· The beginning of the year saw a lower headline inflation rate in the Philippines at 8.4 percent from 8.6 percent in December. This was primarily due to the 0.8 percentage point slowdown in the inflation of food, beverages and tobacco (FBT). Slower annual increment in the inflation of services also contributed to the downtrend. Inflation a year ago was 4.1 percent.

· Excluding selected food and energy items, core inflation went up by 0.1 percentage point to 7.9 percent in January from 7.8 percent in December.

· On the other hand, inflation rate in the National Capital Region (NCR) was up by 0.5 percentage point to 8.9 percent in January from 8.4 percent in December as the inflation for fuel, light and water (FLW) significantly accelerated by 9.9 percentage points. In addition, higher inflation rates in clothing, H&R and miscellaneous items were also posted during the month.

· Inflation rate in Areas Outside the National Capital Region (AONCR) decelerated by 0.3 percentage point to 8.3 percent in January from 8.6 percent in December brought about by the slower movements in the inflation of food, beverages and tobacco (FBT), H&R and FLW items.

• Higher water and rental rates in NCR along with the price additions in food prices in AONCR contributed to the month-on-month inflation of 0.7 percent in January, the same rate posted in December.

CONSUMER PRICE INDEX
(2000=100)
JANUARY 2005

l By Region, Year-on-Year

· The inflation rate in NCR grew by 0.5 percentage point to 8.9 percent in January from 8.4 percent in December.

· Inflation rate in AONCR at 8.3 percent in January was slower by 0.3 percentage point from 8.6 percent in December. Eight regions posted lower inflation rates with the biggest slowdown of 1.5 percentage points (10.9 percent from 12.4 percent) noted in Southern Mindanao. The lowest rate was recorded in MIMAROPA at 6.9 percent while the highest rate was still seen in Southern Mindanao at 10.9 percent.

l By Commodity Group, Year-on-Year

· Inflation for FBT and services were correspondingly slower at 7.4 percent and 13.6 percent in January from 8.2 percent and 14.1 percent in December. Meanwhile, inflation rate for clothing increased to 3.5 percent in January from 3.3 percent in December; H&R, 4.2 percent from 3.5 percent; FLW, 20.1 percent from 17.9 percent; and miscellaneous items, 2.9 percent from 2.8 percent.

· Inflation rate for food alone slowed to 7.6 percent in January from 8.5 percent in December.

· Slower annual inflation rates were recorded in the prices of corn, 12.4 percent in January from 12.8 percent in December; eggs, 5.5 percent from 6.7 percent; fish, 9.0 percent from 10.2 percent; fruits and vegetables, 9.7 percent from 10.1 percent; and meat, 9.7 percent from 14.2 percent. However, higher annual price hikes were seen in rice, 4.3 percent from 4.0 percent; cereal preparations, 9.3 percent from 9.2 percent; and miscellaneous foods, 6.0 percent from 5.3 percent. Gains in the prices of dairy products remained at 10.4 percent.

• In NCR, inflation rate for clothing climbed to 3.2 percent in January from 3.0 percent in December; H&R, 4.6 percent from 2.9 percent; FLW, 32.5 percent from 22.6 percent; and miscellaneous items, 2.7 percent from 2.6 percent. On the other hand, slower inflation rates were noticed in the prices of FBT and services items at 5.9 percent and 12.4 percent from 7.5 percent and 13.7 percent respectively.
• The inflation rate for food alone in NCR eased to 6.0 percent in January from 7.7 percent in December.
• Lower annual price increments were observed in all the food groups except for cereal preparations and dairy products whose inflation rates correspondingly went up to 10.6 percent and 8.9 percent from 10.0 percent and 8.8 percent respectively. Annual price additions in rice slowed to 0.1 percent in January from 0.6 percent in December; corn, 8.0 percent from 9.5 percent; eggs, 2.8 percent from 5.8 percent; fish, 10.3 percent from 11.6 percent; fruits and vegetables, 13.2 percent from 13.7 percent; meat, 5.2 percent from 11.3 percent; and miscellaneous foods, 2.9 percent from 3.3 percent.
• In AONCR, inflation rate for FBT moved slower at 7.9 percent in January from 8.4 percent in December; H&R, 3.9 percent from 4.0 percent; and FLW, 14.1 percent from 15.4 percent. However, inflation for clothing and miscellaneous items correspondingly rose to 3.5 percent and 3.0 percent from their respective last month’s rates of 3.4 percent and 2.8 percent. Inflation for services remained at 14.3 percent.
• Inflation rate for food alone in AONCR decelerated to 8.2 percent in January from 8.8 percent in December.
• Slower price increases were observed in corn, 12.4 percent in January from 12.9 percent in December; cereal preparations, 8.8 percent from 8.9 percent; eggs, 6.4 percent from 7.1 percent; fish, 8.7 percent from 9.8 percent; fruits and vegetables, 8.6 percent from 9.0 percent; and meat, 11.7 percent from 15.6 percent. Higher annual price hike was however noted in miscellaneous foods, 7.3 percent from 6.2 percent while annual price adjustment in dairy products was still at 11.0 percent.
• The annual growth in the price of rice picked up to 4.9 percent in January from 4.6 percent in December as twelve regions recorded higher rates. The biggest increase of 2.8 percentage points (5.6 percent from 2.8 percent) was seen in CAR.

