made food and other food products, fruit and vegetable juices, coffee and coffee substitutes, and water, and the faster rate of decrease in prices of fish and other seafood and the decrease in prices of vegetable, tubers, plantains, cooking bananas and pulses. Lower annual increments were also noted in the indices of the following commodity groups during the reference month:

   a. Alcoholic beverages and tobacco at 1.5 percent from 1.6 percent in the previous month due to the slower rate of increase in prices of spirits and liquors;

  b. Furnishings, household equipment and routine household maintenance at 4.0 percent from 4.2 percent in the previous month which was caused by the slower rate of increase in prices of glassware, tableware and household utensils, non-motorized tools and miscellaneous accessories, and non-durable household goods, and the faster rate of decrease in prices of small household appliances; and

  c. Restaurants and accommodation services at zero percent from 0.5 percent in the previous month due to the slower rate of increase in prices of restaurants, café and the like.

In addition, clothing and footwear and transport recorded a deflation of -0.6 percent and -3.8 percent, respectively, compared to -0.5 percent and -1.0 percent in the previous month. The deflation in clothing and footwear was driven by the faster rate of decrease in prices of garments, while the deflation in transport was attributed to the faster rate of decrease in prices of fuels and lubricants for personal transport equipment.

In contrast, two (2) commodity groups recorded an increase in their respective inflation rates in September 2024:

   a. Housing, water, electricity, gas and other fuels at 4.1 percent from 0.7 percent in the previous month which was driven by the faster rate of increase in prices of services for the maintenance, repair and security of the dwelling and electricity, and the increase in prices of actual rentals paid by tenants for main residence; and

   b. Personal care, and miscellaneous goods and services due to the faster rate of increase in prices of hairdressing salons and personal grooming establishments.

Meanwhile, the five (5) other major commodity groups maintained their inflation rates from their previous months’ rate:

   a. Health at 1.0 percent;

   b. Information and communication at zero percent;

   c. Recreation, sport and culture at 1.9 percent;

   d. Education services at 12.6 percent; and

   e. Financial services at zero percent.

The top three commodity groups contributing to the trend of September 2024 inflation of Leyte were the following:

   a. Food and non-alcoholic beverages with 82.2 percent share;

   b. Transport with 15.6 percent share; and

   c. Restaurants and accommodation services with 1.5 percent share.

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 overall CPI in Leyte for September 2024 was 123.7. This implies that the average retail price of goods and services in Leyte is 23.7 percent higher than the average retail prices in 2018 (base year).

Purchasing Power of Peso (PPP) retains at 81 centavos in September 2024

The Purchasing Power of Peso (PPP) in Leyte retained at 81 centavos in September 2024. Meanwhile, the PPP in the region decreased at 80 centavos in September 2024 from 81 centavos in August 2024. The 81 centavos purchasing power of peso in Leyte indicates that the same basket of goods and services worth 81 pesos in 2018 (base year) is worth 100 pesos during the reference period.

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