People living in the Cordillera may have to be resourceful in managing their finances these days given a higher inflation rate and the reduced purchasing power of the Philippine peso recorded for the month of July.
This, as consumers in the region are paying more on certain products and services than what are being paid by consumers in other regions due to the surging prices of petroleum products.
Based on the latest data released by the Philippine Statistical Authority-Cordillera to the media on Aug. 31, the Cordillera registered 7.3 percent inflation in July, which jumped from the July 2021 inflation of 3.3 percent.
PSA-Cordillera Chief Statistical Specialist Aldrin Federico Bahit, Jr. told reporters the region’s inflation is higher than the national inflation of 6.4 percent. The July 2022 numbers however are lower compared with June, where the region recorded 7.5 inflation rate.
Bahit said Benguet posted the highest inflation rate in July with 9.5, followed by Kalinga and Mountain Province, both with 8.0; Apayao with 7.7; Abra, 6.2; Baguio City, 6.0; and Ifugao, 5.5. All have increased compared with the July 2021 rates.
Inflation rate is the annual change or the year-on-year change in the consumer price index (CPI) expressed in percent and interpreted in terms of declining purchasing power of money.
Bahit said higher annual increases were noted in the indices of transport services which increased by 28.7 from 104.0 in July 2021 to 133.8 in July 2022; alcoholic beverages and tobacco from 128.8 to 141.2 or an increase of 9.6; restaurants and accommodation – 114.8 to 123.2 or 7.3; recreation, sports, and culture – 105.9 to 108.9 or 2.8; personal care and miscellaneous goods and services – 112.1 to 112.7 or 0.4; and furnishing, household equipment, and routine household maintenance from 108.6 to 116.6 or 2.8.
Information and communication services on the other hand retained their previous months’ inflation rates, which was 101.4 in both June and July 2021, and 101.9 on the same months this year. Its annual inflation is 0.5.
Clothing and footwear also retained its June-July rates at 3.2 percent last year and this year.
“The region’s inflation was due to the increases in the prices of transport services, driven by higher prices of petroleum products; and higher prices of food services and Cordillera products, including fish products it imports. If we look at the price movement, the inflation in the region is higher than the national inflation mainly because of the higher cost of transport services, which affected the prices of goods and services,” Bahit said.
Also, the Cordillera’s CPI steadily increased monthly from July 2021 at 107.7 index points up July 2022 at 115.6. Its base year or period is July 2018, which recorded a CPI of 100.1.
The CPI is an indicator of the change in the average prices of a fixed basket of goods and services commonly purchased by households relative to a base year. It is used in measuring general inflation, computing the purchasing power of the peso, setting wages and non-wage benefits; evaluating interest rates, housing rates, and other contractual payments; estimating real consumption and income, and assessing per capita food threshold for poverty estimation.
Bahit also reported the purchasing power of the peso in the Cordillera had generally weakened in July 2022, where the value of P1 is 87 centavos, compared to 93 centavos in July 2021.
Among the provinces, Abra and Baguio City had the highest peso value at 88 centavos, followed by Apayao, Benguet, and Ifugao with 86 centavos; and Mountain Province with the lowest peso value with 83 centavos.
Bahit said this means in the region, a basket of goods that can be bought with P100 in December 2018 (base year) is worth P115.6 in July 2022.
“Kapag tumaas ang presyo ng bilihin, mas konti ang nabibili ng ating pera. With this situation, upang hindi tayo masyadong mahirapan mag-cope sa pagtaas ng presyo ng mga bilihin, medyo tingnan na ang ating spending pattern. For example, kung dati ang source of protein natin ay beef na pwede ring makuha sa fish, we may want to shift to fish muna or mas murang (alternative) para mas maraming mabibili ang meron tayong pera,” he said. – Hanna C. Lacsamana