NSCB Resolution No. 5
Series of 2009

APPROVING THE ESTIMATION METHODOLOGY
FOR THE 2006-BASED CONSUMER PRICE INDEX FOR THE BOTTOM 30 PERCENT INCOME GROUP HOUSEHOLDS

WHEREAS, the Consumer Price Index (CPI) is an important indicator for monitoring changes over time of the average prices of a fixed basket of goods and services commonly purchased by households relative to a base year;

WHEREAS, the CPI is released monthly by the National Statistics Office (NSO) for “all-income households” at the national, regional, and provincial levels as well as for selected cities;

WHEREAS, the CPI for “all-income households” refers to the CPI for all income groups, i.e., the high-, middle- and low-income groups, and, is thus reflective of the expenditures of all- income Filipino households;

WHEREAS, based on the 2006 official poverty statistics released by the National Statistical Coordination Board (NSCB), 26.9 percent of Filipino families fall below the official poverty threshold, and hence, households in the bottom 30 percent of the cumulative per capita income distribution constitute the low-income group;

WHEREAS, the CPI for the bottom 30 percent income group households could generally be used to monitor the welfare of poor families, one of the main thrusts of the government;  and could also specifically provide for a more appropriate deflator of income and inflator of food prices and other basic commodities, which can be used by the government in their plans and programs to improve the standard of living of poor families;

WHEREAS, the compilation of the CPI for the bottom 30 percent income group households is articulated in the Philippine Statistical Development Program 2005-2010;

WHEREAS, the NSO, in keeping with its mission to be relevant to its stakeholders, developed a methodology that will serve as basis for the computation of the CPI for the bottom 30 percent income group households;

WHEREAS, the Technical Working Group on CPI (TWG-CPI) under the Technical Committee on Price Statistics (TCPS) reviewed the proposed methodology during its meetings in 2006 held 19 June and 18 September;

WHEREAS, the TWG-CPI also made several presentations to the TCPS, the UP School of Statistics, and the UP School of Economics on 8 August 2006, 11 September 2006, and  20 March 2007, respectively, in order to solicit comments/suggestions for further refinements of the methodology;

WHEREAS, the TCPS, in its meeting on 13 November 2008, after making the necessary changes/refinements based on the comments of the concerned agencies/stakeholders, recommended for adoption the methodology on the CPI for the bottom 30 percent income group households;

WHEREAS, in the computation of the CPI for the bottom 30 percent income group households, the NSO will use the results of the 2006 Family Income and Expenditure Survey (FIES) for the weights (by expenditure item) and the results of the 2005 Commodity and Outlet Survey for the market basket, with 2006 as the base year, which is in consonance with NSCB Resolution No.2, Series of 2009 “Approving the Synchronized Rebasing of Price Indices to Base Year 2006;

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that the Board approve the recommendation of the TCPS to adopt the methodology for the computation of the 2006-based CPI for the bottom 30 percent income group households (Annex BR-05-2009-01):

BE IT RESOLVED FURTHER, that the NSO undertake necessary activities for institutionalizing the generation of the CPI for the bottom 30 percent income group households.

Approved this 11th day of March 2009, in Pasig City.

Attested by:

ROMULO A. VIROLA
Secretary General