1. Headline Inflation

La Union’s headline inflation accelerated further to 4.2 percent in June 2024.  This was the highest recorded inflation in the province since October 2023. This brings the provincial average inflation from January to June 2024 at 3.6 percent.  In June 2023, inflation rate was posted at 3.0 percent.  (Table A and Figure1)

1.1 Main Drivers to the Acceleration of the Headline Inflation

The uptrend in the inflation of the province in June 2024 was primarily influenced by the faster annual increment in the housing, water, electricity, gas and other fuels index at 2.8 percent during the month from 2.1 percent in May 2024.

This was followed by food and non-alcoholic beverages with an annual increase of 8.6 percent in June 2024 from 8.3 percent in May 2024.   Information and communication ranked third main contributor to the acceleration of the headline inflation of the province as it recorded a year-on-year increase of 0.3 percent in June 2024 from zero percent inflation in the previous month.

In addition, recreation, sport and culture also recorded an annual increase of 1.0 percent in June 2024 from 0.6 percent in May 2024.

On the contrary, slower annual growths were recorded in the indices of the following commodity groups during the month compared with their respective rates in the previous month:

1. Furnishings, household equipment and routine household maintenance, 0.8 percent from 0.9 percent;

2. Health, 0.8 percent from 0.9 percent; and

3. Transport, 2.8 percent from 2.9 percent.

Meanwhile, the annual inflation of following commodity groups remained at their respective previous month’s rates:

1. Alcoholic beverages and tobacco, at 2.0 percent;

2. Clothing and footwear, at 1.3 percent;

3. Education services, at 0.8 percent; and

4. Personal care and miscellaneous goods and services, at 0.5 percent.

Furthermore, financial services retained an annual decline of 0.1 percent in June 2024.  The annual inflation of restaurants and accommodation services also remained at zero percent during the month.

1.2 Main Contributors to the Headline Inflation

The top three commodity groups contributing to the June 2024 overall inflation of the province were the following:

1. Food and non-alcoholic beverages with 77.1 percent share or 3.2 percentage points;

2. Housing, water, electricity, gas and other fuels with 12.3 percent share or 0.5 percentage point; and

3. Transport with 5.9 percent share or 0.3 percentage point.

    

2. Food Inflation

Food inflation at the provincial level also accelerated to 9.2 percent in June 2024 from 8.9 percent in May 2024. This was the highest recorded food inflation in the province since December 2023. In June 2023, food inflation was recorded at 5.9 percent.

2.1 Main Drivers to the Uptrend of Food Inflation

The faster acceleration of food inflation in the province in June 2024 was primarily contributed by the faster annual increase in the fruits and nuts index at 23.9 percent during the month from 14.0 percent in May 2024. This was followed by fish and other seafood with an annual growth of 2.1 percent during the month from an annual decline of 0.4 percent in May 2024.  The third contributor to the uptrend of food inflation in the province in June 2024 was recorded in the index of meat and other parts of slaughtered land animals with a faster year-on-year mark-up of 4.3 percent during the month from 3.6 percent in May 2024.

Moreover, the index of ready-made food and other food products not elsewhere classified also recorded a faster annual increase of 1.6 percent in June 2024 from 0.9 percent in the previous month.

In contrast, slower annual growth rates were observed in the indices of the following food groups during the month compared with their respective rates in the previous month:

1. Rice, 33.5 percent from 33.8 percent;

2. Flour, bread and other bakery products, pasta products,  and other cereals, 2.1 percent from 2.5 percent; and

3. Vegetables, tubers, plantains, cooking bananas and pulses, 0.5 percent from 5.1 percent.

A faster annual decline of 2.3 percent in June 2024 from an annual drop of 2.0 percent in May 2024 was observed in the index of milk, other dairy products and eggs.     Similarly, a faster annual decrease of 4.7 percent during the month from an annual decline of 4.5 percent in the previous month was recorded in the index of sugar, confectionery, and desserts.

Meanwhile, the annual increase of 17.9 percent in the index of corn and the annual decrease of 1.8 percent in the index of oils and fats remained in June 2024.

2.1 Main Contributors to the Food Inflation

Food inflation contributed 76.1 percent or 3.2 percentage points to the overall inflation in June 2024. The top three food groups in terms of contribution to the food inflation during the month were the following:

1. Cereal and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals with 81.5 percent share or 7.5 percentage points;

2. Fruits and nuts, with 9.6 percent share or 0.9 percentage point; and

3. Meat and other parts of slaughtered land animals with 8.6 percent share or 0.8 percentage point.

SGD. DANITES E. TEÑIDO, PhD
Chief Statistical Specialist

/MMAAA