· The year-on-year headline inflation rate at the national level further picked up to 12.2 percent in July from 11.4 percent in June. This was the highest rate since December 1991 (13.2%). Higher annual inflation rates were registered in all the commodity groups except in the fuel, light and water (FLW) index. Inflation a year ago was 2.6 percent.

· On the other hand, annual inflation rate in the National Capital Region (NCR) slowed down to 8.6 percent in July from 9.2 percent in June due to the negative annual rate posted in the FLW index. The slower annual inflation rate for food, beverages and tobacco (FBT) index also contributed to the downtrend. The rest of the commodity groups either remained at its last month’s rate or moved up at higher rates.

· In Areas Outside the National Capital Region (AONCR), annual inflation further accelerated to 13.9 percent in July from 12.3 percent in June as all the commodity groups continued to record higher annual inflation rates.

• Excluding selected food and energy items, core inflation slipped to 6.3 percent in July from 6.6 percent in June.

• Decreases in the prices of selected fish species and slower increments in the prices of rice, corn, flour and flour products, vegetables and meat generally observed during the month caused the overall month-on-month inflation rate to decelerate to 1.5 percent in July from 2.3 percent in June.

CONSUMER PRICE INDEX
(2000=100)
JULY 2008

By Region, Year-on-Year

• The annual inflation rate in NCR eased to 8.6 percent in July from 9.2 percent in June.
• Annual inflation in AONCR further went up to 13.9 percent in July from 12.3 percent in June. All the regions posted higher annual rates except for SOCCSKSARGEN. The biggest acceleration of 5.8 percentage points was noted in Eastern Visayas (20.0% from 14.2%) followed by Zamboanga Peninsula (20.3% from 16.3%) at 4.0 percentage points. Among the regions, the highest annual inflation rate was still registered in Caraga at 22.2 percent.

By Commodity Group, Year-on-Year

• Except for the FLW index whose annual inflation continued to slow down at 5.5 percent in July from 7.6 percent in June, inflation rates for all the commodity groups further moved up at higher rates. Annual inflation rate for FBT increased to 17.8 percent in July from 16.5 percent in June; clothing, 4.5 percent from 4.2 percent; housing and repairs (H&R), 4.6 percent from 4.3 percent; services, 12.4 percent from 9.9 percent; and miscellaneous items, 3.0 percent from 2.9 percent.
• The overall annual inflation rate for food alone further climbed to 18.6 percent in July from 17.4 percent in June.
• Higher year-on-year inflation was noted in rice at 50.0 percent in July from 43.0 percent in June; corn, 40.6 percent from 34.3 percent; cereal preparations, 17.6 percent from 16.6 percent; fruits and vegetables, 13.8 percent from 12.5 percent; and miscellaneous foods, 8.9 percent from 8.3 percent. On the other hand, upward price movement was slower in dairy products at 13.1 percent from 13.5 percent; eggs, 6.0 percent from 7.5 percent; fish, 8.5 percent from 10.8 percent; and meat, 11.0 percent from 11.4 percent.
• In NCR, generation charges in the electricity rates during the month were lower compared to July 2007. This primarily pushed down the annual price movement in the FLW items by -4.5 percent in July from 3.4 percent in June. Annual price increments in FBT items also eased to 13.1 percent from 14.1 percent. However, annual inflation for clothing was higher at 5.3 percent from 5.2 percent; H&R, 2.9 percent from 2.6 percent; and services, 15.6 percent from 12.8 percent while those for miscellaneous items remained at 1.9 percent.
  • Inflation rate for food alone in NCR at 13.7 percent in July was slower than its June inflation figure of 14.7 percent.
  • On an annual basis, prices of eggs dropped to -3.4 percent in July from 2.2 percent in June. Moreover, the annual price gain in corn slowed down to 14.1 percent in July from 17.5 percent in June; dairy products, 12.0 percent from 12.2 percent; fish, 5.2 percent from 11.8 percent; and meat, 9.3 percent from 11.4 percent. On the contrary, the annual growth in cereal preparations index was higher at 18.2 percent from 17.5 percent; fruits and vegetables, 10.8 percent from 8.6 percent; and miscellaneous foods, 6.5 percent from 6.4 percent. Annual inflation for rice remained at 60.5 percent.
• In AONCR, all the commodity groups recorded higher annual inflation rates during the month. Annual price hikes in FBT items climbed to 19.2 percent in July from 17.3 percent in June; clothing, 4.1 percent from 3.8 percent; H&R, 6.0 percent from 5.7 percent; FLW, 11.3 percent from 9.9 percent; services, 10.6 percent from 8.2 percent; and miscellaneous items, 3.4 percent from 3.3 percent.
  • Measured from a year ago, prices for food alone in AONCR rose to 20.2 percent in July to 18.2 percent in June
  • All the regions in AONCR continued to register higher annual growth rates in rice except for Davao, SOCCSKSARGEN and ARMM. The rice index in AONCR jumped by 48.6 percent in July from 40.6 percent in June. The biggest increment of 25.2 percentage points (55.0% from 29.8%) was observed in Eastern Visayas followed by Central Luzon at 14.9 percentage points (52.6% from 37.7%).
  • The annual inflation in corn further advanced by 41.0 percent in July from 34.5 percent in June; cereal preparations, 17.4 percent from 16.3 percent; eggs, 9.2 percent from 9.1 percent; fruits and vegetables, 14.7 percent from 13.6 percent; meat, 11.8 percent from 11.4 percent; and miscellaneous foods, 10.0 percent from 9.1 percent. Meanwhile, the annual growth rates for dairy products and fish were correspondingly slower at 13.6 percent and 9.2 percent from 14.0 percent and 10.5 percent, respectively.

