Headline Inflation Rate Rises to 3.5 percent in September 2010

(Posted 26 October 2010)

Year-on-year headline inflation rate for all items in the Philippines rose to 3.5 percent in September 2010 from 0.6 percent in September 2009. Similarly, the year-on-year headline inflation rates in the National Capital Region (NCR) and areas outside the NCR (AONCR) both went up by 3.5 percent compared with their September 2009 rates of -0.3 percent and 1.1 percent, respectively. Core inflation rate, which excludes price change of selected food and energy items, also increased to 3.8 percent in September 2010 from 2.7 percent the same month a year ago.

Source: CPI/Inflation Rates, National Statistics Office (NSO)

Year-on-year growth rates of consumer price indices (CPIs) for Food, Beverages and Tobacco (FBT), Fuel, Light and Water (FLW) and Services increased to 3.2 percent, 11.8 percent and 3.2 percent in September 2010 from their September 2009 rates of 2.2 percent, -3.4 percent and -3.3 percent, respectively. On the other hand, the CPIs for Clothing, Housing and Repairs, and Miscellaneous Items posted lower year-on year growth rates of 1.9 percent, 1.6 percent and 1.3 percent in September 2010 compared with their rates the same month a year ago.

The seasonally adjusted consumer price index (SACPI) for FBT in the NCR recorded zero growth in September from its August 2010 rate of 0.3 percent, while SACPI for FBT in AONCR remained at its previous month’s growth rate of 0.4 percent. Based on the SACPI, the prices of non-FBT in NCR posted a month-on-month rate of -0.1 percent from its previous month’s rate of 0.6 percent while the prices of non-FBT in AONCR went up by 0.1 percent compared with last month’s -0.1 percent growth rate.

The generation of the CPI, inflation rates based on the CPI and the seasonally-adjusted CPI are designated statistical activities of the NSO under Executive Order (EO) 352, Designation of Statistical Activities That Will Generate Critical Data for Decision-Making of the Government and the Private Sector, issued on July 1, 1996. Per the EO, data on CPI and seasonally adjusted CPI should be made available five days and ten days, respectively, after the reference month. The NSO released the September 2010 CPI on October 5, 2010, as scheduled in EO 352 while the seasonally adjusted CPI was released five days in advance, as per EO 352. The CPI uses 2000 as base year.

For further inquiries on the CPI, please contact Ms. Rosie B. Sta. Ana, Chief of the Economic Indicators and Indices Division of the NSO, at telefax number 716-3935 or e-mail address R.Staana@census.gov.ph.

Links to data sources:

http://www.census.gov.ph/data/pressrelease/2010/cp1009tx.html
http://www.census.gov.ph/data/pressrelease/2010/cpsa1009tx.html
http://www.census.gov.ph/data/sectordata/2010/cp100908r.htm

what-iS-TAT? *

Headline inflation measures the changes in the cost of living based on movements in the prices of a specified basket of major commodities and refers to the year-on-year change in the Consumer Price Index (CPI).

Core inflation, on the other hand, is a measure of inflation that aims to capture the permanent component of the inflationary process that can be influenced by monetary policy. In the Philippines, the official core inflation measure is computed using the exclusion method. This approach was chosen over the trimmed mean and weighted median methods for the following reasons: (a) ease of construction; (b) understandability by the general public; (c) easy replication and verification by others; (d) increased accountability and transparency of measurement; and (e) timeliness. Exclusion method is done by taking out the prices of a fixed, pre-specified set of items from the CPI basket. The excluded components are considered to be either volatile or susceptible to supply disturbances and would typically consist of food and energy items. This is based on the notion that the markets related with these goods are prone to supply shocks.

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* what-iS-TAT? box contains snippets of official concepts and definitions, related surveys, censuses and administrative-based record systems, standards and classification systems, statistical laws and other legal provisions, NSCB Board Resolutions, and other related information on statistics.

Links to the information on what-iS-TAT?:

Headline inflation: http://www.nscb.gov.ph/glossary/terms/indicatorDetails.asp?strIndi=139
CPI: http://www.nscb.gov.ph/glossary/terms/indicatorDetails.asp?strIndi=99
Core inflation: http://www.nscb.gov.ph/glossary/terms/indicatorDetails.asp?strIndi=140; http://www.nscb.gov.ph/glossary/terms/indicatorDetails.asp?strIndi=141
Exclusion method: http://www.nscb.gov.ph/stats/cpi/primer/default.asp