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A . Market Basket
B. Weighting System
Weights for the CPI (1988 = 100)
C. Base Period
D. Index Formula
Pn = current price
E. Sample Outlets
A. Consumer Price Index (CPI)
Consumer price index (CPI) is a measure of change in the average retail prices of goods and services commonly purchased by a particular group of people in a particular area.
B. Market Basket
Market basket refers to a sample of goods and services used to represent all goods and services bought by a particular group of consumers in a particualr area.
C. Base Period
Base period, usually a year, is the reference period of the index number. It is the period at which the index is set to 100.
D. Sample Outlets
Sample outlets are outlets or establishments where prices of sample commodities are quoted.
Weight is a value attached to a commodity or group of commodities to indicate the relative importance of that commodity or group of commodities in the market basket.
F. Inflation Rate
Inflation rate (IR) is the annual rate of change or year-on-year change in CPI. That is,
CPIn = current month's
index for all items
G. Purchasing Power of the Peso
Purchasing Power of the Peso (PPP) shows how much the peso in the base period is worth in another period. It gives an indication of the real value of the peso in a given period relative to the peso value in the base period.
H. General Wholesale Price Index
Wholesale price index (WPI) measures the monthly changes in the general price level of commodities (usually in large quantities) that flow into the wholesale trading system.
The 1978 - based WPI series has a total of 376 commodities or items traded in the wholesale market. These items include producer's materials, consumer goods and capital goods which may either be raw materials, intermediate products or finished goods. Moreover, they may also be domestically produced (including exports) or imported for resale. These items are grouped according to the Philippine Standard Commodity Classification (PSCC).
The weights of the current WPI utilizes the value of sales of commodities traded in the wholesale market in 1978 as derived from the 1974 Input-Output tables. It covers only the National Capital Region or Metro Manila. The weighted average of relatives method, basically the Laspeyre's formula, is used in the construction of WPI.
I. Retail Price Index
Retail price index (RPI) is a measure of the changes in the retail price at which retailers dispose of their goods to consumers or end-users.
The current RPI still uses 1978 as the base year and covers only the National Capital Region (NCR) or Metro Manila.
While the 1972-based series was computed using the geometric mean without any weighting pattern, the present series is constructed using the weights based on the 1974 Input-Output tables on the values of expenditures of goods and services of consumers from the retail sector, estimated at 1978 prices. The weighted average of relatives method, basically the Laspeyre's formula, is used in the computation of the index.
The present market basket has a total of 479 commodities grouped according to the Philippine Standard Commodity Classification (PSCC).
Source: National Statistics Office
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