• The year-on-year headline inflation rate in the Philippines at 6.4 percent in July was the lowest rate recorded since July 2004. The continued slowing down of the inflation rate of the heavily weighted food, beverages and tobacco (FBT) items primarily contributed to the downtrend. Slower annual movements posted in the inflation rates of housing and repairs (H&R) and services were also registered this month. Inflation a year ago was 7.1 percent.

• Excluding selected food and energy items, core inflation at 5.4 percent in July was still slower than the 5.8 percent growth in June.

  • Similarly, annual inflation rate in the National Capital Region (NCR) was lower by 0.3 percentage point to 7.1 percent in July from 7.4 percent in June brought about by the downward annual price adjustments in H&R and services items.

  • Inflation in Areas Outside the National Capital Region (AONCR) eased to 6.0 percent in July from 6.4 percent in June as slower annual rates were recorded in the prices of FBT, fuel, light and water (FLW) and services items.

• The general upward movements in the prices of food items particularly vegetables, chicken and fish primarily effected the 0.5 percent growth in the month-on-month inflation rate in July. Add-ons in the prices of LPG and kerosene and higher electricity rates in many regions including NCR were also noted during the month. Moreover, prices of gasoline, diesel and engine oil and higher charges for selected personal and medical services also contributed to the uptick.

CONSUMER PRICE INDEX 
(2000=100) 
JULY 2006

l By Region, Year-on-Year

• The inflation rate in NCR at 7.1 percent in July was lower by 0.3 percentage point from 7.4 percent growth in June.

• Inflation in AONCR also moved at a slower pace of 6.0 percent in July from 6.4 percent in June. Annual inflation decelerated in all the regions except for Eastern Visayas and ARMM. The biggest slowdown was registered in MIMAROPA at 1.2 percentage points (5.5% from 6.7%). Western Visayas continued to register the lowest inflation rate at 4.5 percent in the current month while the highest inflation rate was still noticed in ARMM at 9.0 percent.

l By Commodity Group, Year-on-Year

• The annual inflation rate of FBT at the national level slowed down to 5.2 percent in July from 5.6 percent in June; H&R, 3.8 percent from 4.0 percent; and services, 9.4 percent from 11.0 percent. Meanwhile, inflation for clothing was higher at 3.1 percent from 3.0 percent; FLW, 14.5 percent from 13.2 percent; and miscellaneous items, 3.1 percent from 3.0 percent.

• The overall inflation rate for food alone at 5.2 percent in July was slower compared to 5.6 percent posted in June.

• The annual price adjustment in rice eased to 2.7 percent in July from 3.5 percent in June; corn, 2.5 percent from 3.4 percent; cereal preparations, 5.8 percent from 6.1 percent; dairy products, 5.9 percent from 6.0 percent; eggs, 4.3 percent from 5.6 percent; and miscellaneous foods, 7.8 percent from 9.2 percent. Annual inflation for fish was however higher at 5.4 percent from 5.0 percent; fruits and vegetables, 9.9 percent from 9.7 percent; and meat, 1.5 percent from 1.2 percent.

• In NCR, upward trend in inflation rates for H&R and services were correspondingly slower at 4.3 percent and 10.4 percent in July from their respective June rates of 5.1 percent and 12.4 percent. On the other hand, higher inflation rates were seen in FLW and miscellaneous items at 17.2 percent and 2.9 percent respectively from their previous month’s rates of 13.1 percent and 2.8 percent. Inflation for FBT and clothing were still at their corresponding previous month’s rates of 5.3 percent and 2.7 percent.

• The inflation rate for food alone in NCR went up by 5.3 percent in July, the same rate recorded in June.

• Annual price addition was higher in corn at 1.4 percent in July from 0.2 percent in June; fish, 3.2 percent from 2.7 percent; fruits and vegetables, 10.5 percent from 5.9 percent; and meat, 1.3 percent from -0.3 percent. Meanwhile, slower annual price increase was posted in rice at 0.7 percent from 0.8 percent; cereal preparations, 6.6 percent from 7.0 percent; dairy products, 6.4 percent from 6.5 percent; eggs, 4.9 percent from 8.8 percent; and miscellaneous foods, 8.2 percent from 11.2 percent.

• In AONCR, the annual price movements of FBT, FLW and services correspondingly slowed to 5.3 percent, 13.0 percent and 8.8 percent in July from their respective June rates of 5.7 percent, 13.2 percent and 10.2 percent. On the contrary, annual inflation for H&R and miscellaneous items were respectively higher at 3.4 percent and 3.2 percent from their corresponding previous month’s rates of 3.2 percent and 3.1 percent. Inflation for clothing remained at 3.3 percent.

• Inflation for food alone in AONCR further slackened to 5.3 percent in July from 5.7 percent in June.

• Lower price gain was registered in rice at 3.0 percent in July from 3.9 percent in June as the annual rate of price movements in all the regions except for Davao either were slower or were negative in growth rates. The biggest slowdown of 2.6 percentage points (4.0% from 6.6%) was seen in Bicol.

