Leyte’s inflation rate continues to slow down at 3.7 percent in May 2023

     Leyte’s inflation rate continued to decline at 3.7 percent in May 2023. This is the lowest recorded inflation rate of the province since May 2022. Leyte’s inflation rate during the same period last year was higher at 6.7 percent. Likewise, the region’s inflation rate further declined at 4.2 percent in May 2023 from 4.7 percent in April 2023. All other provinces and HUC in Eastern Visayas also registered a decrease in their respective inflation rates for this month.

     The decline in Leyte’s May 2023 inflation rate was due to the downtrend in annual rate of change of CPI of seven (7) major commodity groups. The inflation rate for Clothing and Footwear decreased at 1.2 percent in May 2023 from 1.7 percent in April 2023. This was driven by the slower rate of increase in prices of Clothing Materials, Garments, and Shoes and Other Footwear. Likewise, Housing, Water, Electricity, Gas and Other Fuels registered a decrease in its inflation rate at 0.2 percent in May 2023 from 2.0 percent in April 2023 due to the slower rate of increase in prices of Security Equipment and Materials for the Maintenance and Repair of Dwelling, Water Supply, and Solid Fuels, the decrease in prices of Electricity, and the faster rate of decrease in prices of Gas and Liquid Fuels. Further, a 0.4 percentage point decrease was recorded in the inflation rate of the following: Furnishings, Household Equipment and Routine Household Maintenance (3.4 percent to 3.0 percent); Information and Communication (0.4 percent to 0.0 percent); and Personal Care, and Miscellaneous Goods and Services (4.1 percent to 3.7 percent). The first was due to the slower rate of increase in prices of Household Textiles, Major Household Appliances, whether electric or not, Small Household Appliances, Domestic Services and Household Services, and the faster rate of decrease in prices of Glassware, Tableware and Household Utensils. The second was caused by the slower rate of increase in prices of Equipment for the Reception, Recording and Reproduction of Sound and Vision and the decrease in prices of Information Processing Equipment. The third was due to the slower rate of increase in prices of Other Appliances, Articles and Products for Personal Care, Hairdressing Salons and Personal Grooming Establishments, and Other Personal Effects. Moreover, Recreation, Sport and Culture registered a decrease in its inflation rate at 1.7 percent in May 2023 from 2.0 percent in April 2023 due to the slower rate of increase in prices of Garden Products, Plants and Flowers, Pets and Products for Pets, and Stationery and Drawing Materials. Transport further recorded a deflation of 4.3 percent in May 2023 from a deflation of 1.0 percent in April 2023 due to 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.

    On the other hand, three (3) major commodity groups recorded an increase in their respective inflation rates in May 2023. Alcoholic Beverages and Tobacco registered an increase at 8.1 percent in May 2023 from 5.3 percent in April 2023 caused by the faster rate of increase in prices of Spirits and Liquors and Tobacco, and the slower rate of decrease in prices of Wine. Health recorded a slight increase at 3.2 percent in May 2023 from 3.0 percent in April 2023 due to the faster rate of increase in prices of Medicines. Moreover, Restaurants and Accommodation Services recorded an increase at 5.1 percent in May 2023 from 4.5 percent in April 2023 due to the faster rate of increase in prices of Restaurants, Café and the like. 

     The three (3) other major commodity groups maintained their inflation rates from their previous months’ rate. These are Food and Non-Alcoholic Beverages with 7.1 percent; Education Services with 0.9 percent; 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 May 2023 was 119.0. This implies that the average retail price of goods and services in Leyte is 19.0 percent higher than the average retail prices in 2018 (base year).

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

      The Purchasing Power of Peso (PPP) in Leyte remained at 84 centavos in May 2023. Meanwhile, the PPP in the region increased at 84 centavos in May 2023 from 83 centavos in April 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, Christmas 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. BERNADETTE R. MONTANA
Supervising Statistical Specialist
Officer-In-Charge