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 February 2023 was 117.1. Comparing to the January 2023, index for the city decreased by 0.6 points.

CPI by Commodity Groups

• Among the commodity groups, Financial Services still had the highest CPI at 135.4 index points, same index from the previous months.
   
• Alcoholic Beverages and Tobacco had the second highest CPI at 135.1 index points, increased by 0.1 index points from the previous month.

• Food and Non-Alcoholic Beverages ranked third among the commodity groups in the city at 129.7 index points. It decreased by 2.7 index points comparing from the previous month.
   
• 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.

Similar to the trend of the inflation at the national and regional level, inflation in Baguio City further decreased to 6.1 percent in February 2023, from 7.1 percent in January 2023. In February 2022, inflation was lower at 3.6 percent.

The main driver in the downtrend of inflation in February 2023 was the higher year-on-year decrease in the index of food and non-alcoholic beverages at 12.6 percent, from 15.8 percent in January 2023.  This was followed by transport at 12.6 percent, from 15.9 percent, and clothing and footwear at 0.5 percent, from 0.6 percent in the previous month.

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

1. Housing, water, electricity, gas and other fuels, 2.7 percent;
2. Furnishing, household equipment and routine household maintenance, 1.5 percent;
3. Health, 2.8 percent;
4. Recreation, sport and culture, 3.8 percent; and
5. Restaurants and accommodation services, 1.8 percent.

Meanwhile, the indices of alcoholic beverages and tobacco, information and communication, and personal care, and miscellaneous goods and services remained at their previous month’s annual rates of 10.2, 0.5, and 5.5 percent, respectively. Moreover, education services and financial services remained at 0.0 percent inflations rates.

Food inflation at the provincial level decreased to 13.0 percent in February 2023, from 16.6 percent in January 2023. In February 2022, food inflation stood at 6.5 percent.

The lower food inflation was mainly brought about by the decreased year-on-year index of vegetables, tubers, plantains, cooking bananas and pulses at 44.4 percent in February 2023, from 72.1 percent in January 2023. It was followed by fruits and nuts at 9.1 percent, from 12.7 percent, and rice at 6.6 percent, from 7.1 percent in the previous month. Moreover, decreased were observed in the indices of the following food groups during the month:

1. Cereals, 7.8 percent;
2. Meat and other slaughtered land animals, 3.3 percent;
3. Fish and other seafoods, 7.7 percent;
4. Oils and fats, 9.1 percent;
5. Sugar, confectionery and desserts, 28.8 percent; and
6. Ready-made food and other food products n.e.c, 6.8 percent.

Meanwhile, increased were observed in the indices of the following food groups in February 2023:

1. Corn, 49.2 percent;
2. Flour, bread and other bakery products, pasta products, and other cereals, 11.5 percent; and
3. Milk, other dairy products and eggs, 16.3 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 remained at 85 centavos in February 2023. This can be translated that one peso in 2018 was worth 85 centavos in February 2023.

- 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.

IMELDA L. BUYUCCAN
Chief Statistical Specialist