- Corporate income tax schedule oriented towards labor employment;
- Tax rebates and holidays or other subsidies to industries that will base their operations in the desired areas; and
- Equity loans to investors, on a 50-50 basis and at a maximum interest rate of six percent per annum for the purchase of stocks preferably of private corporations which are located in the regional center or river basin.
Saturday, June 20, 2009
Human Settlements Dev 6- PRIVATE SECTOR PARTICIPATION
Monday, June 15, 2009
Human Settlements Development 5
Regional Human Settlements Development 4
Saturday, June 13, 2009
RP is ‘highly exposed’ to rising poverty - WB
By Cai U. Ordinario, BusinessMirror | 02/16/2009
The Philippines is among the “highly exposed” developing countries to increasing poverty levels and decelerating growth due to the global economic slowdown, according to a policy note recently released by the World Bank.
The bank said the global economic crisis is exposing households in almost all developing countries to increased risk of poverty and hardship. And, it added, almost 40 percent of developing countries are highly exposed to the effects of the crisis on poverty, with both declining growth rates and high poverty levels.
The Washington-based lender also said an additional 56 percent of countries are moderately exposed—meaning, will face either decelerating growth or high poverty levels, while only less than 10 percent face little risk.
The World Bank said the Philippines was classified a “highly exposed” country because its real per-capita economic growth is expected to be lower in 2008 and 2009 compared with the period of 2004 to 2007; and it is a place where 20 percent or more of households were below the $1.25 poverty line in 2005.
The bank said in highly exposed countries like the Philippines, poverty was already a large problem before the crisis, and an adverse impact on economic growth is expected. In the short term, the bank expects the nonpoor to be the most affected by the crisis. Experience from past economic and financial crises suggests that the adverse impacts are likely to spread in the medium-term to poor households.
“Poor household have fewer assets, more limited risk-coping mechanisms, and less access to capital markets to help them cope with economic fluctuations. Countries where there is a greater proportion of poor households have a larger share of the population that will be vulnerable to shocks in the medium term,” the bank said.
On a positive note, the bank also classified the Philippines as among those highly exposed countries that has “some fiscal space” to weather the crisis.
The bank said it will be critical to protect households in exposed countries through the help of the government. Governments, the bank said, must have the ability to cope with the fallout and finance programs that create jobs, ensure the delivery of core services and infrastructure, and provide safety nets.
As one of the countries with some fiscal space with medium capacity, the Philippines has more options to rapidly and effectively increase spending. The World Bank said the government should provide targeted support to exposed groups and regions, as well as support to protect core service delivery and infrastructure maintenance using development-policy operations in addition to investment financing.
“Combining both dimensions of vulnerability, the countries in most critical need of external financial and technical assistance are those with high initial poverty and growth decelerations, as well as low fiscal and institutional capacity,” said the Bank.
Earlier, World Bank president Robert Zoellick said developing countries should set aside .07 percent of their gross dometic product (GDP) in their stimulus package as a vulnerability fund.
Zoellick said the fund can be used for World Bank, United Nations and regional development bank safety-net programs that give the poor access to health, education and nutrition services; build infrastructure such as roads, bridges and low-carbon technology projects; and support small and medium-size businesses and microfinance institutions that lend to the poor.
An “unprecedented” fall in global production and a 5-percent decline in world GDP in the fourth quarter of 2008 point to an outright fall in world GDP in 2009, even if there is a modest rebound in the second half of the year, according to the World Bank.
World trade volumes are now contracting sharply and are expected to fall in 2009 for the first time in 27 years. Investment growth in the developing world is projected to fall from 13 percent in 2007 to 3.5 percent in 2009, due to tighter credit conditions and less appetite for risk.
RP middle class shrinking even before crisis
By Karen Flores, abs-cbnNEWS.com 06/13/2009
Many Filipino middle-class families were already lost to the low-income groups years before the global economic crisis started.
Data from the government's Family Income and Expenditure Survey (FIES) showed that middle-class families only accounted for 19.1 percent of all the families in the country in 2006--lower than 22.7 percent in 2000 and 23 percent in 1997.
