Central Luzon’s Consumer Price Index (CPI) for Bottom 30% Income Households (2012 = 100) July 2021

Reference Number: 

2021-SRCPIB30-Jul2021-052

Release Date: 

Thursday, September 2, 2021

Year-on-Year Price Index Situation for the month of July 2021

The year-on-year inflation rate for bottom 30% income household in Central Luzon was posted at 4.2 percent in July 2021 with 0.3 percentage point increase from last month’s 4.5 percent. On the other hand, it is higher by 0.6 percentage point than the recorded 3.6 percent in July 2020. (Figure 1)

                                   Source: Survey of Retail Prices of Commodities for the CPI, PSA

Central Luzon ranked 8th lowest inflation among the 17 regions in the country. The highest inflation rate was registered in Cagayan Valley at 6.6 percent, while Bangsamoro Autonomous Region in Muslim Mindanao still recorded the lowest inflation rate at 2.0 percent. The national inflation rate for the bottom 30 percent income household increased from 4.3 percent in June 2021 to 4.4 percent in July 2021. (Figure 2)

                                   Source: Survey of Retail Prices of Commodities for the CPI, PSA

Year-on-Year Price Change by Commodity Group

The significant decrease of 4.7 percentage points in the index on Transport pulled down the region’s inflation rate in July 2021. In addition, slower decreases on the following indices were recorded:

  • Food and Non-Alcoholic Beverage, 3.7 percent;
  • Alcoholic Beverages and Tobacco, 9.7 percent;
  • Clothing and Footwear, 3.6 percent;
  • Communication, 0.6 percent; and
  • Restaurant and Miscellaneous Goods and Service, 3.4 percent;

On the other hand, an increase in the indices of Housing, Water, Electricity, Gas and Other Fuels (1.9%) and Health (4.1%) were posted.  Recreation and Culture recorded slower decline from          -0.9 percent in June 2021 to -0.7 percent in July 2021.

Meanwhile, indices on Furnishing, Household Equipment and Routine Maintenance of the house (2.0%) and Education (0.1%) remained unchanged. (Table A)

Year-on-Year Price Change by Food Group

Faster rate of increase was recorded in the index of Vegetable at 3.6 percent in July 2021. Moreover, slower increases were posted in the indices of Corn at 0.8 percent, Oils and Fats at 5.8 percent, Fruits at 5.9 percent and Sugar, Jam, Honey, Chocolate and Confectionery at 2.1 percent.

A rapid increase in the index of Meat was recorded at 17.7 percent, a 5.6 percentage points decreased from the posted 23.3 percent in June 2021. Meanwhile, slower decrease in the indices of the following were registered in July 2021:

  • Other Cereals, Flour, Cereal Preparation, Bread, Pasta and

Other Bakery Products, 1.6 percent;

  • Fish, 3.6 percent; and
  • Food Products, N.E.C., 0.3 percent.

Milk, Cheese and Eggs registered a faster decline at -0.1 percent while, slower decline in the index on Rice at -1.0 percent was posted in July 2021. (Table B)

 

 

 

 

Technical Notes

This Special Release presents the results of the Survey of Retail Prices of Commodities and Services for the Generation of Consumer Price Index (CPI) conducted in July 2021. 

CPI

The 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.

Uses of the CPI

As an indicator, the CPI is most widely used in the calculation of the inflation rate and purchasing power of the peso. It is a major statistical series used for economic analysis and as monitoring indicator of government economic policy.

The CPI is also used as a deflator to express value series in real terms, which is, measuring the change in actual volume of transaction by removing the effects of price changes. Another major importance of the CPI is its use as basis to adjust wages in labor management contracts as well as pensions and retirement benefits. The CPI also serves as inputs in wage adjustments through the collective bargaining agreements.  

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 uses the 2012 as the base year. The year 2012 was chosen as the base year because it is the year when the Family Income and Expenditure Survey (FIES) was conducted. The FIES is the basis of the CPI weights.

  1. Market Basket

Market basket refers to a sample of thousands of varieties of goods purchased for consumption and services availed by the households in the country. It was selected to represent the composite price behaviour of all goods and services purchased by the consumers.

  1. Weighting System

The weighting system is a desirable system that considers the relevance of the components of the index. For the CPI, the weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditures.

  1. Geographic Coverage

CPI values are computed at the national, regional, and provincial levels, and for selected cities. A separate CPI for NCR is also computed.

  1. Classification Standards

The 2012-based CPI series is the first in the series that used the 1999 United Nations Classification of the Individual Consumption According to Purpose (COICOP) in determining the commodity groupings of the items and services included in the market basket. The 2012-based CPI also follows the 2015 Philippine Standard Geographic Classification codes.

Inflation Rate

The inflation rate (IR) is the annual or monthly rate of change of the CPI in percent. It is interpreted in terms of declining purchasing power of money.

 

Attachments:

Central Luzon’s Consumer Price Index (CPI) for Bottom 30% Income Households (2012 = 100) July 2021

 

 

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