Historic CPI gauges separate prices on Saipan, Tinian, Rota

For the first time in CNMI history, Saipan, Tinian, and Rota were separately surveyed for basic consumer goods’ prices that can be used to justify, among other things, the need for increased food stamp assistance for residents of Rota and Tinian where rice, eggs, chicken, and other goods are higher than those on the main island of Saipan.

Results of those surveys are now part of the newly released Department of Commerce’s Consumer Price Index report for the fourth quarter of 2010, a copy of which was obtained by Saipan Tribune.

A 50-lb rice on Rota, for example, costs some $35 as of end-2010, but the same item cost about $27 on Saipan and Tinian.

With the exception of beer, Rota’s consumer goods are priced higher than those on Saipan and Tinian.

The report is the result of separate surveys done on Saipan, Tinian, and Rota starting in the first quarter of 2010.

For years, surveys of basic consumer goods were only done on Saipan. They did not consider the higher prices on Rota and Tinian.

The report says “there is no great deal of difference noticed between Saipan and Tinian” prices “although Saipan does tend to be slightly lower on most occasions for the items selected.”

“On the other hand, it is noticeable that Rota is more expensive for a majority of items analyzed, with the exception of beer,” it says.

Based on a 2010 survey, a can of beer was averaging $1.27, less expensive than a can of beer on Tinian for over $1.31 or on Saipan at almost $1.30.

Commerce collected price data from roughly 170 retail outlets on Saipan, 30 on Tinian, and 60 on Rota.

Senate President Paul Manglona (Ind-Rota) said the release of the CPI report is “welcome news,” and he looks forward to seeing the actual report.

Rota Legislative Delegation chair Sen. Juan Ayuyu (Ind-Rota) had said that Rota residents need more food stamp assistance but couldn’t ask for more funds from the Department of Community and Cultural Affairs until a recalculated CPI is done.

Now that the latest Commerce report showing separate price surveys for the three islands is out, the Rota delegation looks forward to improved food stamp assistance for residents not only of Rota but also of Tinian.

Acting Commerce secretary Sixto Igisomar, in a phone interview yesterday, said the newly-released report is more narrative than the previously issued reports.

“I’m happy that it’s released and I am pushing for the release also of the first and second quarter 2011 reports,” he said.

Igisomar thanked Commerce’s Central Statistics Division personnel on Saipan, Tinian, and Rota “for getting this survey and report off the ground” and asked them to continue their support for the project.

“This report will be very helpful especially for food stamps assistance. It shows the public the price changes on the three islands, and the disparity of the prices between these islands. It’s more than a CPI, because a CPI can only tell you variances. This report tells you the actual prices. I have confidence in the report that it will help more people,” he said.

Commerce did a comparison of prices for selected items across the three main islands of the CNMI for the fourth quarter of 2010.

“The items were chosen based on their significance to household expenditure, as well as the feasibility to compare the items suitably across the three islands,” Commerce says.

There were nine specific items surveyed on Saipan, Tinian and Rota: a 50-lb bag of rice, a can of corned beer, a pound of chicken, a dozen eggs, a pound of onions, a can of Coke, a can of beer, a gallon of gasoline, and a pack of Doral cigarettes.

An 11.5-oz corned beef, for example, costs almost $4 on Rota, but was only over $2.50 on Saipan and Tinian in the fourth quarter of 2010.

A dozen eggs on Rota was over $3.50, but was only over $2 on Saipan and Tinian.

Saipan’s inflation rate increased by 4.2 percent in the fourth quarter of 2010 compared to 3.4 percent in the same quarter in 2009 and compared to 0.4 percent in the previous quarter.

Of the nine consumer item groups, “medical care” increased the most with 19.9 percent growth when compared to the last quarter.

Commerce said the main reason for this increase was a 23-percent rise in health insurance.

This was followed by “transportation” with a 6.5-percent growth.

Commerce said the major contributing factor was the 15-percent increase in the price of gasoline.

All other consumer item groups—food, alcoholic beverages, housing and utilities, apparel, and other goods and services—increased slightly.

“Recreation and “education and communication” had slight decreases.

As for annual inflation, the index rose by 6.4 percent in 2010—the highest annual rise for the same corresponding 12 months since 2006 when a 13.4-percent increase was observed.

“Medical care”—among nine consumer item groups—increased the most with 19.8 percent.
[B] Tinian, Rota[/B]

Commerce’s report shows the quarterly inflation rate on Tinian for each of the quarter since the quarter of 2010.

Tinian’s index rose by 1.9 percent for the fourth quarter of 2010, and the largest was also “medical care” with an increase of 19.4 percent. This, again, was a result of a 23-percent increase in the cost of health insurance.

Since the series for Tinian and Rota only commenced in the first quarter of 2010, there will be no annual inflation figures until data from the first quarter of 2011 is analyzed.

Rota’s index increased by 0.8 percent for the fourth quarter of 2010, the highest being “medical care” which rose by 17.3 percent. This was a result of a 23-percent increase in the cost of health insurance.
[B] Saipan consumer price index[/B]

Saipan consumers’ buying power weakened because of increases in the cost of basic consumer goods and services, especially “transportation” and “medical care” costs among nine major groups of consumer items measured.

A CPI measures price changes in a sample of goods and services normally purchased by households in the CNMI.

Any increase in the CPI means a spike in the cost of most things CNMI residents spend their money on, including food, clothing, housing and utilities, fuel, and medical care.

The new CPI report also reflects a rebasing of the CPI from the first quarter of 2003 (at 100 index points) to the fourth quarter of 2008, to help maintain the integrity of the CPI index and provide the CNMI with a more reliable measure of the changes in the cost of living.

Prices of most basic commodities on Saipan went up in the fourth quarter of 2010 compared to the same period in 2009, based on the latest CPI report.

The fourth quarter 2010 CPI reached 111.7 percentage points, compared to fourth quarter 2009’s 105 percentage points. The CPI was rebased to 100.0 in the fourth quarter of 2008.

The higher CPI percentage points in the fourth quarter of 2010 means that the value of one’s dollar bought lesser amounts of fuel for cars, bought fewer food products, or paid lesser power bills compared to the same quarter in 2009.

Of the nine commodities groups, the “medical care” index posted the highest percentage-point increase of 18.9—from 99.1 in 2009 to 120 index points in 2010.

“Transportation” index increased by 18.9 percentage points or from 180.5 to 127.4, and this may be a result of fuel price increases.

“Alcoholic beverages” index went up from 100 to 105.1.

“Housing and utilities” index also went up to 107.2, from 106.1.

“Food” index slightly increased from 104 to 104.2 percentage points.

“Other goods and services” index also went up from 102.8 to 105.7.

“Apparel” index, meanwhile, went down to 101.3 from 102.6, and so did “recreation” index from 103 to 99.7, and “education and communication” index from 105.3 to 103.9.