"The Pinoy middle class remains vulnerable and has continued to shrink. And this is prior to the global crisis," National Statistical Coordination Board Secretary General Dr. Romulo Virola said in his column early this week, referring to the FIES, a survey conducted by the National Statistics Office once every three years.
Half of Filipino families belonged to the low-income, non-poor segment in 2006 (54 percent), while a quarter of households (26.9 percent) were considered as poor.
The elite segment, meanwhile, was only composed of 0.1 percent of the country's population.
The Philippines had fairly decent economic figures in 2006, led by a gross domestic product (GDP) of 5.4 percent, an average unemployment rate of 7.9 percent, $3.2 billion in average monthly export earnings, and $4.29 billion in average import earnings.
Still, even with these numbers, the country's middle-income group continued to collapse throughout the years.
This is expected to worsen in 2009 as the government conducts its next FIES, especially with the economy showing a dismal 0.4-percent GDP growth for the first three months.
Other key indicators such as remittances, exports, imports, and foreign direct investments (FDI) have also reflected how the global slowdown battered the economy this year.
For instance, exports, which account for 40 percent of the local economy and a major employer, have been plunging at a range of 30 to 40 percent for the past seven months. Imports have also posted double-digit declines for the past six months, while FDIs dropped more than 80 percent in the first quarter.
Middle class lifestyle
So who belongs to the Filipino middle class?
Citing data from the 2006 FIES, Virola said the Filipino middle class family has an annual income ranging from P246,109 to P2,000,072. He said, however, that this range has been raised throughout the years to match the country's worsening economic conditions.
"In 2009, you would need to earn close to half a million pesos to be in the middle class," he said.
According to Virola, there were 12 significant predictors of middle-income households in 2006. For one, the head of the family usually has a college degree, and works either as an official of government, a corporate executive, a manager, or a supervisor.
Some indicators of middle class families were similar to standards set in 2000 and 2003, which include the ownership of an oven, an air-conditioning unit, and a vehicle, as well as the presence of a non-relative member and an employed house helper, among many others.
A number of factors were also taken into consideration when classifying middle-class households, such as the high usage of mobile phones, the increased ownership of DVD players, and the reduced popularity of radio sets.
The top four spending priorities among the middle class and the general population are the same in 2003 and 2006, which include food, house rentals, transportation and communication, and utilities such as electricity, water, and fuel.
For the least priorities in expenditures, the middle class and the general population also shared four things in common, which include non-durable furnishings such as utensils and household linens, alcoholic beverages, house repair and maintenance, and recreation.
Friday, June 12, 2009
Regional Human Settlements Development 3
Regional Human Settlements Development 2
Thursday, June 11, 2009
1. Life isn't fair, but it's still good.
2. When in doubt, just take the next small step.
3. Life is too short to waste time hating anyone....
4. Your job won't take care of you when you are sick. Your friends and parents will. Stay in touch
5. Pay off your credit cards every month.
6. You don't have to win every argument. Agree to disagree.
7. Cry with someone. It's more healing than crying alone.
8. It's OK to get angry with God. He can take it.
9. Save for retirement starting with your first pay check.
10. When it comes to chocolate, resistance is futile.
11. Make peace with your past so it won't screw up the present.
12. It's OK to let your children see you cry.
13. Don't compare your life to others. You have no idea what their journey is all about.
14. If a relationship has to be a secret, you shouldn't be in it.
15. Everything can change in the blink of an eye. But don't worry; God never blinks.
16. Take a deep breath. It calms the mind.
17. Get rid of anything that isn't useful, beautiful or joyful.
18. Whatever doesn't kill you really does make you stronger.
19. It's never too late to have a happy childhood. But the second one is up to you and no one else.
20. When it comes to going after what you love in life, don't take no for an answer.
21. Burn the candles, use the nice sheets, wear the fancy lingerie. Don't save it for a special occasion. Today is special.