By Region, Month-on-Month

• Increases in consumer prices in NCR eased to 1.0 percent in July from 1.6 percent in June. Price increments in FBT items slowed down to 0.1 percent in July from 1.7 percent in June; H&R items, 0.3 percent from 0.4 percent; and services items, 3.7 percent from 4.7 percent. Price uptick in FLW items was however higher at 0.3 percent from -2.5 percent while those for clothing items remained at its last month’s rate of 0.1 percent. Prices of miscellaneous items appeared stable as it posted a zero growth from 0.2 percent.
• Prices in AONCR increased by 1.8 percent in July, slower than its June rate of 2.6 percent. Increments in the prices of FBT and services items slipped to 2.0 percent and 2.7 percent in July from their respective last month’s rates of 3.3 percent and 3.5 percent. On the other hand, upward price adjustments in FLW items were higher at 2.1 percent from 1.8 percent. Price gains in clothing, H&R and miscellaneous items correspondingly remained at 0.4 percent, 0.6 percent and 0.3 percent.
• Eleven regions registered slower month-on-month inflation rates with the lowest rate of -1.8 percent noted in SOCCSKSARGEN.
• Excluding NCR, Visayas posted the highest price increment compared to Luzon and Mindanao.

By Commodity Group, Month-on-Month

• Increases in consumer prices in the Philippines improved to 1.5 percent in July from 2.3 percent in June. Slowdowns in price increases were seen in FBT items at 1.6 percent in July from 3.0 percent in June; services items, 3.1 percent from 4.0 percent; and miscellaneous items, 0.2 percent from 0.3 percent. However, price additions were higher in FLW items at 1.5 percent from 0.3 percent while those for clothing and H&R items remained at their corresponding last month rates of 0.3 percent and 0.5 percent.
• The fish scare brought about by the MV Princess of the Star tragedy resulted to low consumer demand of selected fresh fish species. Thus, prices of fish in the three areas went down during the month: Philippines, -1.9 percent from 0.9 percent; NCR, -5.5 percent from -1.3 percent; and AONCR, -1.1 percent from 1.3 percent.
• The onset of harvest season of palay caused prices of rice to decline in Davao, SOCCSKSARGEN and ARMM. The harvest season also resulted to slower price increases of rice in the six regions. Thus, the rate of price gains in rice in the Philippines decelerated to 5.3 percent in July from 9.3 percent in June; NCR, 0.5 percent from 12.0 percent; and AONCR, 6.0 percent from 8.9 percent. SOCCSKSARGEN posted the lowest rate of -13.7 percent while Eastern VIsayas recorded the highest rate at 19.4 percent.
• Higher inputs for the production of corn continued to push its prices in the Philippines and AONCR by 4.4 percent. This was however slower than their last month’s rate of 7.0 percent. Prices of corn in NCR still posted a zero growth for six consecutive months.
• With higher costs of feeds, prices of fresh, processed and canned meat and meat products went up during the month. In addition, the demand for meat was higher as consumers shifted from fish to meat. These factors caused the group’s index in the Philippines and AONCR to climb by 0.7 percent but slower than their corresponding last month’s growth rates of 1.0 percent and 1.1 percent. In NCR, uptick in the prices of fresh and processed meat pulled up its index in the area by 0.8 percent, the same rate posted last month.
• Lesser volume of deliveries of vegetables in the markets as an aftermath of the typhoons that affected producing areas along with upward adjustments in the prices of fruits raised the group’s index in the three areas by 2.0 percent during the month.
• The miscellaneous foods index rose by 0.7 percent in the Philippines, 0.3 percent in NCR and 0.9 percent in AONCR. This was brought about by the increments in the prices of coffee, cocoa, tea, salt and cooking oil along with higher prices of meals eaten outside the home in selected regions including NCR.
• Price additions in flour and flour products pushed up the index of cereal preparations in the Philippines and AONCR by 1.3 percent and in NCR, 1.4 percent.
• Petroleum products particularly gasoline and diesel were still priced higher during the month. Increased transport fares, movie admission fees and higher charges for laundry and dry cleaning services in many regions including NCR were also noted during the month. Thus, the services index in the Philippines picked up to 3.1 percent; NCR, 3.7 percent; and AONCR, 2.7 percent. These were however slower than their respective last month’s growth rates of 4.0 percent, 4.7 percent and 3.5 percent.
• The continued acceleration in the prices of kerosene and LPG nationwide pushed up the FLW index in the Philippines by 1.5 percent; NCR, 0.3 percent; and AONCR, 2.1 percent. Price gains in coconut and wood charcoal in selected regions including NCR also contributed to the uptrend.
• The H&R index in the Philippines rose by 0.5 percent; NCR, 0.3 percent; and AONCR, 0.6 percent due to the price hikes in selected construction materials.

NOTES:

1. The first phase CPI price survey report from Aklan was not received as of August 4, 2008.
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