· The country’s year-on-year headline inflation rate further increased to 12.5 percent in August from 12.3 percent in July. Annual inflation rates were higher in all the commodity groups except in the food, beverages and tobacco (FBT) index. Inflation a year ago was 2.4 percent.

· Likewise, annual inflation rate in the National Capital Region (NCR) picked up to 8.7 percent in August from 8.6 percent in July due to the upward movements in the rates of clothing, housing and repairs (H&R) and miscellaneous items. A faster annual rate recorded in the fuel, light and water (FLW) index also contributed to the uptrend.

· Annual inflation rate in Areas Outside the National Capital Region (AONCR) advanced to 14.2 percent in August from 13.9 percent in July brought about by the acceleration in inflation rates in all the commodity groups except in FBT.

• Excluding selected food and energy items, core inflation rose to 7.0 percent in August from 6.3 percent in July.

• The overall month-on-month inflation went up at a slower rate of 0.3 percent in August from 1.6 percent in July. It resulted from a zero growth posted in the FBT index and the slowdowns in the increments in the prices of all the other commodity groups except for miscellaneous items.

CONSUMER PRICE INDEX 
(2000=100) 
AUGUST 2008

By Region, Year-on-Year

• The annual inflation rate in NCR picked up to 8.7 percent in August from 8.6 percent in July.
• Annual inflation in AONCR increased to 14.2 percent in August from 13.9 percent in July. Higher annual inflation rates were observed in nine regions with the biggest uptick of 1.5 percentage points (10.8% from 9.3%) registered in CALABARZON. Among the regions, inflation rate was still highest in Caraga at 22.1 percent while the lowest rate was in CALABARZON at 10.8 percent.

By Commodity Group, Year-on-Year

• All the commodity groups continued to record higher annual price hikes in August except for FBT whose annual inflation was slower at 17.2 percent from 17.8 percent. Annual inflation rate for clothing moved up to 4.6 percent in August from 4.5 percent in July; H&R, 5.0 percent from 4.6 percent; FLW, 7.2 percent from 5.5 percent; services, 13.5 percent from 12.5 percent; and miscellaneous items, 3.3 percent from 3.0 percent.
• At the national level, the annual inflation rate for food alone decelerated to 18.1 percent in August from 18.6 percent in July.
• Slower annual price gains were noticed in the index of rice, 45.1 percent in August from 50.0 percent in July; corn, 31.6 percent from 40.6 percent; and meat, 10.6 percent from 11.0 percent. Higher annual price uptick were however seen in cereal preparations, 18.8 percent from 17.6 percent; dairy products, 13.8 percent from 13.1 percent; eggs, 6.2 percent from 6.0 percent; fish, 9.4 percent from 8.5 percent; fruits and vegetables, 16.1 percent from 13.8 percent; and miscellaneous foods, 9.1 percent from 8.9 percent.
• In NCR, the annual inflation rate for clothing was higher at 5.5 percent in August from 5.3 percent in July; H&R, 3.1 percent from 2.9 percent; and miscellaneous items, 2.4 percent from 1.9 percent. Moreover, a faster pace of annual price adjustment was also noticed in the FLW items at -1.7 percent from -4.5 percent. On the other hand, annual price add-ons in FBT and services items decelerated to 11.9 percent and 15.5 percent, respectively from their corresponding last month’s rates of 13.1 percent and 15.6 percent.
  • Inflation rate for food alone in NCR continued to post a slower rate at 12.4 percent in August from 13.7 percent in July.
  • The annual price movement in eggs further declined to -4.0 percent in August from -3.4 percent in July. In addition, the annual growth in rice index was slower at 47.8 percent in August from 60.5 percent in July; corn, 4.7 percent from 14.1 percent; fish, 4.8 percent from 5.2 percent; meat, 7.7 percent from 9.3 percent; and miscellaneous foods, 5.8 percent from 6.5 percent. Meanwhile, annual price change in the cereal preparations index was higher at 19.9 percent from 18.2 percent; dairy products, 12.5 percent from 12.0 percent; and fruits and vegetables, 13.3 percent from 10.8 percent.
• In AONCR, annual inflation rates in all the commodity groups were higher during the month except for FBT index whose annual price addition was slower at 18.9 percent from 19.2 percent. Annual inflation in clothing items picked up to 4.3 percent in August from 4.1 percent in July; H&R, 6.4 percent from 6.0 percent; FLW, 12.4 percent from 11.3 percent; services, 12.3 percent from 10.7 percent; and miscellaneous items, 3.7 percent from 3.4 percent.
  • On an annual basis, price gains for food alone in AONCR decelerated to 19.9 percent in August from 20.2 percent in July.
  • As ten regions in AONCR posted slower annual growth rates in rice, the index in the area eased to 44.7 percent in August from 48.6 percent in July. The biggest slowdown of 20.2 percentage points (42.7% from 62.9%) was noted in Davao.
  • Lower annual growth rate was also seen in corn at 32.1 percent in August from 41.0 percent in July. On the other hand, higher annual price addition was noticed in cereal preparations at 18.5 percent from 17.4 percent; dairy products, 14.4 percent from 13.6 percent; eggs, 9.6 percent from 9.2 percent; fish, 10.5 percent from 9.2 percent; fruits and vegetables, 16.9 percent from 14.7 percent; meat, 11.9 percent from 11.8 percent; and miscellaneous foods, 10.5 percent from 9.9 percent.