22. Over prepare, then go with the flow.
23. Be eccentric now. Don't wait for old age to wear purple.
24. The most important sex organ is the brain.
25. No one is in charge of your happiness but you.
26. Frame every so-called disaster with these words, 'In five years, will this matter?'
27. Always choose life.
28. Forgive everyone everything..
29. What other people think of you is none of your business.
30. Time heals almost everything. Give time time.
31. However good or bad a situation is, it will change.
32. Don't take yourself so seriously. No one else does.
33. Believe in miracles.
34. God loves you because of who God is, not because of anything you did or didn't do.
35. Don't audit life. Show up and make the most of it now.
36. Growing old beats the alternative -- dying young.
37. Your children get only one childhood.
38. All that truly matters in the end is that you loved.
39. Get outside every day. Miracles are waiting everywhere.
40. If we all threw our problems in a pile and saw everyone else's, we'd grab ours back.
41. Envy is a waste of time. You already have all you need.
42. The best is yet to come.
43. No matter how you feel, get up, dress up and show up.
44. Yield.
45. Life isn't tied with a bow, but it's still a gift.
Wednesday, June 10, 2009
Metro Manila Congested at 18,650 Persons Per Square Kilometer in 2007 - nso facts and figures
Based on the results of the 2007 Census of Population, the country’s population density is 260 persons per square kilometer or a 15.6 percent increase from 2000. Metro Manila, the country’s center of economic activity and the most densely populated region, has 26 times the density of people in CALABARZON and 41 times that of Central Luzon. With a land area of only 619.5 square kilometers and a population of 11,553,427, Metro Manila has a population density of 18,650 persons per square kilometer in 2007, an increase of 16.3 percent or 2,617 persons per square kilometer from 2000.
Item 1 Regional Human Settlements Development
Monday, June 8, 2009
RP to enter 'mild' recession by Q2- Joey Salceda
abs-cbnNEWS.com | 06/08/2009
Albay Gov. Joey Salceda on Monday said he expects the Philippines to enter into a mild recession as early as the second quarter this year, which can only be countervailed by pump-priming the economy through increased spending.
Salceda, an economic adviser to President Arroyo, said he expects the country to go into recession in the second quarter after gross domestic product reached a two-decade low of 0.4 percent in the first quarter. The GDP grew by 3.9 percent during the same period a year ago.
"We are experiencing significant downturn that will reach into the next quarter. My estimate is that, even including 60 percent increase in public construction, 1.4 percent in services, two percent in agriculture on the supply side, we will only reach 0.92 percent [GDP growth] in the second quarter," the governor told ANC television.
"Theoretically, in the Philippine definition of a recession, we will enter into a recession."
Salceda said the Philippines has technically entered into a recession when GDP drops below the population growth rate of 1.92 percent for two consecutive quarters.
The Albay governor said the government should seriously consider his proposal to approve a P100-billion stimulus package for scholarships, health care, mass housing, and tax rebates for the middle class to boost the economy.
He said one problem affecting the economic climate is that personal consumption and expenditures is at an all-time low of 0.8 percent in the first three months.
"That is the source of the weakness. PCE is very weak. The money is going to the middle class but they are not spending it, they are saving it. On the other hand, the poor always have basic needs so if you give them money, the economy will run. Anything for the poor at this point or stage of the economic cycle is good economic policy. But then you can target it so dole it out through conditional cash transfers," he said.
"I'll define it by extremes. Find a helicopter and drop the money in Tondo or Payatas where all the poor families are. I think that is the best way to do a stimulus."
He said his proposed stimulus plan includes increasing government allocations to conditional cash transfers to poor families from P10 billion to P35 billion from P10 billion and increasing tax rebates to middle class earners.
He also proposed that tax filers be given cash vouchers worth P7,000 in major department stores "so they will be forced to spend."
Condone agri loans
Salceda said the government should boost college scholarships and Technical Education and Skills Development Authority benefits from P3 billion to P15 billion. He noted that at least 52 percent of jobless Filipinos in the country are ages 15 to 24.
"Why would they be looking for jobs when they should be in school? So keeping them in school would be better, it will make more sense," he said.
He also said the government should condone P42 billion in unpaid agricultural loans and continue to give out land to landless farmers. He noted that from 1972-2007, only 18 percent of total agrarian liabilities have been paid.
