The inflation in Davao Oriental slowed down to 10.2 percent in April 2023, from 12.4 percent in March 2023. In April 2022, inflation was lower at 6.2 percent. The average inflation rate for the first four months of the year stood at 11.0 percent. (Tables A and B, and Figure 1)

The slowdown in inflation at the provincial level in April 2023 was primarily due to the lower annual increment recorded in the index for food and non-alcoholic beverages at 12.6 percent, from 15.5 percent in the previous month. This was followed by housing, water, electricity, gas and other fuels with an inflation rate of 8.7 percent from 12.7 percent in March 2023. The index for transport also exhibited lower annual growth at -0.3 percent inflation rate from 1.9 percent in March 2023.

Other commodity groups that contributed to the downtrend in the April 2023 inflation were clothing and footwear, furnishings, household equipment and routine household maintenance and health, which registered lower inflation rates during the month at 4.7 percent, 5.6 percent and 6.4 percent, respectively, compared with their previous month’s inflation rates.

In contrast, higher inflation rates were observed in the following commodity groups:

a. Alcoholic beverages and tobacco, 17.2 percent;  

b. Recreation, sports and culture, 10.8 percent; 

c. Restaurants and accommodation services, 16.1 percent; and

d. Personal care, and miscellaneous goods and services, 10.1 percent.

The other commodity groups, i.e., information and communication, education, and financial services retained their previous month’s annual growth rates. (Tables C)

Food inflation slowed down to 12.8 percent in April 2023, from 16.1 percent in March 2023. In April 2022, food inflation was lower at 5.3 percent. (Table D)

The deceleration in the food inflation was mainly brought about by the lower year-on-year growth in the index of fish and other seafood at 19.0 percent in April 2023, from 27.1 percent in March 2023. In addition, the rice index increased at a lower rate of 5.4 percent during the month, from 8.5 percent in March 2023. Moreover, slower year-on-year growth rates were observed in the indices of the following food groups during the month:

a.   Corn, 8.5 percent;

b.   Vegetables, tubers, plantains, cooking bananas and pulses,20.3 percent;

c. Milk, other dairy products and eggs, 10.6 percent;

d. Ready-made food and other food products n.e.c., 9.5 percent; 

e. Sugar, confectionery and desserts, 33.0 percent; and

f. Flour, bread and other bakery products, pasta products, and other cereals, 10.2 percent.

On the contrary, higher annual increases were observed in the indices of meat and other parts of slaughtered land animals at 11.5 percent; oils and fats at 17.8 percent; and fruits and nuts at 14.1 percent. (Table D)

Relative to their annual rates in the previous month, all the provinces in Davao Region had lower inflation in April 2023. The province of Davao del Norte still registered the lowest inflation rate at 4.2 percent, while Davao Oriental remained as the province with the highest inflation rate of 10.2 percent during the month. (Table E)

Purchasing Power of the Peso (PPP)

The purchasing power of the peso (PPP) shows how much the peso in the base year (2018) is worth in another period. It is computed by getting the reciprocal of the CPI and multiplying the result by 100.

The PPP in Davao Oriental decreased to 0.79. This means that the amount of PhP100.00 in 2018 is equivalent to PhP79.00 in April 2023. In April 2022, the PPP was higher at 0.87. (Figure 2)

TECHNICAL NOTES

Uses of CPI

The CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is a major statistical series used for economic analysis and as a monitoring indicator of government economic policy.

Computation of CPI

The computation of the CPI involves consideration of the following important points:

1. Base Year/Period - A period, usually a year, at which the index number is set to 100. It is the reference point of the index number series.
2. Market Basket - A sample of the thousands of varieties of goods purchased for consumption and services availed by the households in the country selected to represent the composite price behavior of all goods and services purchased by consumers.
3. Weighting System - The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure.
4. Formula - The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2006) weights.
5. Geographic Coverage - CPI values are computed at the national, regional, and provincial levels, and for selected cities.

Note: CPIs and inflation rates by province and selected city are posted at the PSA website (https://openstat.psa.gov.ph/).

Approved for release:

EMILY P. TOMOGDAN

(Supervising Statistical Specialist)

Officer-in-Charge