The Philippine Statistics Authority (PSA) has rebased the consumer price index (CPI), which is used to determine the inflation rate, to base year 2018 starting next month.
The PSA said it has rebased the CPI for all income households to base year 2018 from base year 2012.
This will begin next month for the reporting of the January 2022 inflation rate.
The CPI is an indicator of the change in the average prices of goods and services commonly purchased by consumers relative to a base year.
It serves as a basis for economic analysis, collective bargaining agreements, wage adjustments, and for monitoring the effects of government economic policy on households.
“The rebasing of the CPI is done periodically to ensure that the CPI market basket continues to capture goods and services commonly purchased by households over time,” the PSA said.
It also said the agency aims to update expenditure patterns of households and to synchronise its base year with the 2018 base year of the gross domestic product and other indexes.
The rebasing to 2018 is the 12th base period and the 11th rebasing for CPI.
Of the CPI market basket, food and non-alcoholic beverages remained the one with the biggest weight followed by housing, water, electricity, gas and other fuels.
Restaurants and accommodation services now rank third, effectively giving transport the fourth biggest weight.
“The weights for the 2018-based CPI were derived from the expenditure data of the 2018 Family Income and Expenditure Survey. The weight for each group of commodities is the proportion of the expenditure to the total national expenditure,” PSA said.
Other components of the CPI basket include personal care and miscellaneous goods and services, information and communication, furnishings, household equipment and routine maintenance of the house, and clothing and footwear.
Also included are health, alcoholic beverages and tobacco, education services, recreation, sport and culture, and financial services.