"There are 4.2 million hectares of arable land that have been mortgaged to the Landbank. Those are just frozen assets. We need to liquefy it and inject real assets into the rural property market," he said.
Con-Ass to affect economy
He also warned that a House of Representatives initiative to change the Charter though constituent assembly would have a contractionary impact on the economy and spook local businessmen.
"Consumers aren't spending and now you want to affect the businessmen? Usually elections are a source of uncertainty and now you want to make the elections uncertain? It's a double whammy. I think we would be better off without those discussions. If we could just shelve it and archive it...because the economy is realy teetering on a recession, so we need to focus on it," he said.
He said, however, that one silver lining in the current Cha-cha talks is the five-year extension granted by Congress to the government's Comprehensive Agrarian Reform Program.
Salceda said the government could readily absorb 3.2 to 3.4 percent GDP deficit in the next three years without any repercussions. He said government should consider launching a "preemptive strike" on the recession before the economy sinks further.
"We need to jolt the economy before it plunges into recession. We are already on the brink. We need a preemptive strike on the recession," he said.
Saturday, June 6, 2009
New Economic Directions
- Regional Human Settlements Development
- Raising Farm Productivity and Income
- Land Reform
- Land Conservation
- Investment, Employment Generation and Income Distribution
- Education
- Reforestation
- Regional Development and Wealth, Population and Pollution Distribution
- Regulated Consumption
- Food Production and Nutrition
- Housing and Infrastructure Development
- Rice Problem
- Enclave-inclined Economy
- Loan-Oriented Strategy
- Wheels of Justice
- Third World and Self Reliance
- Foreign Debt
Performance of Philippine Agriculture 2- January to March 09
Performance Philippine Agriculture 1- Jan to March 2009
Role of Agriculture 3- Prof GeorgRaleighRiya
Philippine Employment demographics january 2009 - nso philippines website
EMPLOYED PERSONS Number (in thousands) 34,258 33,693 INDUSTRY SECTOR Total 100.0 100.0 Agriculture 34.6 35.0 Agriculture, hunting and forestry 30.5 30.9 Fishing 4.1 4.1 Industry 14.2 14.8 Mining and quarrying 0.4 0.4 Manufacturing 8.3 8.8 Electricity, gas and water 0.4 0.4 Construction 5.0 5.2 Services 51.2 50.2 Wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods 19.4 18.8 Hotels and restaurants 2.9 2.9 Transport, storage and communication 7.8 7.9 Financial Intermediation 1.0 1.1 Real estate, renting and business activities 3.0 2.7 Public administration and defense, compulsory social security 4.8 4.8 Education 3.4 3.2 Health and social work 1.3 1.2 Other community, social and personal service activities 2.5 2.5 Private households with employed persons 5.2 5.2 Extra-territorial organizations and bodies 0.0 0.0 OCCUPATION Total Officials of government and special interest organizations, 100.0 100.0 corporate executives, managers, managing proprietors and supervisors 13.2 11.9 Professionals 4.7 4.5 Technicians and associate professionals 2.7 2.6 Clerks 5.2 5.2 Service workers and shop and market sales workers 10.5 9.8 Farmers, forestry workers and fishermen 17.3 18.1 Trades and related workers 7.5 8.2 Plant and machine operators and assemblers 6.6 7.7 Laborers and unskilled workers 31.9 31.6 Special occupations 0.4 0.4 CLASS OF WORKER Total 100.0 100.0 Wage and Salary Workers 52.3 51.7 Private household 5.2 5.3 Private establishment 38.7 38.2 Government/government corporation 8.1 7.9 With pay (family owned business) 0.2 0.3 Own Account 35.4 36.1 Self employed 31.3 32.3 Employer 4.1 3.8 Unpaid Family Workers 12.3 12.2 HOURS WORKED Total 100.0 100.0 Working: Less than 40 hours 36.3 35.2 40 hours and over 62.0 63.5 Did not work 1.7 1.2 Mean hours worked 41.3 41.6
Philippines January 2009 unemployment rate- carmelita ericta, nso administrator
The number of employed persons in January 2009 was estimated at 34.3 million. This placed the employment rate at 92.3 percent, which is not significantly different from the estimate reported last year at 92.6 percent. The National Capital Region (NCR) posted the lowest employment rate at 86.0 percent. Aside from NCR, CALABARZON (89.1%), Central Luzon (90.3%), Ilocos Region (91.5%), and Central Visayas (92.2%) had employment rates lower than the national employment rate.
