National average inflation rate slowed down

The annual average consumer price index (CPI) in 2007 was computed at 141.8 for the Philippines, 144.4 for the National Capital Region (NCR) and 140.6 for areas outside NCR (AONCR).

Compared to 2006, the country’s annual average inflation rate in 2007 slowed down to 2.8 percent from 6.2 percent as slower annual average growth rates were registered in all the commodity groups. The lowest inflation rate of 2.2 percent was posted in March.

Regional inflation also decelerated

Annual average price movements in NCR eased to 2.6 percent in 2007 from 7.0 percent in 2006. Likewise, annual average inflation in AONCR slipped to 2.8 percent from 6.0 percent. The lowest inflation rate in NCR at 1.9 percent was noticed in June while in AONCR at 2.2 percent, in August.

On the average, annual price changes were lower in all the regions in 2007 compared to their rates in 2006.

Among the regions, Cordillera Administrative Region (CAR) had the lowest annual average inflation rate during the period at 1.9 percent followed by Region VII (Central Visayas) at 2.2 percent. The highest annual average inflation rate was observed in Administrative Regions in Muslim Mindanao (ARMM) at 5.0 percent.

By Commodity Group

Housing and Repairs Index (H&R) registered the lowest inflation rate in 2007

The inflation rates for all the commodity groups slowed down in 2007 compared to 2006. Annual average inflation rate for food, beverages and tobacco (FBT) eased to 3.3 percent in 2007 from 5.5 percent in 2006; clothing, 2.3 percent from 3.0 percent; H&R, 1.5 percent from 3.9 percent; fuel, light and water (FLW), 3.2 percent from 12.9 percent; services, 2.8 percent from 8.9 percent; and miscellaneous items, 1.6 percent from 3.0 percent. The biggest drop in inflation rate was in FLW. It decreased by 9.7 percentage points to 3.2 percent in 2007 from 12.9 percent in 2006 due to lower annual increases in the prices of kerosene, LPG and electricity rates in many regions including NCR.

Slower upward price movements in food items generally observed in 2007

At the national level, the annual price gain in rice was slower at 3.4 percent in 2007 from 3.7 percent in 2006. Likewise, its annual price increase in AONCR decelerated to 3.2 percent, with Region VII (Central Visayas) registering the lowest inflation rate of 0.2 percent during the year. However, the annual price hike of rice in NCR was higher at 4.3 percent from 1.8 percent. This was due to the dry spell that was experienced during the months of June, July and August that affected the production of rice in regions in the western part of Luzon.

On the other hand, the dry spell generally resulted to good production of corn during the year. The corresponding annual average inflation rates for corn in the Philippines and AONCR decelerated to 4.4 percent and 4.3 percent in 2007 from their respective last year’s rates of 4.7 percent and 4.8 percent. Region III (Central Luzon) had the lowest inflation rate of 0.6 percent during the year. Meanwhile, the annual price adjustment of corn in NCR went up to 6.2 percent in 2007 from 1.5 percent in 2006.

The annual average inflation rate for cereal preparations in the Philippines improved to 3.8 percent in 2007 from 5.9 percent in 2006; NCR, 4.2 percent from 6.8 percent; and AONCR, 3.8 percent from 5.6 percent. This was due to the lower annual increases in the prices of flour and flour products.

Slower price hikes in milk and milk products in selected regions including NCR were also noticed in 2007. Thus, the annual average inflation of the dairy products index decreased in the three areas: Philippines, 5.5 percent from 6.0 percent; NCR, 5.1 percent from 6.8 percent; and AONCR, 5.6 percent from 5.7 percent.

The favorable weather conditions that were generally experienced during the year resulted to abundant supply of fresh fish species in the markets. It pushed down the annual average price gain of fish in NCR to 0.3 percent in 2007 from 2.8 percent in 2006; AONCR, 3.9 percent from 5.7 percent; and at the national level, 3.3 percent from 5.2 percent.

Price increments in fruits and vegetables in the three areas were also slower in 2007 compared to 2006: Philippines, 2.9 percent from 8.8 percent; NCR, 1.7 percent from 8.6 percent; and AONCR, 3.3 percent from 9.0 percent. This was attributed to the sufficient supply of tropical and in-season fruits and vegetables in the wet markets due to the prevalence of favorable weather conditions during the period in review.

Upward price movements of cocoa, margarine, table salt, sugar and sugar products and seasonings were slower compared to their previous year’s price increases. Thus, the annual average inflation for the miscellaneous foods index in the Philippines decelerated to 2.6 percent in 2007 from 7.8 percent in 2006; NCR, 3.1 percent from 8.6 percent; and AONCR, 2.5 percent from 7.4 percent.

