Leyte’s inflation rate drops at 3.0 percent in June 2023

     Leyte’s inflation rate continued to decline at 3.0 percent in June 2023 from 3.7 percent in May 2023. This is the lowest recorded inflation rate of the province this year. Leyte’s inflation rate during the same period last year was higher at 7.0 percent. Likewise, the region’s inflation rate further declined at 3.3 percent in June 2023 from 4.2 percent in May 2023. Among all the provinces and HUC in the region, only Southern Leyte manifested an increase in its inflation rate in June 2023.

       The decline in Leyte’s June 2023 inflation rate was due to the downtrend in annual rate of change of CPI of ten (10) major commodity groups. The inflation rate for Food and Non Alcoholic Beverages decreased at 6.2 percent in June 2023 from 7.1 percent in May 2023. This was driven by the slower rate of increase in prices of Oils and Fats, Fruits and Nuts, Vegetables, Tubers, Plantains, Cooking Bananas and Pulses, Sugar, Confectionery and Desserts, Ready-made Food and Other Food Products, Fruit and Vegetable Juices, Tea, Maté and Other Plant Products for Infusion, and Cocoa Drinks, and the decrease in prices of Meat and Other Parts of Slaughtered Land Animals. Likewise, Furnishings, Household Equipment and Routine Household Maintenance registered a decrease at 2.6 percent in June 2023 from 3.0 percent in May 2023 due to the slower rate of increase in prices of Furniture, Furnishings and Loose Carpet, Small Household Appliances, Repair, Installation and Hire of Household Appliances, and Domestic Services and Household Services, and the faster rate of decrease in prices of Glassware, Tableware and Household Utensils. Further, a 3.3 percentage points decrease was recorded in the inflation rate of Restaurants and Accommodation Services from 5.1 percent in May 2023 to 1.8 percent in June 2023. This was driven by the slower rate of increase in prices of Restaurants, Café and the Like. Moreover, a 0.1 percentage point decrease was recorded in the inflation rates of Alcoholic Beverages and Tobacco (8.0 percent from 8.1 percent) and Personal Care, and Miscellaneous Goods and Services (3.6 percent from 3.7 percent). The former was due to the slower rate of increase in prices of Spirits and Liquors, Beer, and Tobacco, and the decrease in prices of other Non-food commodities while the latter was due to the slower rate of increase in prices of Hairdressing Salons and Personal Grooming Establishments. Meanwhile, a 0.2 percentage point decrease was recorded in the inflation rates of Clothing and Footwear (1.0 percent from 1.2 percent) and Recreation, Sport and Culture (1.5 percent from 1.7 percent). The former was due to the slower rate of increase in prices of Clothing Materials, Garments, Other Articles of Clothing and Clothing Accessories, Cleaning, Repair, Tailoring and Hire of Clothing, and Shoes and Other Footwear while the latter was due to the slower rate of increase in prices of Stationery and Drawing Materials. On the other hand, a 0.2 percent deflation in June 2023 was recorded in Housing, Water, Electricity, Gas and Other Fuels from an inflation rate of 0.2 percent in May 2023 which was caused by the slower rate of increase in prices of Security Equipment and Materials for the Maintenance and Repair of the Dwelling, Services for the Maintenance, Repair and Security of the Dwelling, and Water Supply, and the faster rate of decrease in prices of Electricity, and Liquid Fuels. Likewise, Information and Communication recorded a deflation at 0.1 percent in June 2023 from an inflation rate of zero percent in May 2023 due to the faster rate of decrease in prices of Information Processing Equipment. Meanwhile, Transport further recorded a deflation of 5.7 percent in June 2023 from a deflation of 4.3 percent in May 2023 which was driven by the slower rate of increase in prices of Passenger Transport by Air and the faster rate of decrease in prices of Fuels and Lubricants for Personal Transport Equipment. 

      The three (3) other major commodity groups maintained their inflation rates from their previous months’ rate. These are Health with 3.2 percent inflation rate; Education Services with 0.9 percent inflation rate; and Financial Services with zero percent inflation rate. 

      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 June 2023 was 118.6. This implies that the average retail price of goods and services in Leyte is 18.6 percent higher than the average retail prices in 2018 (base year). 

Purchasing Power of Peso (PPP) retains at 84 centavos in June 2023.

The Purchasing Power of Peso (PPP) in Leyte remained at 84 centavos in June 2023. Likewise, the PPP in the region retained at 84 centavos in June 2023. The 84 centavos purchasing power of peso in Leyte indicates that the same basket of goods and services worth 84 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.

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. 

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. 

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. 

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.

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, Christm as sales, etc. 

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. 

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.

SGD. ROMIL C. ALINSUB
Statistical Specialist II
Officer-In-Charge