Special Release on Summary Inflation Report and Consumer Price Index: May 2022

Reference Number: 

2022-SR-13-008

Release Date: 

Wednesday, June 8, 2022

Consumer Price Index in NCR slightly increases by 0.6 percentage point from its previous month's level

The Consumer Price Index this May 2022 in NCR stands at 110.9 which has slightly increased by 0.6 percentage point from the previous month's record of 110.3 percent.  On yearly basis, the CPI grew by 5.0 percentage points in May 2022 from 105.9 in May 2021.  The CPI in NCR consistently remained below the Philippine’s record of 113.9.  Across all regions, the CPI in NCR was still the second-lowest among the 17 regions with Central Visayas garnering the least at 110.2.  On the other hand, Bicol Region registered the highest CPI with 118.4.

The CPI of 110.9 in May 2022 indicated that consumer prices, on average, have increased by 10.9 percent from the base year 2018. lt can also be interpreted that a basket of commodities that can be purchased at PhP100.00 by an average Filipino household in NCR in 2018 can be bought at PhP110.9 in May 2022. (Figure 1)

 

Inflation rate in NCR rises further to 4.7 percent

The Inflation rate in NCR rose further to 4.7 percent in May 2022 compared to 4.4 percent in the previous month. In May 2021, Inflation rate was lower at 2.6 percent. The average Inflation rate from January to May 2022 stood at 3.1 percent. (Figure 2)

 

Across all regions, NCR together with SOCCSKSARGEN recorded a 4.7 percent inflation rate in May 2022 making both regions in 3rd place with lower inflation rate. The lowest inflation rate was observed in Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) with 2.4 percent while Cordillera Administrative Region (CAR) registered the highest with 6.9 percent.  Headline inflation in the Philippines was observed at 5.4 percent.  (Figure 3)

 

 

Food and non-alcoholic beverages still contribute largely to the faster inflation in NCR

The increase in the region’s inflation was largely brought about by the higher inflation of food and non-alcoholic beverages with 4.6 percent.  The higher inflation was also influenced by higher inflation in Transport with 13.8 percent and Restaurants and Accommodations Services at 3.3 percent.

In addition, what contributed to the uptrend in the overall inflation during the period were faster annual increments in the indices of the following commodity groups as compared with their previous month’s inflation rates:

a. Alcoholic beverages and tobacco, 6.5 percent;
b. Personal care, and miscellaneous goods and services, 2.2 percent
c. Health, 1.9 percent
d. Clothing and Footwear, 1.2 percent
e. Recreation, Sport and Culture, 1.0 percent

The rest of the commodity groups either retained their previous month's inflation or had zero percent annual growth. (Table 1)

 

Annual growth rate in the food index increased further to 5.0 percent in May 2022, from 3.6 percent in the previous month. In May 2021, the food index had 3.3 percent inflation.

The inflation rate of vegetables, tubers, plantains, cooking bananas, and pulses increases further to 20.1 percent in May 2022 from 14.2 percent in the previous month. In addition, Meat and other parts of slaughtered animals’ food commodity group also increased to 4.9 percent, and Fish and other seafood food commodity group also increased to 7.5 percent in May 2022.

The following food commodity groups also exhibited higher annual increments in May 2022:

  1. Flour, bread and other bakery products, pasta products, and other cereals, 7.0 percent
  2. Ready-made food and other food products n.e.c., 5.8 percent
  3. Milk, other dairy products, and eggs, 2.7 percent
  4. Sugar, confectionery and desserts, 7.5 percent
  5. Oils and Fats, 13.3 percent

On the other hand, the inflation on cereals index decreased by -0.2 percent in May 2022.  Similarly, the rice index eased down to -0.3 percent from a -0.2 percent inflation last month.  Meanwhile, the fruits and nuts index slightly increase but is still negative at -10.5 percent inflation from -12.1 percent during April 2022. (Table 2)

Purchasing Power of the Peso (PPP) skids to 0.90

The PPP is a measure of the real value of the peso in a given period relative to a chosen reference and is computed by getting the reciprocal of the CPI and multiplying the result by 100.  The PPP is inversely related to the CPI thus an increase in the CPI will result in a decrease in the PPP. 

In May 2022, the PPP in NCR slightly dropped to 0.90 from previous month’s level of 0.91.  The increase in CPI between the period April and May 2022 slightly affected the PPP in NCR.  Meanwhile, the PPP in May 2021 was at 0.94. (Figure 4)

 

 

        (SGD.)
PACIANO B. DIZON

Regional Director

 

 

 

TECHNICAL NOTES

Consumer Price Index

The Consumer Price Index (CPI) is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households for their day-to-day consumption relative to a base year.

 

Components of the CPI

  1. Base Period

This is a reference date or simply a convenient benchmark to which a continuous series of index numbers can be related. Since the CPI measures the average changes in the retail prices of a fixed basket of goods, it is necessary to compare the movement in previous years back to a reference date at which the index is taken as equal to 100. The present series of CPI uses 2018 as the base period or base year.

 

  1. Market Basket

Market basket refers to a sample of goods and services commonly purchased by the households.

 

The commodities included in the 2018-based CPI market basket are the modal

commodities which were considered as the most commonly purchased/availed of commodities by the households.  The composition of the market basket was determined based on updating the 2012 basket using the results of the 2021 Survey of Key Informants (SKI).  In NCR, a total of 760 commodities are included in the market basket.

 

  1. Weighting System

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 commodity/group of commodities is the proportion of the expenditure of the expenditure of commodity/group of commodities to the total national expenditure. The sum of the weights of the commodity groups at the national level is equal to 100.

 

Inflation Rate

The inflation rate is the annual rate of change or the year-on-year change in the Consumer Price Index.

 

Purchasing Power of the Peso

The Purchasing Power of the Peso (PPP) is a measure of the real value of the peso in a given period relative to a chosen reference period. It is computed by getting the reciprocal of the CPI and multiplying the result by 100.

 

 

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