Regional Inflation Rate Decelerates Further to 2.2 percent

Reference Number: 

SR-2019-034

Release Date: 

Tuesday, August 20, 2019

Body: 

The region’s average inflation in July 2019 declined further to 2.2 percent from a record of 2.7 percent a month ago. Last year of the same month,
regional inflation rate hits 5.4 percent, 3.2 percentage points higher than the current inflation.   

 

Three provinces in the region followed the regional inflation trend with the exception of the povince of Batanes and Cagayan. Inflation in Batanes
which displayed the highest rate among the provinces ticked-off at 5.2 percent in July 2019, a 1.4 percentage points increase over the last month’s record, although it contracted by 1.3 percentage points from its record last year of the same month.

On the other hand, inflation in Quirino which displayed the lowest rate among the provinces in the region descended further to 0.4 percent
during this month from 0.9 percent in June 2019. A year ago, inflation in the province was estimated at 3.2 percent.

Meanwhile, inflation in the province of Isabela and Nueva Vizcaya is virtually identical with the regional average at 2.1 and 2.2 percent respectively.
The regional trends on a month-on-month and year-on-year is almost the same with these provinces with inflation in province of Isabela in July 2019
taking the biggest chopped of 1.1 percentage points from its record of 3.2 percent in June 2019. Notably, the highest rate in July 2018 was recorded
in Isabela at 7.2 percent while inflation in the province of Nueva Vizcaya took the second spot along with the rate record in Batanes at 6.5 percent.
Further, inflation in Cagayan province at 3.2 percent  is behind the highest rate in July 2019 and followed the trend of inflation rate in Batanes,
also an increase by 0.4 percentage point from its record last month.   

During the past seven months, the country’s inflation showed a steady downward trend while the region’s inflation displayed an erratic pattern.
Although in general, both inflation showed a decreasing pattern since January 2019, the region’s inflation was lower than the national average
in five reference months except during the months of January and May where the former’s average is higher than the latter. The region’s inflation
in January 2019 at 5.4 percent is 1.0 percentage point higher than the national average but gradually decreases during the next two months
below the national average.  In April and May 2019, inflation in the region steadily climbed at 0.4 and 0.3 percentage point respectively
with the inflation record of the region almost identical with the national average on those months. The latest inflation which is the lowest rate
for the past seven months is below the national average by 1.1 percentage points.

The regional inflation behaviour was shaped from the inflation report in the provinces of Batanes, Cagayan, Isabela and Quirino. Since January this year, the province of Batanes showed the highest monthly inflation across provinces in the region with exception in the reported inflation
during the month of February 2019 where the province of Nueva Vizcaya reported the highest inflation of 6.2 percent during that time. On the other hand and for the past seven months, the province of Quirino showed the lowest inflation that started at 3.1 percent in January 2019
and down to less 2.0 percent for the next four months. During the past two months, inflation in the province was noted at less than 1.0 percent
with its lowest current record at 0.4 percent.

Aside from almost identical rate reported, inflation in the province of Cagayan and Isabela moves parallel to each other during the past six months
except in July 2019 where inflation in the former moves upward while the latter behaves downward. Inflation rate in Nueva Vizcaya
during the past seven months continue to decrease from it highest rate record of 6.3 percent in January 2019. The pattern is similar
with the national average that depicted incremental decreases with its lowest current record of 2.2 percent.        

 

Most Regions’ inflation decline in July 2019

 

Eleven (11) regions including Cagayan Valley reported a decline in the current inflation rate compared with its report last June 2019. Among the regions with reported decline, Region XI (Davao Region) reported the biggest cut of 1.1 percentage points from its previous rate of 3.2 percent
while Region X (Northern Mindanao) and the National Capital Region reported a decline of 0.7 percentage point apiece, the former
from its last month’s report of 3.7 percent while the latter from 3.0 percent inflation report in June 2019. Along with Cagayan Valley,
the Autonomous Region of Muslim Mindanao (ARMM) reported a decrease in the current rate of inflation, the latter sliced by 0.6 percentage points
and the former by 0.5 percentage points from last month’s identical inflation report of 2.7 percent. Other regions reported a decline
ranging from 0.2 to 0.3 percentage points.

Two regions in the Visayas island (Central and Eastern Visayas) reported no change in rate while inflation in the remaining four regions rose
by 0.3 to 0.7 percentage points from its June 2019.  

Remarkably, inflation in the Region IV-B (MIMAROPA) registered the highest rate in the country for the past two months while the current inflation
in Region VII (Central Visayas) was the lowest at 1.1 percent. Last month, Region IX (Zamboanga Peninsula) captured the lowest rate at 0.7 percent.   

 

Communication and Education still the cheapest commodity in Cagayan Valley

Consumers Price Index (CPI) for all items in the region for July 2019 was recorded at 121.2, up by 0.4 index points from last month’s level
and higher by 2.6 index points from its record a year ago. CPI for all items in the province of Isabela at 124.0 was noted as the highest across provinces
while CPI in Quirino province at 116.1 was the lowest. Four provinces recorded an increase of CPI over its last month’s report with the highest uptick observed in the province of Isabela at 0.7 index point higher than its record last month of 123.3. CPI in Nueva Vizcaya and Quirino
(118.7 & 116.1, respectively) both gained by 0.1 index point while CPI in Cagayan (120.5) gained 0.4 index point. Only the reported CPI
in provinces of Batanes was slashed by 0.7 index points from its last month’s record of 124.2.

In general, all provinces reported an increase in the CPI reported this month compared to the report a year ago. Current CPI in Batanes
gained by as much as 6.1 index points compared with the CPI report in July 2018. Increases in current CPI for all items of other provinces
compared a year ago ranges from 2.5 to 3.7 index points. CPI in Quirino province during this month is up only by 0.6 index point.

Across commodity groups, Alcoholic Beverages & Tobacco still posted the highest CPI in the region at an average of 233.7 and trailing behind
is the CPI for Furnishing, Household Equipment & Routine Maintenance of the House with CPI of 127.7. At the bottom and the cheapest commodity
(in terms of CPI) is the CPI report on Communication and Education at 99.4 and 91.0, respectively.

CPI in the provinces for Alcoholic Beverages & Tobacco also prevails among other commodity groups as depicted by the closeness
in the reported CPI of the provinces. CPI for this particular commodity was recorded the highest across provinces in Cagayan at 251.5
while that in the province of Quirino at 187.6 was the lowest. CPI in Isabela is also above the regional average at 236.7.

On the lighter note, CPI for Education in the province of Cagayan was noted as lowest in the region. Its CPI report of 64.6 is 26.4 index points
lower than the regional average and almost triple on the highest rate in the region reported in the province of Batanes. CPI in the provinces of Isabela, Nueva Vizcaya and Quirino are almost identical above the national average with the latter report at 103.7 taking the second cheapest education
in the region in terms of the CPI report.   

 

Purchasing Power of Peso (PPP) steady at P 0.83

The average 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 July this year.

The provinces of Batanes and Isabela maintained the weakest PPP in the region at P0.81 while in Quirino province,
its PPP remains the strongest across provinces and stable for almost a year at P0.86. Meanwhile, PPP in the provinces of Cagayan and Nueva Vizcaya
remained stable for the past four months at P0.83 and P0.84, respectively.

 
 
 
MARILYN T. ESTRADA
Regional Director
 
 
//GMB / MJCC

 

Technical Notes:

 

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. 

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.