Inflation Drops to 2.7 percent in June 2019

Reference Number: 

SR-2019-032

Release Date: 

Friday, July 19, 2019

Body: 

Average inflation in the region softens to 2.7 percent in June 2019, the lowest inflation rate so far registered for the past six months
behind the 2.9 percent inflation rate recorded in March 2019. Surprisingly, for the 1st semester of 2019, this month inflation rate
is half of the highest report in region’s  inflation, recorded at 5.4 percent in January 2019.  A chopped 0.9 percent index point
was also noted from this month’s inflation  report versus May 2019 regional inflation rate of 3.6 percent. 

All provinces in the region displayed an inflation rate below the last month report with the province of Batanes still exhibiting
the highest inflation rate of 3.8 percent. However, the latest inflation rate in the province showed a remarkable decrease
from the highest rate recorded in the province in January 2019 at 7.3 percent. The current inflation report also showed
a 1.8 percent slash from May 2019 inflation rate pegged at 5.6 percent. On the other hand, inflation rate in the province of Quirino
still displayed the lowest inflation among provinces in the region as it fell below 1.0 percent from its last month’s report of 1.7 percent.

For the provinces of Cagayan and Nueva Vizcaya during the month in review,   an identical rate of 2.8 percent was noted,
the latter province inflation showing higher index points cut from its last month’s report and from its highest inflation record
for the past six months. Meanwhile, inflation rate in Isabela is behind Batanes infaltion rate, notched at 3.2 percent in June 2019,
0.8 percent index points lower than the inflation in May 2019 and  2.8 percent below the highest inflation rate of the province
for the past six months recorded in January 2019. 

Compared in 2018 of the same month, the regional inflation rate for June 2019 dropped by 2.2 percent points and the same behavior
was noted across all inflation rate reported by the provinces. Inflation rate for the current month in Nueva Vizcaya posted
the highest decline of 3.4 percent index points from its last year’s record while inflation rate in Cagayan province
reported the least cut of 1.8 percent index points. Other provinces’ current inflation rate is less by 2.0 to 2.6 percent index points
than the 2018 record.    

 

Communication and Education cheapest in Cagayan

Consumer Price Index (CPI) is an indicator of change in the average retail prices of a fixed basket of goods and services
commonly purchased by households relative to a base year. It measures how much on the average, prices of goods and services
have increased or decreased from a particular reference period. 

The average CPI of Cagayan Valley at 120.8 in June 2019 is 3.2 index points higher than its 117.6 price index a year ago. 
The same scenario a month ago, the top 3 highest CPI records in the region were Alcoholic Beverages and Tobacco; Furnishing,
Household Equipment and Routine Maintenance of the House and Clothing and Footwear, and still, the lowest CPI
were Transport, Communication and Education.

 

Corollary, Alcoholic Beverages and Tobacco displayed the highest CPI in all provinces with Cagayan showing the highest across provinces.
Further, CPI for Furnishing, Household Equipment and Routine Maintenance of the House comes next with CPI in Quirino showing
the highest price index at 131.7.  

On the other hand, the lowest CPI among the major commodity groups reached only 2-digit value and this can be seen
from the reported regional CPI for Communication maintaining its price index of 99.4 while Education with price index of 88.4
for June 2019, went up by 1.0 percent higher than the last month’s report. Across provinces, the province of Cagayan reported
the lowest CPI for both Communication and Education, with its CPI for the latter commodity showing the lowest CPI 
across all commodities and provinces.

 

CPI in Cagayan Valley higher than the National Average

Price index for all items in the region for June 2019 at 120.8 is still higher than the national average as it ticked down only
by 0.2 price index points below the last month report of 121.0.  ARMM still keeps the highest price index at 127.5, climbing further
by one half price index points from its last month report and higher by 7.6 price index points with that of the national price index average
of 119.9. CALABARZON region had the lowest price index at 117.6, 2.3 price index points lower than the national average
and 3.2 index points lower than the CPI recorded in Cagayan Valley.  

As pointed out earlier, Cagayan Valley’s CPI for June 2019 is 0.2 index point lower than the recorded CPI last month, an inverse situation
with the national price index together with the other 10 regions. Other regions increased slightly while few others maintain
its average CPI for the two latest months in review.

 

Purchasing Power of Peso remained steady for the past three months

 

 Purchasing Power of Peso (PPP) shows how much the peso in the base period is worth in another period. It gives an indication of the real value
of the peso in a given period relative to the peso value in the base period.  Purchasing Power of Peso (PPP) is inversely related to inflation rate.
Thus, as inflation rate increases, PPP declines.

 The PPP in the region remained the same since April 2019 at P0.83. This means that the value of P1.00 in 2012 is only worth P0.83 in April to June this year.

During the month, the province of Batanes regained its strength from its PP of P0.80 last month to P0.81 this June 2019. The PPP in Quirino province
remains the strongest across provinces and remained stable for the past nine months at P0.86. Meanwhile, PPP in the provinces of Cagayan, Isabela and Nueva Vizcaya
remained the same compared last month.

 

 

MARILYN T. ESTRADA
Regional Director
 
//GMB / MJCC