PURCHASING

POWER
Purchasing power is the value of a
currency expressed in terms of the
amount of goods or services that
one unit of money can buy.
One official measure of purchasing
power is the Consumer Price Index,
which shows how the prices of 
consumer goods and services
change over time.
x 100
 ITEM 2000 2009 2010
Rice ₱ 20.00 ₱ 32.00 ₱ 43.00
Milk ₱ 32.00 ₱ 54.00 ₱ 62.00
Cooking Oil ₱ 25.00 ₱ 41.00 ₱ 65.00
Bread ₱ 28.00 ₱ 47.00 ₱ 53.00
Meat ₱ 140.00 ₱ 195.00 ₱ 220.00
Beverages ₱ 80.00 ₱ 165.00 ₱ 198.00
Tobacco ₱ 30.00 ₱ 65.00 ₱ 72.00
Egg ₱ 105.00 ₱ 155.00 ₱ 165.00
Other Products ₱ 320.00 ₱ 610.00 ₱ 725.00
TOTAL ₱ 780.00 1364   1603
CPI 100  174.87 205.51 
Inflation VS Deflation
 Inflation occurs when the
price of goods and services
rise, while deflation occurs
when those prices
decrease.
-1 x 100

or

x 100
To compute for PPP:

PPP

or

PPP x 100
PURCHASING POWER OF PESO

A measure of the real value of peso in a

given period relative to chosen reference
period.