Out of the estimated 58.7 million population 15 years old and over in January 2009, about 37.1 million persons were reported to be in the labor force, placing the labor force participation rate at 63.3 percent. The labor force participation rate registered last year was 63.4 percent. Among the regions, MIMAROPA registered the highest labor force participation rate at 69.4 percent and the Autonomous Region in Muslim Mindanao (ARMM) posted the lowest at 55.9 percent.
Of the estimated 34.3 million employed persons in January 2009, more than one-half (51.2%) worked in the services sector, with those employed in wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods sub-sector comprising the largest sub-sector (19.4% of the total employed). Workers in the agriculture sector accounted for 34.6 percent of the total employed, with those engaged in the agriculture, hunting and forestry sub-sector making up the largest sub-sector (30.5% of the total employed). Only 14.2 percent of the total employed were in the industry sector, with the manufacturing sub-sector making up the largest percentage (8.3% of the total employed).
Among the various occupation groups, laborers and unskilled workers registered the largest group at 31.9 percent of the total employed persons in January 2009. Farmers, forestry workers and fishermen were the second largest group, accounting for 17.3 percent of the total employed.
Employed persons fall into any of these categories: wage and salary workers, own account workers and unpaid family workers. Wage and salary workers are those who work for private households, private establishments, government or government corporations and those who work with pay in own-family operated farm or business. More than half (52.3%) of the employed persons were wage and salary workers, more than one-third (35.4%) were own-account workers, and 12.3 percent were unpaid family workers. Among the wage and salary workers, those working for private establishments comprised the largest proportion (38.7% of the total employed). Government workers or those working for government corporations comprised only 8.1 percent of the total employed, while 5.2 percent were workers in private households. Meanwhile, among the own-account workers, the self-employed comprised the majority (31.3% of total employed).
Employed persons are classified as either full-time workers or part-time workers. Full-time workers are those who work for 40 hours or more while part-time workers work for less than 40 hours. In January 2009, six in every 10 employed persons were full-time workers, with those working for 40 to 48 hours having the highest proportion (39.3% of the total employed). Part-time workers comprised 36.3 percent of the total employed.
Employed persons who express the desire to have additional hours of work in their present job or to have additional job, or to have a new job with longer working hours are considered underemployed. The number of underemployed persons in January 2009 was estimated at 6.2 million or an underemployment rate of 18.2 percent. Around 3.8 million or 60.8 percent of the total underemployed persons were reported as visibly underemployed or working less than 40 hours during the reference week. Those working for 40 hours or more accounted for 36.1 percent. Most of the underemployed were working in the agriculture sector (47.0%) and services sector (37.9%). The underemployed in the industry sector accounted for 15.1 percent.
The unemployment rate in January 2009 was estimated at 7.7 percent compared to 7.4 percent posted in January last year. Among the regions, the highest unemployment rate was recorded in the NCR at 14.0 percent.
More males (64.1% of total unemployed) were unemployed than among females (35.9%). By age group, for every 10 unemployed persons, five (49.2%) were in the age group 15 - 24 years while three (30.3%) were in the age group 25 - 34.
Across educational groups, the unemployed were comprised mostly of high school graduates (32.7%), college undergraduates at about one-fifth (22.2%), while the college graduates, 18.3 percent.
