Headline Inflation
The region’s headline inflation or overall inflation slowed down further to 2.8 percent in September 2024. This is the lowest inflation rate since the 2.7 percent inflation rate recorded in January 2022. The inflation rate in August 2024 was recorded at 4.2 percent. This brings the regional average inflation from January to September 2024 to 3.7 percent. In September 2023, the inflation rate was higher at 5.6 percent.
Main Drivers to the Downward Trend of the Headline Inflation
The downtrend in the overall inflation in September 2024 was primarily brought about by the slower annual increment in the index of food and non-alcoholic beverages at 2.4 percent in September 2024 from 5.4 percent in the previous month. Also contributing to the downtrend was transport with a slower year-on-year increase of 0.8 percent during the month from a 2.6 percent annual increase in August 2024.
Lower annual increments were also noted in the indices of the following commodity groups during the month:
a. Information and communication, 3.7 percent from 4.2 percent;
b. Education services, 3.2 percent from 5.5 percent; and
c. Restaurants and accommodation services, 2.7 percent from 2.9 percent.
In contrast, the following commodity groups registered higher inflation rates during the month:
a. Clothing and footwear, 4.6 percent from 4.5 percent;
b. Housing, water, electricity, gas and other fuels, 4.5 percent from 3.7 percent;
c. Furnishings, household equipment and routine household maintenance, 3.5 percent from 3.3 percent;
d. Health, 2.2 percent from 1.9 percent;
e. Recreation, sport and culture, 5.5 percent from 4.8 percent; and
f. Personal care, and miscellaneous goods and services, 3.7 percent from 6 percent.
The indices of alcoholic beverages and tobacco and financial services retained their respective previous month’s inflation rates in September 2024.
Main Contributors to the Headline Inflation
The top three commodity groups contributing to the August 2024 overall inflation were the following:
a. Food and non-alcoholic beverages with 37.2 percent share or 1.0 percentage point;
b. Housing, water, electricity, gas and other fuels with 28.3 percent share or 8 percentage point; and
c. Restaurants and accommodation services with 5.9 percent share or 0.2 percentage point.
Food Inflation
Food inflation at the regional level eased to 2.3 percent in September 2024 from 5.4 percent in the previous month. In September 2023, food inflation was higher at 10.7 percent.
Main Drivers to the Downward Trend of Food Inflation
The deceleration of food inflation in September 2024 was primarily brought about by the slower inflation rate of rice at 10.9 percent in September 2024 from 21.1 percent in the previous month. This was followed by vegetables, tubers, plantains, cooking bananas and pulses with a faster year-on-year decline of 18.6 percent during the month from 5.5 percent annual decrease in August 2024.
Moreover, lower inflation rates during the month were noted in the following food groups:
a. Corn, 6.8 percent from 8.8 percent;
b. Flour, bread and other bakery products, pasta products, and other cereals, 1 percent from 4.5 percent;
c. Fruits and nuts, 1.7 percent from 2.9 percent; and
d. Ready-made food and other food products not elsewhere classified, 6.0 percent from 6.2 percent.
On the contrary, faster year-on-year increases were observed in the indices of meat and other parts of slaughtered land animals at 6.1 percent from 4.7 percent in the previous month, and milk, other dairy products and eggs at 4.9 percent from 4.0 percent in August 2024.
Moreover, slower annual decrements were noted during the month in the indices of fish and other seafood at 2.9 percent, and oils and fats at 2.2 percent from their respective year-on-year decreases of 3.7 percent and 4.3 percent in August 2024. Sugar, confectionery and desserts exhibited a faster year-on-year decline at 7.3 percent during the month from 6.4 percent annual decrease in the previous month.
Main contributors to the Food Inflation
Food inflation shared 33.4 percent or 0.9 percentage point to the overall inflation in September 2024. The top three food groups in terms of contribution to the food inflation during the month were the following:
a. Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, with a share of 114.4 percent or 2.6 percentage points;
b. Meat and other parts of slaughtered land animals with a share of 33.3 percent or 8 percentage point; and
c. Milk, other dairy products and eggs with a share of 13.7 percent or 0.3 percentage point.
DEFINITIONS AND CONCEPTS
Consumer 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 2012 market basket was determined based on the results of the 2018 update of the 2012 basket. Provinces and selected cities had own market baskets.
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 Consumer 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 .
