CITY OF DAVAO

In February 2023, the inflation rate in Davao City was once again at its highest since January 2019, currently at 10.9 percent, surpassing the highest rate in 2022 at 10.4 percent (October 2022). The rate in February 2023 was 1.3 percent higher than the recorded rate in January 2022 at only about 9.6 percent and 6.3 percent higher than the rate of the same month in 2022 at 4.6 percent.  (Table A and Figure 1).

The higher inflation rate recorded in February 2023 was mainly brought about by the increase in the index of the commodity groups; (1) Housing, Water, Electricity, Gas, and Other Fuels at 11.0 percent with 50.0 percent share to the inflation trend, (2) Food and Non-Alcoholic Beverages at 10.7 percent with 24.3 percent share and (3) Restaurants and Accommodation Services at 13.0 percent with 22.2 percent share. Increase in rate was also observed in the following commodity groups:

1. Alcoholic Beverages and Tobacco, 18.8 percent;
2. Health, 7.0 percent;
3. Information and Communication, 1.3 percent.

While a rise in the city’s inflation rate has been observed for February 2023, some of the commodities were noted to have lower rates. Specifically, Furnishings, Household Equipment and Routine Household Maintenance at 10.5 percent; Transport at 12.3 percent; Recreation, Sport and Culture at 6.1 percent and Personal Care and Miscellaneous Goods and Services at 11.2 percent. 

The inflation rate of the rest of the commodity groups, on the other hand, remained equal. Specifically, Clothing and Footwear at 9.1 percent; Education Services at 9.8 percent and Financial Services at 0.0 percent.

Meanwhile, Food inflation in Davao City increased from 9.2 in January 2023 to 10.3 percent in February 2023. It was mainly due to the increase in inflation of (1) Vegetables, Tubers, Plantains, Cooking Bananas and Pulses at 29.6 percent with 41.1 percent share to the food inflation; (2) Meat and Other Parts of Slaughtered Land Animals at 12.9 percent with 17.4 percent share to the food inflation; and (3) Fruits and Nuts at 7.6 percent with 14.8 percent share to the food inflation. Also exhibiting higher inflation rates are the following food groups:

1. Fish and Other Seafood, -1.7 percent;
2. Milk, Other Dairy Products and Eggs, 14.9 percent;
3. Ready-made Food and Other Food Products N.E.C., 12.5 percent.

The rest of the food groups, despite the increasing food inflation in the city, decreased in February 2023, specifically Rice at 2.2 percent, Corn at 58.4 percent, Flour Bread and Other Bakery Products, Pasta Products, and Other Cereals at 11.8 percent, Oils and Fats at 30.3 percent and Sugar, confectionery and desserts at 38.8 percent.

In addition, the February 2023 Purchasing Power of Peso (PPP) in Davao City decreased to 0.81 from 0.82 in January 2023. PPP in February 2022 was at 0.90. (Figure 2)

Technical Notes:

Consumer Price Index (CPI) - The CPI is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.

Inflation Rate (IR) - The inflation rate is the annual rate of change, or the year-on-year change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of money.

Headline Inflation - measures changes in the cost of living based on movements in the prices of a specified basket of major commodities. It refers to the annual rate of change or the year-on-year change in the Consumer Price Index (CPI).

Purchasing Power of the Peso (PPP) - The purchasing power of the peso shows how much the peso in the base period is worth in the current period. It is computed as the reciprocal of the CPI for the period under review multiplied by 100.