National average inflation moved up

The annual average consumer price index (CPI) in 2008 was registered at 155.0 for the Philippines, 154.4 for the National Capital Region (NCR) and 155.2 for areas outside NCR (AONCR).

The country’s annual average inflation rate accelerated by 6.5 percentage points to 9.3 percent in 2008 from 2.8 percent in 2007 as all the commodity groups posted higher annual average inflation rates. This was the highest annual average inflation since 1999 (5.9%). The highest annual average inflation during the year was observed in August at 12.4 percent while the lowest was at 4.9 percent in January.

Regional inflation also picked up

Annual average price changes in NCR and AONCR were correspondingly higher at 6.9 percent and 10.4 percent in 2008 from 2.6 percent and 2.8 percent, respectively in 2007. The highest inflation in NCR was seen in June at 9.2 percent while that in AONCR was at 14.2 percent in August.

Except Cordillera Administrative Region (CAR), Region 1 (Ilocos), Region IV-A (CALABARZON) and Region 5 (Bicol), all the other regions recorded double-digit annual average inflation rate in 2008.

Among the regions, the highest annual average inflation rate during the year was noted in Caraga at 14.8 percent followed by Region VIII (Eastern Visayas) at 13.6 percent. Meanwhile, the lowest annual average inflation rate was posted in Region IV-A (CALABARZON) at 8.0 percent.

By Commodity Group

Food, Beverages and Tobacco (FBT) index registered the highest annual average inflation in 2008

Compared to 2007, annual average inflation was higher in all the commodity groups in 2008. The FBT index had a double-digit inflation figure of 12.9 percent in 2008 from 3.3 percent in 2007. Inflation in the clothing index was also higher at 4.2 percent from 2.3 percent; housing and repairs (H&R), 4.3 percent from 1.5 percent; fuel, light and water (FLW), 6.5 percent from 3.2 percent; services, 8.6 percent from 2.8 percent; and miscellaneous items, 2.9 percent from 1.6 percent.

Food prices posted higher annual price hike in 2008

With higher farmgate prices of rice due to expensive fertilizer, irrigation inputs and the reported rice hoarding by some traders, annual average inflation rates for rice jumped in the three areas: Philippines, 29.1 percent in 2008 from 3.4 percent in 2007; NCR, 34.0 percent from 4.3 percent; and AONCR, 28.5 percent from 3.2 percent. Region IV-A (CALABARZON) had the highest inflation rate of 31.6 percent during the period while the lowest at 21.6 percent was noted in Region XII (SOCCSKSARGEN).

Similarly, the annual average inflation for the corn index in the Philippines advanced by 23.2 percent from 4.4 percent; NCR, 10.7 percent from 6.2 percent; and AONCR, 23.4 percent from 4.3 percent. This was brought about by the increasing cost of inputs for its production.

Gains in the prices of cereal preparations such as flour and flour products were higher as prices of wheat in the world market went up during the year. Hence, the annual average inflation rate for the cereal preparations index in the Philippines accelerated to 15.7 percent in 2008 from 3.8 percent in 2007; NCR, 16.0 percent from 4.2 percent; and AONCR, 15.6 percent from 3.8 percent.

Increments in the respective dairy products index in NCR and AONCR at 11.4 percent and 13.5 percent from their corresponding previous year’s rates of 5.1 percent and 5.6 percent were due to increased prices of imported raw materials for the manufacture of milk and milk products. The national annual average inflation rate of the group at 12.8 percent was faster than the 5.5 percent in 2007.

The tightness in the supply of eggs in the markets due partly to low production subsequently raised the corresponding group’s annual average inflation rate in the Philippines and AONCR by 6.9 percent and 8.8 percent. Meanwhile, the group’s annual average inflation rate in NCR was slower at 1.0 percent than 9.6 percent in 2007.

The intensified monsoon rains brought about by the typhoons experienced during the 2nd and 3rd quarters of the year brought difficulty in fishing activities hence, supply of fish species in the wet markets was so low that it pushed up prices of fish in NCR and AONCR. Higher prices of canned fish were also noted during the year. These factors contributed to the growths in the annual average inflation rate for fish at the national level at 9.1 percent from 3.3 percent; NCR, 7.6 percent from 0.3 percent; and AONCR, 9.4 percent from 3.9 percent.

