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

Reference Number: 

2022-SRCPIB30-Oct2022-130

Release Date: 

Monday, November 21, 2022

Year-on-Year Price Index Situation in October 2022

Central Luzon’s inflation rate for bottom 30 percent income households accelerated to8.4 percent in October 2022, recording 1.6 percentage points increase from the 6.8 percent in September 2022. This is also the second consecutive acceleration after its deceleration in August 2022. (Figure 1)

The national inflation rate for the bottom 30 percent income households recorded at 7.3 percent in October 2022.  Among the 17 regions in the country, Central Visayas and National Capital Region recorded the highest inflation at 9.1 percent, while Caraga had the lowest at 5.8 percent. Central Luzon recorded the second highest inflation rate at 8.4 percent. (Figure 2)

The uptrend in the inflation of bottom 30 percent income household was due to higher annual increment in the index of food and non-alcoholic beverages at 8.8 percent from 5.2 percent in September 2022. This was followed by the index of restaurant and miscellaneous goods and service at 4.7 percent from 4.3 percent in September 2022 and the index of clothing and footwear at 5.2 percent from 4.7 percent in September 2022.

Likewise, higher annual increments were recorded in the following indices:

• Furnishing, household equipment and routine maintenance of the house, 5.6 percent;
• Alcoholic beverages, tobacco and other vegetable-based tobacco products, 16.1 percent; and
• Recreation and culture, 5.1 percent.

On the other hand, lower annual increment was recorded for the indices of transport at 15.1 percent and housing, water, electricity, gas and other fuels at 7.4 percent.

Furthermore, same rate of increase with that of the previous month was noted in the indices of health at 2.3 percent, communication at 0.9 percent and education at 2.6 percent. (Table A)

The annual growth rate in the regional food index registered an increase of 9.1 percent in October 2022 from 5.4 percent in September 2022. The upward trend in the food index is mainly attributed to higher increments in the annual growth rate of the following indices:

• Vegetables, 17.9 percent;
• Meat, 8.7 percent; and
• Sugar, jam, honey, chocolate and confectionery, 47.8 percent.

The following food group also contributed to the uptrend:
• Rice, 1.7 percent;
• Corn, 13.0 percent;
• Other cereals, flour, cereal preparation, bread, pasta and other bakery products, 11.8 percent;
• Fish and seafood, 8.1 percent;
• Milk, cheese and eggs, 12.1 percent; and
• Food products n.e.c., 8.1 percent.

Meanwhile, lower annual increment was noted in the index of oils and fats at 29.1 percent from 29.6 percent in September 2022 and fruits from negative 1.6 percent to a higher negative 5.4 percent.

 

 

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 October 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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