Consumer Price Index in NCR increases to 116.6 percent

The CPI in NCR grew by 0.5 percentage point to reach 116.6 percent this December 2022 from 116.1 percent in November 2022.   On yearly basis, the CPI increased by 8.2 percentage points during the month from 108.4 percent in December 2021.  The CPI in NCR consistently remained below the Philippines’ record of 119.4 percent this month which also grew by 0.4 percentage points from 119.0 percent in the previous month.  Across all regions, the CPI in NCR remained the second lowest among the 17 regions with Central Visayas registering the lowest at 114.7 percent.  On the other hand, MIMAROPA Region remained the region with the highest CPI at 124.5 percent in December 2022.  Meanwhile, Western Visayas registered the highest increase in CPI this month with 1.3 percentage points as it reached 122.3 percent from 121.0 percent in November 2022.

The CPI of 116.6 in December 2022 indicated that consumer prices, on average, had increased by 16.6 percent from the base year 2018.  This 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 PhP116.6 in December 2022. (Figure 1)

Inflation rate in NCR move faster at 7.6 percent

The inflation rate in NCR moved faster at 7.6 percent in December from 7.5 percent in the previous month.  In December 2021, the inflation rate was lower at 2.1 percent with this month’s inflation, the average inflation rate in NCR went up to 5.1 percent in 2022 from 2.7 percent in 2021. (Figure 2)

Across all regions, Region VI (Western Visayas) registered the highest inflation rate at 10.5 percent followed by Region XI (Davao Region) at 9.3 percent and Region III (Central Luzon) at 9.0 percent. On the other hand, regions with the lowest inflation rates were BARMM at 6.3 percent followed by Region IV-A (CALABARZON) and Region XII (SOCCSKSARGEN) with both 7.1 percent. (Figure 3)

At the national level, the headline inflation rate for the Philippines showed an uptrend of 8.1 percent from 8.0 percent inflation in November 2022.  This is the highest inflation rate reported for 2022 and the highest since November 2008. The average inflation rate at the national level for 2022 stood at 5.8 percent, higher than the 2021 average inflation rate of 3.9 percent.

Index of Restaurants and Accommodation Services influences faster inflation in NCR

Faster inflation in NCR in December 2022 was mainly influenced by higher annual increments in the indices of restaurants and accommodation services with 9.5 percent from 8.8 percent in the previous month.  Another major contributor to the uptrend was the indices of housing, water, electricity, gas and other fuels with 4.0 percent inflation this month from 3.7 percent in November 2022. Other commodity groups with higher year-on-year mark-ups in December 2022 were the following:

1. Furnishings, household equipment and routine household maintenance,4.5  percent;
2. Health, 1.4 percent;
3. Information and communication, 0.4 percent; and
4. Recreation, sport and culture, 3.2 percent.

On the other hand, slower annual increments were registered in the indices of alcoholic beverages and tobacco at 7.2 percent, and transport at 14.0 percent. The indices of the rest of the commodity groups retained their respective annual growth rates in November 2022. (Table 1)

Inflation of food stays at 11.8 percent

The inflation of the food index stayed at 11.8 percent in December 2022 which was at the same level in November 2022.  Inflation this month was primarily brought by a faster year-on-year growth rate in the index of vegetables, tubers, plantains, cooking bananas and pulses at 49.6 percent, fruits and nuts at 13.3 percent, and rice at 1.1 percent.  Other food commodity groups that showed faster inflation were the following:

1. Corn, 21.2 percent;
2. Flour, bread and other bakery products, pasta products,  and other cereals, 13.2 percent;
3. Sugar, confectionery and desserts, 26.9 percent; and
4. Ready-made food and other food products n.e.c., 12.9 percent.

On the other hand, lower annual hikes were noted in the indices of the following food commodity groups during the month:

1. Meat and other parts of slaughtered land animals, 4.9 percent;
2. Fish and other seafood, 13.5 percent;
3. Milk, other dairy products and eggs, 13.5 percent; and
4. Oils and fats, 22.4 percent. (Table 2)

Purchasing Power of the Peso (PPP) remains at 0.86

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. 

The PPP in NCR in December 2022 remained at 0.86 which is at the same level as that in November 2022.  The PPP in December 2021 was higher at 0.92. (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.