By Region, Month-on-Month

• Price increments in NCR slackened to 0.1 percent in August from 1.0 percent in July as prices of FBT items dropped by -0.2 percent from 0.1 percent. Moreover, price increases in H&R and services items were slower at 0.2 percent from 0.3 percent and 3.7 percent, respectively. Meanwhile, prices of miscellaneous items inched up to 0.6 percent from zero growth while those for clothing items remained at its last month rate of 0.1 percent. Prices of FLW items appeared stable as it recorded a zero growth from 0.3 percent.
• The slowdowns in the monthly growth rates of all the commodity groups except for miscellaneous items further pushed down the month-on-month inflation in AONCR to 0.4 percent in August from 1.8 percent in July. Upward adjustments in the prices of FBT items slid to 0.1 percent from 2.0 percent; clothing items, 0.3 percent from 0.4 percent; H&R items, 0.4 percent from 0.6 percent; FLW items, 0.8 percent from 2.1 percent; and services items, 1.6 percent from 2.7 percent. Price add-ons in miscellaneous items remained at 0.3 percent.
• Except Ilocos and Caraga, all the regions registered either slower or negative monthly growth rates during the month. The lowest rate of -1.5 percent was noticed in Davao and SOCCSKSARGEN while the highest rate of 1.2 percent was noted in CAR, Ilocos and CALABARZON.
• Price movements in Mindanao regions were lower than those of Luzon and Visayas. Price hikes in Luzon were fastest compared to the two island groups.

By Commodity Group, Month-on-Month

• Measured from a month ago, prices at the national level moved at a slower pace of 0.3 percent in August from 1.6 percent in July. Price increases in clothing items eased to 0.2 percent in August from 0.3 percent in July; H&R items, 0.4 percent from 0.5 percent; FLW items, 0.6 percent from 1.5 percent; and services items, 1.0 percent from 3.1 percent. However, price increment in the miscellaneous items index was higher at 0.4 percent from 0.2 percent while FBT items posted a zero growth from 1.6 percent.
• The massive infusion of NFA rice in the markets brought down prices of commercial rice during the month. Thus, the rice index in the Philippines dropped by -2.2 percent in August from 5.3 percent in July; NCR, -5.2 percent from 0.5 percent; and AONCR, -1.7 percent from 6.0 percent. Davao had the lowest rate of -11.3 percent while CAR recorded the highest rate at 4.8 percent.
• The price of corn respectively declined by -6.1 percent and -6.2 percent in the Philippines and AONCR due to enough supply brought about by the harvest season. Meanwhile, the price of corn in NCR slightly went up by 0.1 percent from zero growth.
• Higher prices of wheat in the global markets in the past months continued to pull up prices of flour and flour products (bread, biscuits and noodles) during the month. Hence, the index for cereal preparations in the Philippines grew by 1.2 percent; NCR, 1.5 percent; and AONCR, 1.1 percent.
• With higher cost of production for milk and milk products, the dairy products index in the Philippines rose by 1.2 percent; NCR, 1.5 percent; and AONCR, 1.1 percent.
• Lower production of eggs during the cold month limited its supply in the markets. This raised the group’s index in the Philippines by 1.0 percent; NCR, 0.4 percent; and AONCR, 1.2 percent.
• The stormy weather conditions experienced during the month that limited the supply of marine fish species thereby increasing their prices during the month. Higher prices of canned fish were also noted. Thus, the fish index in the Philippines climbed by 0.9 percent from -1.9 percent; NCR, 0.1 percent from -5.5 percent; and AONCR, 1.0 percent from -1.1 percent.
• Prices of vegetables went up as heavy rains brought about by typhoon “Karen” during the month affected the deliveries of vegetables in the markets. Prices of selected fresh fruits were also pegged higher this month. These factors caused the index of fruits and vegetables in the Philippines to accelerate by 1.9 percent; NCR, 3.1 percent; AONCR, 1.6 percent.
• Increments in the prices of canned and processed meat in many regions mainly pushed up the meat index in the Philippines and AONCR by 0.2 percent and 0.6 percent, respectively. Higher prices of chicken and beef in some regions also contributed to the uptrend. On the contrary, the improved supply of hogs in the NCR markets pulled down prices of pork during the month. Decreases in the prices of beef and chicken were also noticed. All these factors resulted to the 0.6 percent drop in the meat index in NCR.
• Lower prices of selected spices and seasonings in NCR pulled down the miscellaneous foods index in the area by -0.1 percent. However, the group’s index in the Philippines and AONCR correspondingly picked up by 0.5 percent and 0.8 percent due to the upward price adjustments in coffee, tea, powdered tonic drink, cooking oil, margarine and selected spices and seasonings.
• The series of price reductions in gasoline and diesel caused the services index in the Philippines to move at a slower pace of 1.0 percent from 3.1 percent; NCR, 0.2 percent from 3.7 percent; and AONCR, 1.6 percent from 2.7 percent.
• Price add-ons in selected construction materials in many regions including NCR raised the H&R index in the Philippines and AONCR by 0.4 percent and 0.2 percent in NCR.
• The FLW indices in the Philippines and AONCR correspondingly went up by 0.6 percent and 0.8 percent in August primarily due to higher prices of kerosene and firewood. Meanwhile, prices of FLW items in NCR generally remained stable as its group’s index had a zero growth during the month.

NOTES:

1. Revision on the national inflation rate for July 2008 was due to the updates on tuition fees provided by the province.
2. 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