· The year-on-year headline inflation rate in the Philippines jumped to a double-digit figure of 11.4 percent in June from 9.5 percent in May. This was the highest rate since May 1994 (11.5%). Except for the fuel, light and water (FLW) index, all the commodity groups recorded higher annual inflation rates during the month. Inflation a year ago was 2.3 percent.

· Similarly, annual inflation rate in the National Capital Region (NCR) advanced by 0.9 percentage point, to 9.2 percent in June from 8.3 percent in May brought about by the higher annual price increases in all the commodity groups except for clothing and FLW items.

· In Areas Outside the National Capital Region (AONCR), annual inflation picked up to 12.3 percent in June from 10.1 percent in May as all the commodity groups posted higher annual inflation rates.

• Excluding selected food and energy items, core inflation further climbed to 6.6 percent in June from 6.2 percent in May.

• The soaring prices of rice nationwide along with the upward adjustments of other food items such as flour and flour products, fruits and vegetables and meat in selected regions pushed the month-on-month inflation rate in the Philippines to 2.3 percent in June from 1.5 percent in May. Tuition fee hikes and the series of upward adjustments in petroleum products also contributed to the uptrend.

CONSUMER PRICE INDEX
(2000=100)
JUNE 2008

By Region, Year-on-Year

• The annual inflation rate in NCR further went up to 9.2 percent in June from 8.3 percent in May.
• Year-on-year inflation in AONCR accelerated to 12.3 percent in June from 10.1 percent in May as all the regions except CALABARZON registered double-digit inflation rates. The biggest jump of 6.7 percentage points was noticed in SOCCSKSARGEN (18.9% from 12.2%) followed by Caraga (19.8% from 13.4%) at 6.4 percentage points. The highest inflation rate among the regions was observed in Caraga at 19.8 percent.

By Commodity Group, Year-on-Year

• All the commodity groups continued to post higher year-on-year inflation rates except for FLW index whose annual growth rate was slower at 7.6 percent in June from 8.2 percent in May. Annual inflation for food, beverages and tobacco (FBT) picked up to 16.5 percent in June from 13.6 percent in May; clothing, 4.2 percent from 4.0 percent; housing and repairs (H&R), 4.3 percent from 4.0 percent; services, 9.9 percent from 7.8 percent; and miscellaneous items, 2.9 percent from 2.7 percent.
• At the national level, the annual inflation rate for food alone rose to 17.4 percent in June from 14.2 percent in May.
• Annual inflation for rice was higher at 43.0 percent in June from 31.3 percent in May; corn, 34.3 percent from 27.1 percent; cereal preparations, 16.6 percent from 15.3 percent; fish, 10.8 percent from 9.6 percent; fruits and vegetables, 12.5 percent from 10.1 percent; meat, 11.4 percent from 10.4 percent; and miscellaneous foods, 8.3 percent from 7.6 percent. Meanwhile, slower annual price adjustments were correspondingly seen in dairy products and eggs at 13.5 percent and 7.5 percent from 13.7 percent and 7.7 percent, respectively.
• In NCR, inflation rate for FBT grew to 14.1 percent in June from 12.7 percent in May; H&R, 2.6 percent from 2.3 percent; services, 12.8 percent from 9.9 percent; and miscellaneous items, 1.9 percent from 1.7 percent. Annual price increases in FLW items however slowed down to 3.4 percent from 6.6 percent while those for clothing items remained at 5.2 percent.
  • Inflation rate for food alone in NCR climbed by 14.7 percent in June from 13.2 percent in May.
  • Annual price hike in rice soared to 60.5 percent in June from 43.6 percent in May; cereal preparations, 17.5 percent from 15.7 percent; dairy products, 12.2 percent from 11.8 percent; and meat, 11.4 percent from 10.5 percent. On the other hand, annual growth rates in the prices of eggs decelerated to 2.2 percent from 3.3 percent; fish, 11.8 percent from 12.7 percent; fruits and vegetables, 8.6 percent from 10.5 percent; and miscellaneous foods, 6.4 percent from 6.9 percent. Inflation for corn stayed at 17.5 percent for the last six consecutive months.
• In AONCR, higher annual inflation rates in all the commodity groups were still noted during the month. Annual price changes in FBT items went up to 17.3 percent in June from 13.9 percent in May; clothing, 3.8 percent from 3.6 percent; H&R, 5.7 percent from 5.3 percent; FLW, 9.9 percent from 9.0 percent; services, 8.2 percent from 6.6 percent; and miscellaneous items, 3.3 percent from 3.0 percent.
  • Annual price increments for food alone in AONCR at 18.2 percent in June was higher than its May rate of 14.6 percent.
  • As all the regions in AONCR continued to record higher annual growth rates in rice, the index in the area rose to 40.6 percent in June from 29.7 percent in May. The biggest jump of 37.4 percentage points (65.4% from 28.0%) was noted in Davao followed by SOCCSKSARGEN at 36.7 percentage points (63.0% from 26.3%).
  • The annual price change in corn further picked up to 34.5 percent in June from 27.4 percent in May; cereal preparations, 16.3 percent from 15.1 percent; eggs and fish, 9.1 percent and 10.5 percent from 9.0 percent; fruits and vegetables, 13.6 percent from 10.0 percent; meat, 11.4 percent from 10.4 percent; and miscellaneous foods, 9.1 percent from 7.9 percent. However, annual inflation for the dairy products index at 14.0 percent was slower than its last month’s rate of 14.5 percent.

