When the absolute pressure dips below the vapour pressure, cavitation occurs. Why would dynamic pressure be taken into account in this case?
According to Pump & Systems,
Note that suction pressure is stagnation pressure (total pressure); it includes velocity head. Adding velocity head puts all pumps on the same basis, otherwise a pump would require different amounts of NPSH when tested with different sizes of suction lines (assuming that suction pressure is measured in the suction line, which is normally the case).