The overall inflation rate in Davao Oriental slowed down further to 4.4 percent in July 2024 from 4.8 percent in June 2024. This brings the provincial average inflation from January to July 2024 to 5.1 percent. In July 2023, inflation rate was higher at 5.0 percent. (Tables A and B, and Figure 1)

The overall inflation downtrend in July 2024 was primarily influenced by a slower annual increase in food and non-alcoholic beverages, which dropped to 6.1 percent from 6.8 percent in June 2024. Additionally, the transport index's growth rate slowed to 3.6 percent in July 2024, down from 4.1 percent in the previous month, further contributing to the decline.

 Likewise, lower annual increments were noted in the indices of the following commodity groups during the month: 

a. Health, 2.6 percent from 2.9 percent;

b. Restaurants and accommodation services, -0.4 percent from 0.9 percent; and 

c. Personal care, and miscellaneous goods and services, 4.3 percent from 4.5 percent.

On the contrary, higher annual growth rates were noted in the indices of the following commodity groups during the month: 

a. Alcoholic beverages and tobacco, 1.7 percent from 1.4 percent; 

b. Housing, water, electricity, gas and other fuels; 1.8 percent from 0.9 percent; 

c. Furnishings, household equipment and routine household maintenance, 2.8 percent from 2.6 percent; and 

d. Recreation, sport and culture, 12.3 percent from 11.5 percent.

The indices of the rest of the commodity groups retained their respective previous month’s annual rates. (Tables C) 

Food inflation at the provincial level eased further to 6.4 percent in July 2024 from 7.1 percent in June 2024. Food inflation in July 2023 was also recorded at 6.4 percent. (Table D)

The deceleration of food inflation in July 2024 was primarily due to the slower year-on-year increase in the rice index, which dropped to 24.6 percent from 29.7 percent in the previous month. Additionally, fish and other seafood experienced a faster annual decline of -5.0 percent compared to -3.2 percent in June 2024. Fruits and nuts also contributed to the downtrend, with an inflation rate of -4.3 percent in July 2024, down from 1.2 percent in June 2024. 

Moreover, slower annual rates were noted in the indices of the following food groups during the month:

a. Meat and other parts of slaughtered land animals, -3.1 percent from -2.7 percent;

b. Milk, other dairy products and eggs, -6.3 percent from -5.9 percent; and 

c. Sugar, confectionery and desserts, -12.7 percent from -12.5 percent.

In contrast, higher annual growth rates were noted in the indices of the following food groups: 

a. Corn, 21.3 percent from 20.0 percent; 

b. Flour, Bread and other bakery products, pasta products, and other cereals, 2.5 percent form 2.0 percent; 

c. Oils and fats, 2.7 percent from 2.3 percent; 

d. Vegetables, tubers, plantains, cooking bananas and pulses, 22.9 percent from 14.3 percent; and 

e. Ready-made food and other food products N.E.C., 8.8 percent from 8.5 percent. (Table D)

Mixed trends in inflation were observed among the five provinces and one Highly Urbanized City (HUC) in the Davao Region during the month, compared to their respective June 2024 inflation rates. Davao City and Davao Oriental recorded the lowest inflation rates at 4.4 percent, while Davao Occidental reported the highest at 7.4 percent. (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 remained at 0.77 as of July 2024, indicating that the value of PhP1.00 in 2018 is equivalent to PhP0.77. In contrast, the PPP in July 2023 was higher at 0.80. (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: 

a. 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. 

b. 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. 

c. Weighting System - The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure. 

d. 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. 

e. 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