The Role of Agriculture 2
The Role of Philippine Agriculture
Filipino nutrient inadequacy
Rice is commonly consumed in the Philippines; however the contribution of other foods to the diet is not well
defined. Our aim was to determine the nutrient intake and food group intake of Philippine nuns and compare
their intakes to the current estimated average requirements (EAR), and food-based recommendations, respec-
tively, and assess any differences in nutrient adequacy and energy intakes between body mass index (BMI) cate-
gories. Body weight was assessed at baseline and at nine months; three-day weighed food intakes were recorded
once every fortnight (n=187). At baseline, the mean (SD) age and BMI of the women was: 25.0 (4.6) years and
21.8 (17.3) kg/m2, respectively. Over the nine months, women with an underweight (n=46; <18.5>
ceptable BMI (n=132; 18.5-25 kg/m2) lost 5.0 kg (p=0.005) and 1.5 kg (p=0.047), respectively, whereas over-
weight women maintained their weight. Irrespective of BMI, 98% of women consumed less than the adequate
intake for calcium, and no one met the folate EAR. The intake of all food groups (e.g., rice, vegetables, fruit,
meat, dairy) was lower than food-based recommendations. It is evident that the nutrient density of the Philippine
diet is poor. In order to meet nutrient requirements, it is recommended that all women increase intake of fruits,
vegetables, fish, meat and dairy products, to reduce risk of micro-nutrient deficiencies. - abstract from
Nutrient adequacy and food group consumption of Filipino novices and religious sisters
by Jessica A Grieger PhD1, Jere D Haas PhD2, Laura E Murray-Kolb PhD3, Penny Kris-Etherton PhD, RD1, John L Beard PhD1
Rice, Trade and Biotechnology in the Philippines (excerpted) by Steve Suppan
As in most South East Asian countries, rice is the basic staple food of the Philippines, where it is grown on about a third of all farmland by an estimated one million rural households. However, growing rice by no means assures one of having enough to eat. According to a 1986 report, farm children in Central Luzon, the Philippine rice bowl, had among the highest rates of malnutrition in the country. During the 1980s about 70% of all Filipinos were 40-60% deficient in protein intake and 40-80% deficient in caloric intake.2 In 1995, the Philippine National Statistics Board estimated that one out of five of all Filipinos could not afford to feed themselves. That year two out of five Philippine families fell below the official poverty line of 7,212 pesos (about U.S.$277) annual income.
Despite this perilous state of food insecurity, the government was ill-prepared for the crisis that erupted in August 1995, when the price of rice doubled throughout the country. The rice price jump consumed at least a fifth of the official minimum daily wage. To avoid food riots, the government's mobile rice caravans distributed the meager rice stocks of the National Food Administration (NFA) in Manila's poor neighborhoods
Daily eating guide for Filipinos - Dost.gov.ph
In these times where consumers are bombarded with exotic, fancy and mouth-watering food concoctions, it remains a
challenge to attain or even maintain good health by building adequate meals through a variety of foods. Good health
starts with eating properly.
Certain foods are for liberal consumption and others are for moderate consumption. Attaining
ideal health means sparingly enjoying other foods. The Food and Nutrition Research Institute (FNRI) has developed a
food pyramid (see figure below), a simple and easy-to-follow daily eating guide for Filipinos. The food guide pyramid is a
graphic translation of the current "Your Guide to Good Nutrition" based on the usual dietary pattern of Filipinos in
general. The usual Filipino diet consists mainly of rice. It contributes the major part of the carbohydrates in the diet
together with bread, corn and rootcrops such as sweet potato, cassava and "gabi". Therefore, carbohydrate foods are at
the base of the pyramid and are for liberal consumption to meet 55 to 70% of energy needs. A viand or "ulam" is a
combination of vegetables and fish or other animal protein sources, capped by fruits. Vegetables and fruits constitute the
second level of the pyramid.
Leafy greens and vitamin C rich fruits are the best sources of vitamins and minerals, plus
dietary fiber or roughage. You are advised to eat more of these foods.The third level consists of animal protein foods like
fish, meat, poultry, seafoods, milk and dairy products, as well as dried beans and nuts. These foods are recommended
for moderate consumption as they supply high quality protein, vitamins and minerals. Finally, at the tip of the pyramid are
the fats and oils that are to be taken just enough. In general, however, the Filipino diet is lacking in fat. On the average,
Filipinos are only taking 15% of the calories from fat, which is one of the reasons why the total caloric intake is very low.
