Concepts and Definitions
Consumers’ Price Index - a statistical measure of the change in average retail prices of a fixed basket of goods and services bought by a specific group of consumers in a given area in a given period of time.
Purchasing Power of the Currency or Peso (PPP ) - a measure of the volume of goods and services which the currency can buy at any given period relative to that which it could purchase during the base year. It is computed as the reciprocal of the CPI for the period under review multiplied by 100.
Market Basket - the total number of goods and services in constant amounts and qualities which are samples of the goods and services available in the market and included in the construction of the index. CPI market basket was selected to represent the composite price behavior of all goods and services purchased by consumers. Composition of the 2000 market basket was determined based on the results of the 2000 update of the 1994 basket. Provinces and selected cities had own market baskets. The total number of goods and services in the market basket across the Bicol provinces for the 2000-based CPI were – Albay, 624; Camarines Norte, 508; Camarines Sur, 571; Catanduanes, 434; Masbate, 516; and Sorsogon, 485.
Base Year - it identifies the base period with which the index relates. It is a period of time chosen as reference on which a price index is computed. The index for the base year is 100.
Retail Price - 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.
Percent Change - the percent point change expressed as percent of the index of the earliest date.
Inflation Rate - the annual rate of change or the year-on-year change of the CPI. Inflation is interpreted in terms of declining purchasing power of money.
Note to Users:
The monthly Consumers Price Index is computed based on the average retail prices of goods and services collected during the first week and mid-month of the reference month.