CPI

Technical Notes on the Seasonal Adjustment of CPI

I. INTRODUCTION

Consumer Price Index (CPI) provides a general measure of the changes in average retail prices of commodities bought by specific group of consumers in a given area and in a given period of time. It mainly measures the composite change in the retail prices of the various commodities over time.

II. SEASONALITY

The seasonal adjustment of a time series mainly refers to the isolation of seasonal fluctuations, leaving the basic trend of the observed series. Seasonal fluctuations can be due to composite effect of climates and institutional events which repeat more or less regularly each year. Specific factors that may affect the CPI include seasonality due to production cycles, demand due to school year or holidays, and practices such as increase in rental rates during the beginning of the year. After the removal of seasonal variations, the resulting series is referred to as the seasonally adjusted series or the deseasonalized series. By removing the effects of seasonality on the CPI series, analysis can be made on a month-on-month basis. Thus, seasonal adjustment allows comparisons over recent months and gives short-term trend movements for the series. In general, if seasonally adjusted CPI levels are lower than the unadjusted series, it means that seasonal factors push up prices relative to the expected trend.

III. SEASONALITY IN THE CPI

The over-all CPI is tabulated using six major commodity groups in the Philippines, Metro Manila (MM) and Areas Outside Metro Manila (AOMM). The six groups are: Food, Beverages and Tobacco; Clothing; Housing and Repairs; Fuel, Light and Water; Services; Miscellaneous. The last five groups listed comprise the non-food items. Initially, the CPI series for all items as well as the Food, Beverages and Tobacco (FBT), and non-food items for MM and AOMM were tested for the presence of seasonality assuming stability. In MM and AOMM, presence of stable seasonality were observed both for FBT and Non-food items. However, the CPI for all items indicated that there is no seasonality in the series mainly due to the exhibited opposite direction of peaks and troughs of the FBT and non-food items, thus, canceling out. Presence of stable seasonality though, was observed both for FBT and non-food items when analyzed separately. The current seasonally adjusted series are based on X11ARIMA88 built-in model (Multiplicative with log-transformation (0,1,1)(0,1,1) and Additive (0,1,1)(0,1,1)) fit to the 2001 data series.

Consumer Price Index for all Income Households in Bicol Region: July 2017

The Bicol Region’s inflation rate in July 2017 slipped at 5.0 percent. Compared to the 1.0 percent inflation rate in the same period last year, the July 2017 rate was higher by 4.0 percentage points.

The Transport Service group made a great impact on this month’s Inflation Rate situation (0.4 percent from 4.6 percent). Furnishings, Households Equipment and Routine Maintenance of the House group also went down (1.5 percent from 1.7 percent)

Consumer Price Index for all Income Households in Bicol Region: March 2017

The Bicol Region’s inflation rate in March 2017 skyrocketed at 4.4 percent from 3.9 percent in February 2017. Compared to the 0.1 percent inflation rate in the same period last year, the March 2017 rate was higher by 4.3 percentage point.

The sustained upsurge is credited on the following Commodity/Service groups, Housing, Water, Electricity, Gas and Other Fuels (3.3 percent from 1.9 percent), Food and Non-Alcoholic Beverages (6.5 percent from 5.8 percent), Alcoholic Beverages and Tobacco (3.5 percent from 3.3 percent) and Communication (0.5 percent from 0.3 percent)

Transport Commodity/Service group went on a slumped down (-0.5 percent from 2.9 percent) and among other Commodity/Service groups on this trend are Clothing and Footwear (1.5 percent from 1.6 percent), Furnishings, Household Equipment and Routine Maintenance of the House (1.5 percent from 1.7 percent), Health (1.4 percent from 1.5 percent).

Meanwhile, Recreation and Culture went steady at 0.7 percent along with Education and Restaurants and Miscellaneous Goods and Services pegged at 0.5 percent and 2.9 percent respectively.

The Bicol Region’s Inflation Rate went up at 4.4 percent from 3.9 percent. The province of Masbate increased to an all-time high of 4.9 percent and the highest in the Region. Albay, the second highest pegged at 4.7 percent. Camarines Sur followed at 4.6 percent. Camarines Norte and Sorsogon tied at 3.8 percent Inflation Rate for the month, while Catanduanes plunged to 2.2 percent from last month’s 2.6 percent.

Consumer Price Index for all Income Households in Bicol Region: January 2017

The Bicol Region’s inflation rate in January 2017 slightly dipped at 3.1 percent from 3.2 percent in December 2016. Compared to the -0.2 percent inflation rate in the same period last year, the January 2017 rate was higher by 3.0 percentage points.

