The inflation rate in Davao Oriental rose to 6.0 percent in May 2024 from 4.2 percent in April 2024. This brings the average inflation rate from January to May 2024 to 5.3 percent. In May 2023, the inflation rate was higher at 7.5 percent. (Tables A and B, and Figure 1)

The uptrend in overall inflation in May 2024 was predominantly influenced by a notable increase in the year-on-year index of food and non-alcoholic beverages, rising to 9.3 percent from 5.3 percent in the preceding month. 

In contrast, the following commodity groups registered lower inflation rates during the month: 

a. Alcoholic beverages and tobacco, 1.9 percent from 2.3 percent; 

b. Clothing and footwear, 3.9 percent from 4.5 percent; 

c. Housing, water, electricity, gas, and other fuels, -1.0 percent from -0.6 percent;   

d. Furnishings, household equipment and routine household maintenance, 2.6 percent from 3.6 percent; 

e. Health, 3.0 percent from 3.4 percent; 

f. Recreation, sport and culture, 11.8 percent from 13.4 percent; and 

g. Personal care, and miscellaneous goods and services, 4.7 percent from 5.4 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 accelerated to 10.0 percent in May 2024 from 5.5 percent in the previous month. In May 2023, food inflation was lower at 8.4 percent. (Table D) 

The acceleration of food inflation was mainly due to the higher annual increase in the prices of fish and other seafood, rising to 10.5 percent during the month from -2.5 percent in the previous month. Additionally, corn recorded an inflation rate of 16.9 percent in May 2024, up from 6.1 percent in April 2024. 

Higher year-on-year growth rates were also noted in the indices of the following food groups during the month: 

   a. Vegetables, tubers, plantains, cooking bananas and pulses, 9.6 percent from 2.3 percent; 

   b. Meat and other parts of slaughtered land animals, -4.7 percent from -6.9 percent; 

   c. Ready-made food and other food products n.e.c., 5.5 percent   from 4.8 percent;   

   d. Rice, 30.8 percent from 30.2 percent; and 

   e. Oils and fats, 0.5 percent from 0.3 percent.  

 In contrast, lower annual increments were noted in the indices of the following food groups: 

a. Flour, bread and other bakery products, pasta products, and other cereals, 2.3 percent from 2.4 percent;

b. Milk, other dairy products and eggs, 0.4 percent from 4.6 percent; 

c. Fruits and nuts, 3.4 percent from 7.0 percent; and 

d. Sugar, confectionery and desserts, -8.8 percent from  -6.3 percent. (Table D)

Mixed trends of inflation were observed across the five (5) provinces and one (1) Highly Urbanized City (HUC) in the Davao Region compared to their respective April 2024 inflation rates. Davao De Oro recorded the lowest inflation rate at 4.5 percent, while Davao Occidental reported the highest inflation rate at 8.3 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 held steady at 0.76, implying that the worth of PhP100.00 in 2018 equals PhP76.00 in May 2024. By comparison, in May 2023, the PPP stood higher at 0.81. (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