Compared to 2007, the annual average price additions in fruits and vegetables picked up in the three areas in 2008: Philippines, 11.7 percent from 2.9 percent; NCR, 7.9 percent from 1.7 percent; and AONCR, 12.8 percent from 3.3 percent. The upward price adjustments can be attributed to the reduced volume of harvest for some fruits and vegetables in selected regions due to the occurrence of typhoons in the country in May, June, July and August. The heavy downpours experienced in some regions sometime in September and October and the reported frost bites at the highlands vegetable growing areas during the latter part of the year resulting to lower supplies of selected vegetables also contributed to the upward trend.

The annual average inflation of the meat index in the Philippines rose by 8.9 percent in 2008 from 2.6 percent in 2007; NCR, 8.0 percent from 3.9 percent; and AONCR, 9.4 percent from 2.0 percent. It resulted from the increments in the prices of fresh meat brought about by the high cost of feeds along with rising prices of canned meat in some regions.

Prices of cooking oil, coffee, powdered tonic drinks and selected spices and seasonings in NCR and AONCR generally picked up during the year. It triggered higher inflation in the miscellaneous foods index in the Philippines at 7.3 percent in 2008 from 2.6 percent in 2007; 5.4 percent from 3.1 percent in NCR; and 8.2 percent from 2.5 percent in AONCR.

Inflation rates for all the commodity groups in all the regions were generally higher

Inflation rates in FBT index were higher in all the regions including NCR during 2008 relative to the previous year. The highest annual average inflation rate of the group in AONCR was noted in Caraga at 19.4 percent while the lowest rate was seen at 12.0 percent in Region IV-A (CALABARZON).

The annual average inflation of the clothing index in AONCR was higher at 3.9 percent in 2008 compared to 2.2 percent a year ago. Except for ARMM where the inflation for clothing was slower at 5.0 percent, all regions posted higher annual average inflation during the year. This was due to the add-ons in the prices of selected ready-made apparel and footwear. The highest rate recorded for the year was at 7.5 percent in Region VII (Central Visayas) and Region IX (Zamboanga Peninsula) while the lowest rate was in Region I (Ilocos) at 2.1 percent. Moreover, the annual price gains in selected footwear, ready-made apparel and sewing charges in NCR advanced the clothing index by 2.4 percentage points to 5.1 percent in 2008 from 2.7 percent in 2007. The annual average inflation rate for the group at the national level also moved up to 4.2 percent from 2.3 percent.

Additions in the prices of selected construction materials and the increased rental rates observed in many regions including NCR correspondingly pulled up the H&R index by 2.5 percent in NCR and 5.7 percent in AONCR. Fifteen (15) regions posted higher annual average rates, with Region III (Central Luzon) registering the biggest rate of 16.8 percent while the lowest was in Region VII (Central Visayas) at 1.5 percent. The group’s annual average inflation in the Philippines was seen at 4.3 percent from 1.5 percent.

Upward movement in the prices of kerosene, LPG and charcoal were noted in most of the regions in 2008. Thus, the annual average inflation rate of FLW index in AONCR picked up to 8.5 percent from 3.3 percent in 2007. Except for CAR (Cordillera Administrative Region) which had the lowest rate of 3.3 percent, all the regions showed higher annual average rates. The highest rate was seen in ARMM at 15.1 percent. On the other hand, the annual average inflation for the group in NCR eased to 2.8 percent in 2008 from 3.0 percent in 2007 effected by the lower basic charges of electricity in the area. The national inflation of the group’s index rose to 6.5 percent from 3.2 percent.

Inflation for the services index in the Philippines went up to 8.6 percent in 2008 from 2.8 percent in 2007; NCR, 9.5 percent from 3.0 percent; and AONCR, 8.0 percent from 2.6 percent. The increase resulted from the series of price uptick in gasoline, diesel and engine oil experienced nationwide from January to August of 2008. Higher transportation fares which took effect during the second semester also contributed to the increment. Price gains on medicines, increased charges for medical, dental, and personal services, tuition fee hikes and upward price adjustments in school supplies were also observed during the period in review. All the regions posted higher annual average inflation rates in 2008 with Region IX (Zamboanga Peninsula) registering the biggest jump of 8.9 percentage points (11.2% from 2.3%).

The 2008 annual average inflation for miscellaneous index in NCR moved up to 1.9 percent from last year’s 1.2 percent mainly due to the additions in the prices of selected items for household operations. Likewise, increments in the prices of selected household appliances and equipment, furnishings, furniture, laundry and cleaning supplies in many regions contributed to a higher growth in the group’s index in AONCR at 3.3 percent from 1.7 percent. Among the regions, ARMM recorded the highest inflation of 5.9 percent from 4.4 percent while the lowest rate at 1.7 percent was posted in CAR. In the Philippines, the annual average inflation for the group also inched up to 2.9 percent from 1.6 percent.

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