The slight movement is attributed on the following Commodity/Service groups, Alcoholic Beverages and Tobacco (3.2 percent from 3.3 percent), Clothing footwear (1.5 percent from 1.7 percent), Housing, Water, Electricity, Gas and other Fuels (2.3 percent from 3.3 percent), Health (2.2 percent from 2.6 percent), Recreation and Culture (0.9 percent from 1.1 percent and Restaurants and Miscellaneous Goods and Services (3.2 percent from 3.8 percent).

On the other hand, Commodity/Service Groups that went up are Food and Non-Alcoholic Beverages (3.9 percent from 3.8 percent), Furnishings, Household Equipment and Routine Maintenance of the House (2.6 percent from 2.5 percent) and Communication (0.2 percent from 0.0 percent). Transport and Education Commodity/Service Group maintained its last month’s inflation rate at 1.9 percent and 0.5 percent respectively.

The Bicol Region’s Inflation Rate slightly dished at 3.1 percent from 3.2 percent. The province of Camarines Sur went up at 3.0 percent from 2.6 percent. The highest inflation rate though for Bicol Region is Masbate measured at 3.5 percent but it went down from last month’s Inflation Rate at 4.4 percent. All other Provinces also went down their Inflation rate, Albay at 3.4 percent from 3.7 percent, Camarines Norte at 3.3 percent from 3.6 percent, Catanduanes at 2.1 percent from 2.7 percent and Sorsogon at 2.6 percent from 2.8 percent.

Consumer Price Index for all Income Households in Bicol Region: December 2016

The Bicol Region’s inflation rate in December 2016 went up at 3.2 percent from 2.5 percent in November 2016. Compared to the -0.5 percent inflation rate in the same period last year, the November 2016 rate was higher by 2.0 percentage point.

The escalation is accredited on the following Commodity/Service groups, Food and Non- Alcoholic Beverages (3.8 percent from 2.3 percent), Housing, water, Electricity, Gas and other Fuels (3.3 percent from 2.7 percent). The biggest decline came from the Service Group which is Transport (1.9 percent from 3.1 percent). Slight decrease also noted on Alcoholic Beverages and Tobacco (3.3 percent from 3.4 percent), Clothing and Footwear (1.7 percent from 1.9 percent), Furnishings, Household Equipment and Routine Maintenance of the House (2.5 percent from 2.4 percent), Health (2.6 percent from 2.8 percent), Recreation and Culture (1.1 percent from 1.0 percent) and Restaurants and Miscellaneous Goods and Services (3.8 percent from 4.3
percent). Non- movers were Communication (0.0 percent) and Education (0.5 percent).

The Bicol Region’s Inflation Rate soared at 3.2 percent from 2.5 percent. The province of Masbate is at all-time high Inflation pegged at 4.4 percent from 3.0 percent. Albay also posted a significant increase (3.7 percent from 2.5 percent). Among other provinces increased inflation were Camarines Norte (3.6 percent from 3.5 percent), Camarines Sur (2.6 perent from 2.0 perent), Catanduanes (2.7 from 2.3 percent). Only Sorsogon retained its Inflation at 2.8 percent.

Consumer Price Index for all Income Households in Bicol Region: February 2015

The Bicol Region’s inflation rate in February 2015 was recorded at 2.5 percent from 3.2 percent in January 2015. Compared to the 5.5 percent inflation rate in the same period last year, the February 2015 rate was lower by 3.0 percentage points.

The heavily weighted Food and Non-Alcoholic Beverages (5.9 percent from 7.1 percent) and the Alcoholic Beverages and Tobacco (3.1 percent from 4.0 percent) exhibited significant decrease in their indexes. Among the non-food groups, the indices that displayed decrements include Health (0.8 percent from 1.1 percent), Recreation and Culture (0.5 percent from 0.7 percent), Restaurants and Miscellaneous Goods and Services (1.9 percent from 2.1 percent), and Furnishings, Household Equipment and Routine Maintenance of the House (2.6 percent from 2.7 percent).

Conversely, a 1.5 percentage points increase was observed in Transport (-1.1 percent from -2.6 percent) and Housing Water, Electricity, Gas and Other Fuels (-4.4 percent from -4.5 percent) slightly edged-up by 0.1 percentage point. Clothing and Footwear and Education maintained its previous month’s rate of 1.2 percent and 3.7 percent, respectively, while price levels for Communication remained steady with no movements from January to February 2015.

Across provinces, decreased inflation rates were felt in five out of six provinces of the region. Sorsogon posted the largest decline at 2.9 percent from 4.4 percent and Masbate with 1.9 percent from 3.3 percent. Only Albay showed an increase in inflation rate by 0.5 percentage point at 4.1 percent from 3.6 percent.

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