By Region, Month-on-Month

• Prices in NCR moved up to 1.6 percent in June from 1.1 percent in May due to the 4.7 percent gain in the prices of services items. Price add-ons in H&R items were also higher at 0.4 percent from zero growth. On the contrary, prices of FLW items dropped to -2.5 percent from 0.3 percent. Price increases in FBT items, clothing items and miscellaneous items remained at 1.7 percent, 0.1 percent and 0.2 percent, respectively.
• Prices in AONCR advanced by 2.6 percent in June from 1.6 percent in May as movements in all the commodity groups were higher during the month. Prices of FBT items gained by 3.3 percent in June from 2.3 percent in May; clothing items, 0.4 percent from 0.3 percent; H&R items, 0.6 percent from 0.4 percent; FLW items, 1.8 percent from 0.9 percent; services, 3.5 percent from 1.0 percent; and miscellaneous items, 0.3 percent from 0.2 percent.
• Month-on-month inflation rates were higher in fourteen regions with SOCCSKSARGEN posting the biggest jump of 5.2 percentage points (6.9% from 1.7%). The highest rate was also noted in SOCCSKSARGEN at 6.9 percent The lowest rate was in CALABARZON at 1.3 percent.
• Higher price additions were still observed in Mindanao regions compared to Luzon and Visayas. Price mark-ups in Luzon were however slowest among the three big island groups.

By Commodity Group, Month-on-Month

• The month-on-month inflation rate at the national level rose to 2.3 percent in June from 1.5 percent in May as price gains in all the commodity groups were higher except for FLW items whose rate was slower at 0.3 percent from 0.7 percent. Faster price hikes were noticed in FBT items at 3.0 percent in June from 2.2 percent; clothing items and miscellaneous items, 0.3 percent from 0.2 percent; H&R items, 0.5 percent from 0.3 percent; and services items, 4.0 percent from 1.3 percent.
• With the rising costs of inputs for production, the price of rice in the Philippines further accelerated to 9.3 percent in June from 5.8 percent in May; NCR, 12.0 percent from 3.9 percent; and AONCR, 8.9 percent from 6.1 percent. The highest monthly growth rate of 31.0 percent was in SOCCSKSARGEN while the lowest rate was seen in CALABARZON at 2.8 percent.
• Typhoon “Cosme” in May affected agricultural crops in Luzon areas particularly the vegetable producing provinces. Price hikes in off-season fruits were also noted in selected regions. Thus, the index for fruits and vegetables in AONCR and in the Philippines correspondingly increased to 4.1 percent and 3.5 percent in June from their respective May rates of 1.4 percent and 2.8 percent. Prices of fruits and vegetables in NCR also moved up but at a slower rate of 1.4 percent from 8.0 percent.
• Reductions in the prices of selected spices and seasonings in NCR pushed down the miscellaneous foods index in the area by -0.1 percent in June from 1.4 percent last month. Meanwhile, the miscellaneous foods index In the Philippines and AONCR with growth rates of 1.0 percent and 1.4 percent, respectively moved slower than their 1.3 percent growth rate last month.
• Upward adjustments in the prices of fresh meat brought about by higher costs of feeds along with higher prices of canned meat in some regions including NCR raised the meat index in Philippines by 1.0 percent; NCR, 0.8 percent; and AONCR, 1.1 percent.
• Prices of corn in the Philippines and AONCR further slowed down to 7.0 percent from 7.3 percent and 7.5 percent, respectively. For five months now, prices of corn in NCR remained stable as its index continued to register a zero growth.
• The lesser fishing trips due to inclement weather condition that was experienced during the month resulted to lower supply of fish in the markets. Thus, the fish index in the Philippines and AONCR correspondingly went up to 0.9 percent and 1.3 percent from 0.1 percent and 0.5 percent, respectively. Meanwhile, prices of fish in NCR continued to decline as the movement in the index remained at -1.3 percent. Enough supply of selected fish species including shells and mollusks brought down their prices in the markets.
• The index of cereal preparations in the Philippines and AONCR posted a growth rate of 1.6 percent and NCR, 1.7 percent brought about by price gains in flour and flour products.
• Prices of gasoline and diesel continued to soar during the month. Tuition fee hikes, increments in the prices of school supplies, textbooks and medicines, increased transport fares and higher charges for personal services in many regions were also observed. All these factors contributed to the 4.0 percent acceleration in the services index in the Philippines; 4.7 percent in NCR; and 3.5 percent in AONCR.
• Price additions in selected construction materials further pulled up the H&R index by 0.5 percent in the Philippines, 0.4 percent in NCR and 0.6 percent in AONCR. Higher rental rates in some regions including NCR also contributed to the uptrend.
• Upward adjustments in the prices of kerosene and LPG in all the regions raised the FLW index in AONCR by 1.8 percent in June from 0.9 percent in May. On the other hand, the FLW index in NCR went down by -2.5 percent from 0.3 percent due to lower generation charges in electricity rates. This opposite trend caused the national index to move up at a slower rate of 0.3 percent from 0.7 percent in May.

NOTES:

1. The second phase CPI price survey reports from Aklan and Ifugao were not received as of July 4, 2008.
2. Revisions on the national and AONCR inflation rates for May 2008 were due to the updates on prices of food items provided by selected provinces.
3. 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).

Source: National Statistics Office
Manila, Philippines