• Except for fish whose annual price hike was faster at 5.9 percent from 5.5 percent, the rest of the food groups registered lower annual growth rates: Corn, 2.6 percent in July from 3.4 percent in June; cereal preparations, 5.5 percent from 5.7 percent; dairy products, 5.7 percent from 5.8 percent; eggs, 4.1 percent from 4.7 percent; fruits and vegetables, 9.6 percent from 10.9 percent; meat, 1.6 percent from 1.9 percent; and miscellaneous foods, 7.7 percent from 8.4 percent.

l By Region, Month-on-Month

• Price increases in NCR improved to 0.8 percent in July from 1.0 percent in June due to the 1.7 percentage points (0.8% from 2.5 percent) slowdown in the price increments of the services items. Meanwhile, prices of FBT items moved up at a faster rate of 0.8 percent from 0.6 percent; FLW items, 3.2 percent from 1.9 percent; and miscellaneous items, 0.3 percent from zero growth. For four consecutive months, price additions in clothing items stayed at 0.2 percent while prices of H&R items remained stable for three consecutive months as its index posted zero growth.

• Price increments in AONCR were slower by 0.2 percentage point to 0.4 percent in July from 0.6 percent in June. Price gains in FBT and clothing items eased to 0.2 percent from their corresponding last month’s rates of 0.4 percent and 0.3 percent and services items, 0.5 percent from 1.6 percent. On the other hand, prices of H&R and FLW items climbed up correspondingly to 0.4 percent and 1.4 percent from 0.2 percent and 0.7 percent, respectively while price hikes in miscellaneous items still remained at 0.2 percent. CAR recorded the lowest month-on-month rate at zero growth while the highest rate was seen in Zamboanga Peninsula at 0.7 percent.

l By Commodity Group, Month-on-Month

• Compared to June 2006, the general level of consumer prices went up at a slower pace of 0.5 percent in July from 0.7 percent. Additions in the prices of FBT and services items were correspondingly slower at 0.3 percent and 0.7 percent from 0.4 percent and 1.9 percent, respectively. However, higher price adjustments were noticed in FLW (2.1% from 1.1%) and miscellaneous items (0.2% from 0.1%). Price gains in clothing and H&R items were still registered at 0.2 percent.

   

  • The monsoon rains brought about by typhoon “Florita” trapped temperate vegetables at the production areas in the Northern provinces causing limited supply of vegetables in the NCR wet markets. Thus, fresh vegetables were priced higher in the area. Moroever, prices of selected fruits were also up during the period. These factors raised the index of fruits and vegetables in NCR by 3.3 percent. Meanwhile, the group’s index slightly grew by only 0.1 percent in AONCR as eight regions posted price decreases. Hence, the national index for fruits and vegetables increased at a slower pace of 0.8 percent from 1.0 percent.

  • The difficulty in catching fishes due to continuous rains and turbulent seas experienced during the month resulted to lower supply of fish species in the markets. This pulled up the fish index in AONCR by 0.4 percent. Similarly, the group’s index in NCR also moved upward by 1.0 percent as fresh fish species and canned fish went up this month. Overall, the group’s index rose by 0.5 percent.

  • Upward price adjustment in chicken primarily brought about the increment in the meat index in the Philippines by 0.4 percent; NCR, 1.0 percent; and AONCR, 0.1 percent. Prices of pork, beef, processed and canned meat also increased during the month.

  • The price of rice in NCR remained stable as it posted zero growth during the month from 0.1 percent. Meanwhile, price increments in AONCR and Philippines improved to 0.2 percent from their respective June rates of 0.4 percent and 0.3 percent.

  • Add-ons in the prices of coffee, tea, cooking oil and sugar were noted in selected regions including NCR. These were however offsetted by the reductions in the prices of common spices and seasonings. Thus, the increase in the miscellaneous foods index in the three areas was pegged at only 0.1 percent.

   

• Price hikes in fuel items such as LPG and kerosene along with higher electricity rates posted in many regions including NCR triggered the 2.1 percent growth of the FLW index in the Philippines, 3.2 percent in NCR and 1.4 percent in AONCR.

• Charges for selected medical and personal services in some regions including NCR were up during the month. Price gains in diesel, gasoline and engine oil were also recorded in NCR and in selected regions. All these factors contributed to the 0.7 percent uptick in the services index in the Philippines; 0.8 percent in NCR; and 0.5 percent in AONCR.

• Upward price adjustments in selected construction materials in many regions were still observed during the month. Thus, the H&R index at the national level and in AONCR correspondingly went up by 0.2 percent and 0.4 percent. Meanwhile, prices of H&R items in NCR generally remained stable for three consecutive months as its index posted zero growth during these periods.

NOTE: CPIs and inflation rates by province and selected city are also available upon request at NSO, Industry and Trade Statistics Department, Economic Indices and Indicators Division (Telephone Numbers: 716-39-35 and 715-33-47, email address: r.staana@census.gov.ph).