Consumer Price Index

Consumer Price Index (CPI) is the general measure of the change in the average retail prices of a market basket or collection of goods and services commonly purchased by the average Filipino household.

The CPI of the City of Baguio in July 2023 was 116.2. Comparing to June 2023, index for the city increased by 0.2 points.

CPI by Commodity Groups

• Among the commodity groups, Alcoholic Beverages and Tobacco still had the highest CPI at 138.2 index points, increased by 1.0 points from the previous month.
• Financial Services still had the second highest CPI at 135.4 index points.
• Food and Non-Alcoholic Beverages remained the third among the commodity groups in the city at 128.5 index points, increased by 0.8 index points.
• Meanwhile, Information and Communication still had the lowest CPI among the commodity groups at the provincial level with 102.2 index points.

Inflation Rate

Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. A chief measure of price inflation is the inflation rate, the annualized percentage change in CPI over time.

Following the trend of the inflation at the national and regional level, inflation in Baguio City further slowed down to 2.4 percent in July 2023, from 2.7 percent in June 2023. In July 2022, inflation was higher at 6.0 percent.

The main driver in the downtrend of inflation in July 2023 was transport at -3.5 percent, from 0.3 percent in June 2023.  This was followed by health at 1.7 percent, from 2.5 percent, and personal care, and miscellaneous goods and services at 3.8 percent, from the 4.4 percent in the previous month.

Relative to their annual rates in the previous month, decreases were also observed in the indices of the following commodity groups:

1. Alcoholic beverages and tobacco, 5.4 percent from 7.4 percent;
2. Clothing and footwear, 0.9 percent from 1.0 percent; and
3. Recreation, sport and culture, 3.4 percent from 3.7 percent.

On the contrary, increases were observed in the index of the following:

1. Food and non-alcoholic beverages, 8.4 percent from 8.1 percent;
2. Housing, water, electricity, gas and other fuels, -0.1 percent from -0.3 percent; and
3. Furnishing, household equipment and routine household maintenance, 1.7 percent from 1.5 percent.

Meanwhile, the following commodity groups remained at their previous month’s annual rates:

1. Information and communication;
2. Education services;
3. Restaurants and accommodation services; and
4. Financial services.

Food inflation at the city level increased to 8.7 percent in July 2023, from 8.4 percent in June 2023. In July 2022, food inflation stood at 11.1 percent.

The higher food inflation was mainly brought about by vegetables, tubers, plantains, cooking bananas and pulses at 32.4 percent this month from the 19.1 percent in June 2023.

On the other hand, the following food groups had lower rates this month:

1. Rice, 4.2 percent from 5.1 percent;
2. Corn, 56.7 percent from 67.3 percent;
3. Flour, bread and other bakery products, pasta products, and other cereals, 11.1 percent from 11.4 percent;
4. Meat and other parts of slaughtered land animals, -0.5 percent from 0.9 percent;
5. Fish and other seafood, 4.5 percent from 5.7 percent;
6. Milk, other dairy products and eggs, 12.1 percent from 15.2 percent;
7. Oils and fats, 4.4 percent from 5.6 percent;
8. Fruits and nuts, 6.6 percent from 8.3 percent; and
9. Sugar, confectionery and desserts, 17.4 percent from 22.7 percent.

Ready-made food and other food products n.e.c, was the only food group which retained its inflation rate this month at 5.9 percent.

Purchasing Power of the Peso (PPP)

Purchasing Power of Peso is a measure of the real value of peso in a given period relative to the base year. The nearer the base year to the current period, the higher the value of the peso derived. As the period goes farther from the base year, the value of peso diminishes as this is “eaten up” by the inflationary factors.

The value of 1 peso in the city was still 86 centavos in July 2023. This can be translated that one peso in 2018 was worth 86 centavos in July 2023.

IMELDA L. BUYUCCAN

Chief Statistical Specialist

/SMBP

*****

TECHNICAL NOTES

Consumer Price Index (CPI) is a general measure of the change in the average retail prices of a market basket or collection of goods and services commonly purchased by the average Filipino household.

Inflation Rate (IR) is the rate of change in the average price level between two periods (year-on year/month-on-month as measured by the CPI).

Purchasing Power of the Peso (PPP) measures how much the peso in the reference year is worth in another year.

Base Year (BY) is the reference point of the index number series, at which the index number is set to 100. It is the reference point of the index number series.

The CPI is now rebased from base year 2012 to base year 2018. The rebasing of the CPI is done periodically by the PSA:

1. to ensure that the CPI market basket continues to capture goods and services commonly purchased by households over time;
2. to update expenditure patterns of households; and
3. to synchronize its base year with 2018 base year of the Gross Domestic Product and other indices produced by PSA such as Producer Price Index (PPI) for Agriculture; PPI for Manufacturing; and Value of Production Index (VaPI), Volume of Production Index (VoPI), and Value of Net Sales Index (VaNSI) for Manufacturing.

The rebasing of the CPI is also in accordance with the PSA Board Resolution No.1 Series 2017-146 which approves the synchronized rebasing of the price indices to base year 2006 and every six (6) years thereafter.

Market Basket (MB) is a sample of goods and services used to represent all goods and services produced or bought.