On the other hand, the stunted growths of chicken brought about by the global warm temperatures experienced during the first semester of 2007 resulted to lower supply of eggs in some regions including NCR. This factor pulled up the annual average inflation rate of eggs in the Philippines to 6.8 percent from 5.6 percent; NCR, 9.6 percent from 8.6 percent; and AONCR, 5.9 percent from 4.7 percent.

Prices of chicken were observed higher during the year due to its tight supply in the markets. Price additions were also noted in beef and processed meat products. Thus, the annual average inflation rates of meat in the Philippines and in NCR were higher at 2.6 percent and 3.9 percent, respectively from their corresponding 2006 rates of 2.4 percent and 2.6 percent. Meanwhile, the group’s annual average inflation rate in AONCR was at 2.0 percent, lower than the 2.3 percent posted in 2006.

Inflation rates for all the commodity groups in all the regions went down. FLW inflation recorded the biggest decrease

The FBT index in NCR registered an annual average inflation rate of 3.3 percent in 2007. This was slower by 2.3 percentage points from its last year’s annual average inflation rate of 5.6 percent. Compared to 2006, the FBT index in all the regions had lower inflation rates in 2007. The lowest annual average inflation rate for the group was noted in CAR at 1.6 percent while the highest rate was still observed in ARMM at 5.5 percent. Similarly, the corresponding annual average inflation of FBT in AONCR and in the Philippines at 3.2 percent and 3.3 percent in 2007 were also slower than their last year’s rate of 5.5 percent.

With the slower annual price increases of selected clothing items and footwear in all the regions except Region X (Northern Mindanao), the group’s index in AONCR registered an annual average inflation rate of 2.2 percent in 2007 from 3.3 percent in 2006. The lowest rate for the year was in Region XII (SOCCSKSARGEN) at 0.8 percent while the highest rate at 5.1 percent was in ARMM. On the other hand, annual average price adjustments in selected clothing items in NCR remained at 2.7 percent. The national annual average inflation rate decelerated to 2.3 percent in 2007 from 3.0 percent in 2006.

Price hikes in selected construction materials in 2007 were slower than in 2006.This correspondingly pushed down the growth in the H&R index in NCR and AONCR to 1.2 percent and 1.8 percent in 2007 from their respective last year’s figures of 4.9 percent and 3.1 percent. Thus, the H&R index at the national level posted an annual growth rate of 1.5 percent in 2007, slower than the 3.9 percent a year ago. The lowest rate of 0.5 percent was noted in Region VII (Central Visayas) with the biggest slowdown of 3.5 percentage points (2.4% from 5.9%) recorded in Region I (Ilocos). On the other hand, inflation was highest in Region II (Cagayan Valley) at 4.2 percent.

Compared to 2006, increments in the prices of electricity rates in NCR were lower during the months of August, September, October and November. Price add-ons in kerosene in the area were also slower in September. All these factors contributed to the 9.9 percentage points drop in the annual average inflation rate of FLW in NCR to 3.0 percent in 2007 from 12.9 percent in 2006. Similarly, increases in the prices of kerosene and LPG in all the regions were generally lower in 2007 compared to those in 2006. Hence, inflation in AONCR improved to 3.3 percent in 2007 from 13.0 percent in 2006. The lowest rate of 1.5 percent was seen in Region XI (Davao) while the highest rate was observed in Region X (Northern Mindanao) at 6.5 percent. The national inflation of the group’s index decelerated to 3.2 percent from 12.9 percent.

The 2007 annual average inflation for the services index slowed down in all the regions including NCR. This was brought about by the series of price rollbacks in gasoline and diesel. The annual average inflation rate in NCR and AONCR eased to 3.0 percent and 2.6 percent from their respective rates of 10.5 percent and 8.0 percent in 2006. All the regions posted lower annual rates during the year with Region XI (Davao) registering the biggest annual decline of 8.5 percentage points (2.0% from 10.5%). The national annual average inflation rate decelerated to 2.8 percent from 8.9 percent.

Slower upward movements in the prices of selected items for household operations triggered a 1.6 percentage points (1.2% from 2.8%) decrease in the annual average inflation rate for miscellaneous items in NCR. Likewise, annual average inflation in AONCR slowed down by 1.3 percentage points to 1.7 percent in 2007 from 3.0 percent a year ago as all regions registered lower rates. Sluggish annual growth rates in the prices of selected household appliances and equipment, furniture, laundry and cleaning supplies were observed in many regions. Among the regions, Cordillera Administrative Region (CAR) and Region VIII (Eastern Visayas) recorded the lowest inflation of 1.0 percent. Meanwhile, the highest rate of 4.4 percent was in ARMM. In the Philippines, the annual average inflation for the group slipped to 1.6 percent from 3.0 percent.