Inflation, All Items

Inflation in the province of Sorsogon moved faster to 2.0 percent in August 2024, from 1.3 percent in the previous month. In 2023 of the same month, inflation was posted at 3.6 percent. This brings the provincial average inflation rate from January to December 2024 at 1.6 percent. (Tables A and B, and Figure 1)

The upward trend in the inflation was due to the faster annual increase in the indices for Housing, water, electricity, gas and other fuels with 3.8 percent, Health with -0.4 percent, Restaurants and accommodation services with 1.5 percent and Personal care, and miscellaneous goods and services with 2.8 percent.

Meanwhile, commodity groups with lower inflation were: Food and nonalcoholic beverages with 2.1 percent, Clothing and footwear with 0.6 percent, Furnishing, household equipment and routine maintenance of the house with 0.6 percent, Transport with -1.0 percent, Recreation, sport and culture with 1.6 percent, and Education services with 17.4 percent. Other commodity groups not stated remained at the same rate.

Food Inflation

Food inflation in the province moved slower at 2.0 percent from 5.1 percent on previous month. In the same month of the previous year, food inflation was noted at 8.2 percent.

Lower annual growth rates of the indices were seen in the following commodity groups:

1. Cereals and cereal products, 10.4 percent;
2. Fish and other seafood, -10.5 percent;
3. Vegetables, tubers, plantains, cooking bananas and pulses, -5.4 percent;
4. Sugar, confectionery and desserts, -7.2 percent; and
5. Ready-made food and other food products, n.e.c., 5.8 percent.

Higher inflation were seen in the indices of the following food groups:

1. Meat and other parts of slaughtered land animals, 3.8 percent;
2. Milk, other dairy products and eggs, 4.5 percent;
3. Oils and fats, -1.7 percent; and
4. Fruits and Vegetable juices, 1.6 percent.

Purchasing Power of the Peso

The purchasing power of peso (PPP) in the province of Sorsogon was at 0.79 pesos this month. This means that a peso in 2018 is worth 79 centavos in August 2024. The PPP last month and a year ago was also at 0.81 pesos.

COMPONENTS OF CPI:

A. Base Period      
The reference date or base period is the benchmark or reference date or period at which the index is taken as equal to 100. Starting February 2022, the base period is 2018.

B. Market Basket      
A sample of the thousands of varieties of goods purchased for consumption and services availed by the households in the country selected to represent the composite price behaviour of all goods and services purchased by consumers.

C. Weighting System      
The weighting pattern uses the expenditures on various consumer items purchased by households as proportion to total expenditure.

D. Formula      
The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2018) weights.

E. Geographic Coverage      
CPI values are computed at the national, regional, and provincial levels, and for selected cities.

INFLATION RATE      
The inflation rate is the annual or monthly rate of change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of money.

HEADLINE INFLATION RATE      
The headline inflation rate refers to the rate of change in the CPI, a measure of the average standard “basket” of goods and services consumed by a typical family.

YEAR-ON-YEAR INFLATION RATE      
Year-On-Year Inflation Rate is the annual percentage change of CPI. For example, the percentage change of CPI between August 2023 and August 2024.

MONTH-ON-MONTH INFLATION RATE      
Month-On-Month Inflation Rate is the monthly percentage change of CPI. For example, the percentage changes of CPI between August 2024 and July 2024.

PURCHASING POWER OF PESO (PPP)      
The purchasing power of peso (PPP) shows how much peso in the base period is worth in the current period. It is computed as the reciprocal of the CPI for the period under review multiplied by 100.

For example, the PhP 1.00 in 2018 is valued only at PhP 0.78 in 2023.