Central Luzon’s Consumer Price Index (CPI) for Bottom 30% Income Households (2012 = 100) July 2022

Reference Number: 

2022-SRCPIB30-Jul2022-092

Release Date: 

Friday, September 2, 2022

Year-on-Year Price Index Situation in July 2022

Central Luzon’s inflation rate for bottom 30 percent income households continued to accelerate at 7.4 percent in July 2022 from 6.8 percent in June 2022. This is the highest recorded inflation since January 2021 (7.2 percent). (Figure 1)

The national inflation rate for the bottom 30 percent income households also continued to accelerate recording at 5.9 percent in July 2022 from its 5.0 percent in June 2022.  Among the 17 regions in the country, Central Visayas had the highest inflation at 8.0 percent, while Cagayan Valley recorded the lowest inflation rate at 4.0 percent. Central Luzon had the third highest inflation rate at
7.4 percent. (Figure 2)

Year-on-Year Price Change by Commodity Group

The increase in majority of the indices of CPI significantly contributed to the 0.6 percent acceleration in the inflation for the bottom 30 percent income households. The index of Transportation continuously recorded the highest inflation rate at 17.1 percent, followed by Alcoholic Beverages and Tobacco, and Housing, Water, Electricity, Gas and Other Fuels indices recording 14.5 percent and 8.7 percent, respectively.

Higher annual increments were also recorded in the following indices:

• Food and Non-Alcoholic Beverages, 6.6 percent;
• Clothing and Footwear, 4.4 percent;
• Furnishing, Household Equipment and Routine Maintenance of the House, 4.6 percent; and
• Restaurant and Miscellaneous Goods and Service, 5.3 percent.

On the other hand, annual increase slowed down in the indices of Health, and Recreation and Culture at 2.9 percent and 2.7 percent inflation rate respectively. 

Meanwhile, the index of Communication retained its previous month’s inflation rate at 0.8 percent.  Education posted no increase in its inflation rate compared to that of June 2022. (Table A)

Year-on-Year Price Change by Food Group

Oils and Fats index continued to have the highest annual increase among food groups in
July 2022 at 31.2 percent. Sugar, Jam, Honey, Chocolate and Confectionery recorded the second highest annual increase at 27.7 percent followed by vegetables index at 13.2 percent in July 2022.
Moreover, increase in the annual indices were also recorded in the following:
• Other Cereals, Flour, Cereal Preparation, Bread, Pasta and Other Bakery Products,
8.8 percent;
• Meat, 6.8 percent;
• Fish, 9.3 percent;
• Milk, Cheese and Eggs, 6.1 percent; and
• Food Products, N.E.C., 4.7 percent.

On the other hand, indices of Rice recording 0.6 and Corn at 10.3 had a slower increment in
July 2022 from their rates in June 2022. Lastly, Fruits Index had a slower movement recording a 3.5 percent deflation. (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 2022. 

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

a. 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.

b. 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 behavior of all goods and services purchased by the consumers.

c. 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.

d. 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.

e. 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.

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