Prices of commodities in the consumer basket rose faster during the fourth quarter compared to the first three quarters of the year. The overall Consumer Price Index (CPI) in December was posted at 144.2, higher by 2.4 index points from 141.8 in October. The items under Food, Beverages & Tobacco (FBT) and Fuel, Light & Water (FLW) contributed largely to the hike, which climbed by 3.1 and 6.7 index points, respectively, from October to December. The heavily weighted FBT item usually exhibits a spike at the onset of the holiday season, while the FLW item continued to manifest the effects of rising oil and petroleum prices in the world market.

The year-on-year inflation rate rose from 3.4 percent in October to 4.8 percent in December, the highest since October last year. Although the average inflation rate of 4.1 percent for the fourth quarter was higher than the previous quarter's 2.7 percent, it is still lower than than the average of 4.3 percent in the same quarter last year.

The higher increment in CPI and inflation rate resulted to a decreased purchasing power of peso (PPP) from P0.71 in October to P0.69 in December.

Among the provinces, Albay continued to exhibit a higher cost of living as manifested by higher CPI and inflation rate, and consequently lower PPP. On the other hand, Camarines Sur had the lowest CPI and inflation rate and therefore the highest PPP, indicating a relatively lower cost of living for the consumers.