1.    Provincial Headline Inflation

The provincial headline inflation decelerated to 0.9 percent in August 2024, a 2.4 percentage point decline from 3.3 percent in July 2024. This marks the initial decrease following five consecutive increases. The recorded rate is 2.4 percentage points lower than the national inflation rate of 3.3 percent in August 2024. (Tables A, B & C, and Figure I)

1.1    Main Drivers to the Downward Trend of the Headline Inflation

This downward trend was primarily driven by a decrease in the year-on-year rate of heavily weighted food and non-alcoholic beverages from 8.7 percent in July 2024 to 3.1 percent in August 2024. The deceleration in the price increase of cereals and cereal products (ND), particularly rice, contributed the largest decrease to the commodity group as its inflation rate decelerated from 23.1 percent in July 2024 to 11.2 percent in August 2024. The decrease in the price of goods and services related to transport also played a significant factor in the downtrend as its inflation rate decreased from 4.6 percent in July 2024 to negative 1.1 percent in August 2024.

In addition, a lower year-on-year rate was also recorded for health from 1.7 percent in July 2024 to 1.6 percent in August 2024; alcoholic beverages and tobacco from 2.4 percent to 2.3 percent; and furnishings, household equipment and routine household maintenance from 1.9 percent to 1.8 percent.

Consequently, indices for the following commodity groups moved at their previous month’s annual rates:
a.    Personal care, and miscellaneous goods and services (1.4 percent);
b.    Clothing and footwear (1.3 percent); and
c.    Information and communication (0 percent).

On the contrary, higher price indices were observed on the price indices of the following commodity groups:
a.    Education services, from 5.9 percent to 8.4 percent;
b.    Recreation, sport, and culture, from 0.8 percent to 4.5 percent;
c.    Restaurants and accommodation services, from 3.3 percent to 3.9 percent; and
d.    Housing, water, electricity, gas, and other fuels, from negative 6.4 percent to negative 5.4 percent.

Financial services continued to record a zero percent annual rate. (Table B)

1.2    Main Contributors to the Provincial Headline Inflation

The top three commodity groups contributing to the August 2024 provincial headline inflation were the following:
a.    Food and non-alcoholic beverages with 138.0 percent share or 1.24 percentage points;
b.    Restaurants and accommodation services with 52.4 percent share or 0.47 percentage points; and
c.    Recreation, sport, and culture with 9.0 percent share or 0.08 percentage points.

2.    Food Inflation

At the provincial level, food inflation decelerated to 3.2 percent in August 2024 from 9.1 percent in July 2024. This is 1.0 percentage points lower than the national food inflation rate of 4.2 percent. In August 2023, the provincial food inflation rate was higher at 10.8 percent.

2.1    Main Drivers to the Downward Trend of Food Inflation

The acceleration in provincial food inflation in August 2024 was primarily driven by the decline in the year-on-year price of cereals and cereal products (ND) to 11.2 percent from 23.1 percent in July 2024, particularly for the price of rice as its inflation rate decreased from 31.5 percent to 14.4 percent.

In addition, lower price indices were also observed in the following food groups:
a.    Vegetables, tubers, plantains, cooking bananas and pulses (ND), from 28.2 percent to 0.5 percent; 
b.    Fish and other seafood (ND), from 8.6 percent to 2.6 percent;
c.    Fruits and nuts, from 11.7 percent to 6.5 percent;
d.    Sugar, confectionery, and desserts (ND), from 1.0 percent to 0.9 percent; and
e.    Oils and fats, from 1.9 percent and 1.8 percent.

On the other hand, an increase in the indices of the following food groups was observed during the month:
a.    Meat and other parts of slaughtered land animals (ND), from negative 4.7 percent to negative 4.5 percent;
b.    Milk, other dairy products and eggs (ND), from negative 1.0 percent to 7.0 percent; and
c.    Ready-made food and other food products n.e.c. (ND), from 4.0 percent to 4.1 percent.

2.2    Main Contributors to Food Inflation

Food inflation recorded a 138.0 percent share of provincial inflation in August 2024. The food groups with the highest contribution to the food inflation during the month were the following:
a.    Cereals and cereal products, with 93.1 percent or 2.98 percentage points;
b.    Milk, other dairy products and eggs (ND), with 12.9 percent or 0.41 percentage points; and
c.    Fish and other seafood, with 10.2 percent or 0.33 percentage points.

Sgd. MARILYN P. VERGARA
Chief Statistical Specialist
Ilocos Norte Provincial Statistical Office

/RPS