The headline inflation rate in Lanao del Sur province increased further to 5.3 percent in April 2024 from 4.5 percent in March 2024 (see Figure 1). This represents 0.1 percentage points lower from its level 5.4% in the same month last year. Moreover, Lanao del Sur posted a 3.6 percent year-to-date inflation rate in All items. (see Table 1)

The increase in price in the following Commodity Groups in province’s inflation was mainly brought about by the higher annual increases in the index for Food and Non-Alcoholic Beverages at 7.9 percent, Housing, Water, Electricity, Gas and Other Fuels at negative 1.5 percent and Transport at 1.3 percent. Also contributing to the uptrend in the overall inflation during the period were the higher annual increment in the indices of the following commodity groups as compared with their previous month’s inflation rates:

a. Health at 3.7 percent;
b. Personal Care, and Miscellaneous Goods and Services at 3.9 percent;
c. Furnishing, Household Equipment and Routine Maintenance of the House at 3.7 percent;
d. Clothing and Footwear at 5.0 percent;
e. Alcoholic Beverages and Tobacco at 3.7 percent;
f. Restaurants and Accommodation Services at 7.4 percent;
g. Recreation, Sport and Culture at 4.8 percent; and
h. Information and Communication, Education Services at 0.8 percent;

On the other hand, the commodity group of, Education Services and Financial Services are retained their previous month’s inflation rate. (See table 2)

INFLATION RATES FOR FOOD ITEMS

For food index, it increased further by 8.0 percent in April 2024, from 7.0 percent in the previous month. In April 2023, food index was higher at 5.4 percent.

The increase in the province’s food inflation rate was mainly brought about by the higher annual increases in the index for Vegetables, tubers, plantains, cooking bananas and pulses at 1.0 percent, Fish and other seafood at 4.6 percent and Ready-Made Food and Other Food Products N.E.C at 2.8 percent. Also contributing to the uptrend in the overall food inflation during the period were the higher annual increments in the indices of the following food commodity groups as compared with their previous month’s inflation rates:

a. Oils and Fats at 5.3 percent;
b. Milk, Other Dairy Products, and Eggs at 11.2 percent; and
c. Fruits and nuts at 2.4 percent.

On the other hand, the food commodity group posted lower inflation rates from April 2023 were the following:

a. Cereals and cereal products at 13.4 percent;
b. Rice at 15.8 percent;
c. Flour, Bread and Other Bakery Products, Pasta Products, and Other Cereals at 4.2 percent;
d. Meat and other parts of slaughtered land animal at 8.1 percent; and
e. Sugar, Confectionery and Desserts at negative 5.9 percent. (See table 2)

 

PURCHASING POWER OF PESO

Purchasing Power of Peso (PPP) is inversely related to inflation rate. Thus, as the inflation rate increases, PPP declines. As shown in Figure 2, Lanao del Sur, PPP is declined at 0.80 as of April 2024. This is the lowest purchasing power of peso recorded since April 2023.

TECHNICAL NOTES:
Consumer Price Index (CPI)
The CPI is an indicator of the changes in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
Uses of CPI
The CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is a major statistical series used for economic analysis and as a monitoring indicator of government economic policy.
Computation of CPI
The computation of the CPI involves consideration of the following important points:
a. Base Period
The reference date or base period is the benchmark or reference date or period at which the index is taken as equal to 100.
b. Market Basket
A sample of the thousands of varieties of goods purchased for consumption and services availed by the households in the country selected to represent the composite price behavior of all goods and services purchased by consumers.
c. Weighting System
The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure.
d. Formula
The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2006) weight.
e. Geographic Coverage
CPI values are computed at the national, regional, and provincial levels, and for selected cities.
Inflation Rate
the rate of change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of peso.
Headline Inflation
refers to the rate of change in the CPI, a measure of the average standard “basket” of goods and services consumed by a typical family.
Purchasing Power of Peso
shows how much the peso in the base period is worth in the current period. It is computed as the reciprocal of the CPI for the period under review multiplied by 100.

Note: The dataset used in the special release is exclusive for BARMM region and Lanao del Sur province.

MOHAMMADALI R. ALONTO, MPA
OIC Chief Statistical Specialist