l By Region, Month-on-Month

• Prices in NCR slightly gained at 1.1 percent in January from 1.0 percent in December mainly brought about by the 8.4 percent uptick in the prices of FLW items from zero growth last month. Moreover, prices of H&R items also rose to 2.0 percent in January from zero growth. On the other hand, monthly growth in the prices of clothing items at 0.2 percent was slower than the 0.4 percent increase recorded last month while movement in the prices of miscellaneous items was still posted at 0.3 percent. Prices of FBT items and services items correspondingly decreased to -0.3 percent and -0.4 percent from 2.7 percent and 0.4 percent.
• Prices in AONCR went up by 0.6 percent in January, the same rate registered in December. Price movements in clothing and miscellaneous items still remained at 0.3 percent and H&R items, 0.2 percent. On the other hand, prices of FBT items grew by 1.0 percent from 0.5 percent while prices of FLW items declined by -0.4 percent from 2.5 percent.

l By Commodity Group, Month-on-Month

• Consumer prices at the start of the year generally picked up at its December rate of 0.7 percent. Corresponding price additions in H&R and FLW items were observed at 1.0 percent and 2.6 percent in January from 0.1 percent and 1.7 percent in December. Clothing and miscellaneous items retained their last month’s price increase of 0.3 percent. Meanwhile, increments in the prices of FBT and services items correspondingly eased to 0.7 percent and 0.1 percent from 1.0 percent and 0.4 percent.
• Various fish species were continued to be priced higher this month as the cold weather condition affected the volume of catch. The group’s index in the Philippines and AONCR correspondingly grew by 2.1 percent and 2.0 percent from 1.6 percent and 0.8 percent respectively. However, price increases in NCR improved to 2.5 percent from 5.0 percent.
• Fruits and vegetables in NCR significantly dropped by 6.1 percent from 12.2 percent last month due to abundant supply. However, the group’s index in AONCR generally went up to 1.4 percent from 0.6 percent due to the effect of the typhoons that hit production areas during the last quarter of 2004. Overall, the index went down by 0.4 percent from 3.3 percent.
• Price hikes in fresh meat (chicken, beef and pork) and selected processed meat raised the group’s index in AONCR to 1.2 percent from 1.1 percent. On the other hand, sufficient supply of chicken in NCR brought down the meat index in the area by 0.2 percent during the month. Hence, the national index moved up at a slower rate of 0.8 percent from 1.9 percent.
• Higher prices of meals eaten outside the home were posted in many regions. Moreover, gains in the prices of cooking oil, powdered tonic drink, coffee, sugar, margarine and selected spices and seasonings were noted during the month. These factors pulled up the miscellaneous foods index in the Philippines and AONCR by 0.9 percent and 1.3 percent. In NCR, the group’s index grew slightly by 0.1 percent from zero growth as prices of powdered tonic drink, coffee, cooking oil and margarine also moved up.
• Price additions in LPG and kerosene along with higher electricity and water rates significantly raised the FLW index in NCR by 8.4 percent from zero growth last month. However, decreases in the prices of LPG and kerosene posted in many regions resulted to a -0.4 percent decline in the FLW index in AONCR. Thus, the overall index accelerated by 2.6 percent from 1.7 percent.
• Upward adjustments in the prices of selected construction materials and higher rental rates in selected regions pushed the H&R index in the Philippines by 1.0 percent; NCR, 2.0 percent; and AONCR, 0.2 percent.
• The continued price hikes in some items for personal care and effects and laundry and cleaning supplies pegged an increase of 0.3 percent in the miscellaneous items index.

NOTES:

1. The CPI survey reports from the following provinces were not received as of February 4, 2005:
    
   1. Bohol -1st phase survey
   2. Albay -2nd phase survey
   3. Camarines Sur -2nd phase survey
   4. Sulu -1st and 2nd phase surveys
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).

3. Backcasted CPI monthly series starting from 1957 are already available in the same office above.