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An official core inflation measure for the Philippines

Philippine Review of Economics

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Title An official core inflation measure for the Philippines
 
Creator Guinigundo, Diwa C.; Bangko Sentral ng Pilipinas
 
Subject inflation; core inflation; Philippines
 
Description Many countries routinely publish a "core" or underlying inflation rate alongside the "headline" inflation rate. In February 2004, the National Statistics Office (NSO) began publishing an official rate of core inflation for the Philippines, defined as the rate of change of headline CPI after excluding selected food and energy items. This paper provides some background in the construction of the new measure and attempts a preliminary evaluation using a few simple statistical tests. The analysis suggests that, compared to alternative measures of core inflation (such as a trimmed mean and weighted median measure), the NSO core inflation measure is more stable but appears to be less correlated with future inflation. This implies that other core inflation measures may also provide useful additional information in the assessment of future price developments. Nevertheless, the NSO core inflation measure is an important step toward addressing the policy need to identify long-term or permanent movements in the path of inflation. The new series will also help build public understanding of both the inflation process in the Philippines and the medium-term orientation of macroeconomic policy. JEL classification: E31, E60
 
Publisher Philippine Review of Economics
 
Contributor —
 
Date 2005-06-30
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.econ.upd.edu.ph/pre/index.php/pre/article/view/189
 
Source Philippine Review of Economics; Vol 42, No 1 (2005)
1655-1516
 
Language eng
 
Relation http://www.econ.upd.edu.ph/pre/index.php/pre/article/view/189/600
 
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