You can improve caloric intake by consuming enough visible fats such as margarine and butter, as well as invisible fats
contained in animal foods and some fruits and nuts.
Food Balance Sheet
Monetary Policy - Glossary and Abbreviations
Base Money (BM) – the sum of the reserve money (RM), reserve-eligible government securities, liquidity reserves and reserve deficiency of banks. 1
Consumer Price Index (CPI) – represents the average price for a given period of a standard basket of goods and services consumed by a typical Filipino family. This standard basket contains hundreds of consumption items (such as food products, clothing, water and electricity) whose price movements are monitored to determine the overall change in the CPI, or the level of inflation (See also Inflation Rate).
Demand-Pull Factors of Inflation – pressures on inflation caused by relatively higher demand compared to the available supply of goods and services. Usually, when people, business or the government receive more income, realize capital gains or obtain easier access to credits, the overall demand for goods and services may increase. This would lead to increased prices, assuming the supply of goods and services is not able to adjust quickly enough to meet the higher demand. In addition, supply shocks in the economy that, either increase the costs of raw materials or curtail supply or both could result in second-round effects that, in turn, may lead to higher demand-side price pressures. Higher oil and agricultural commodity prices, for instance, may eventually affect the price- and wage-setting behavior of economic agents, which could then lead to second-round price pressures from the demand side.
Explanation Clauses - the predefined set of acceptable circumstances under which an inflation targeting central bank may fail to achieve its inflation target. Such circumstances recognize the fact that there are limits to the effectiveness of monetary policy and that deviations from the inflation target may sometimes occur because of factors beyond the control of the central bank. Under the inflation targeting framework of the BSP, these circumstances include price pressures arising from: (a) volatility in the prices of agricultural products; (b) natural calamities or events that affect a major part of the economy; (c) volatility in the prices of oil products; (d) significant government policy changes that directly affect prices such as changes in the tax structure, incentives and subsidies.
Inflation Rate - the rate of change in the weighted average prices of goods and services typically purchased by consumers. The weights of the goods and services are based on their corresponding share to the Consumer Price Index (CPI) basket, i.e., the standard basket of goods and services purchased by a typical household. In the Philippines, the composition of the CPI basket is determined from the Family Income and Expenditure Survey (FIES) periodically conducted by the National Statistics Office (NSO). Inflation is typically defined as the annual percentage change in the CPI. It indicates how fast or slow the CPI increases or decreases.
Headline Inflation – the rate of change in the weighted average prices of all goods and services in the CPI basket.
Core Inflation – An alternative measure of inflation that eliminates transitory effects on the CPI, core inflation removes certain components of the CPI basket that are subject to volatile price movements, such as food and energy, and other items affected by supply side factors, the price changes from which are not within the control of monetary policy.
Official Definition - This refers to the rate of change in the CPI which excludes the following items/ commodity groups: rice, corn, fruits and vegetables, and fuel items (gas, liquefied petroleum gas (LPG), kerosene, gasoline and diesel), which together represent 18.4 percent of the CPI basket. Core inflation data for 2001-2002 are BSP estimates while the data starting January 2003 are the official National Statistics Office (NSO) figures.
BSP’s Alternative Measures of Core Inflation:
- Net of Selected Volatile Items - This measure refers to the rate of change in the CPI which excludes the following items/ commodity groups: educational services, fruits and vegetables, personal services, rentals, recreational services, rice, and corn which together represent 37.6 percent of the CPI basket.
- Trimmed Mean - represents the average inflation of the (weighted) middle 70 percent in a lowest-to-highest ranking of year-on-year inflation rates for all CPI components.
- Weighted Median - represents the middle inflation (corresponding to a cumulative CPI weight of 50 percent) in a lowest-to-highest ranking of year-on-year inflation rates.
- Net of Selected Volatile Items - This measure refers to the rate of change in the CPI which excludes the following items/ commodity groups: educational services, fruits and vegetables, personal services, rentals, recreational services, rice, and corn which together represent 37.6 percent of the CPI basket.