The headline inflation of prices in Davao de Oro Province increased to 3.6 percent in August 2023 from 3.1 percent in July 2023 or an increase of 0.5 point. Inflation of prices in August 2022 was higher at 10.2 percent. The average inflation for the year 2023 stood at 7.9 percent. (Table 1 and Figure 1)

The increase in the province’s inflation was mainly brought about by the uptrend annual rate in the index of Food and non-alcoholic beverages which inclined to 7.4 percent from 4.8 percent in July 2023; Personal care, and miscellaneous goods and services at 8.0 percent from 7.3 percent in July 2023; and Furnishings, household equipment and routine household maintenance at 10.5 percent from 9.6 percent in July 2023. (Table 2)

Also contributing to the uptrend in the overall inflation during the period were the annual price changes in the indices of the following commodity groups as compared with their previous month’s inflation rates:

  a. Clothing and footwear, 8.3 percent;

  b. Health, 7.7 percent;

  c. Transport, -2.5 percent;

  d. Information and communication, 2.2 percent; 

  e. Recreation, sport and culture, 18.8 percent; and 

  f. Education services, 2.5 percent.

Alcoholic beverages and tobacco, and Housing, water, electricity, gas and other fuels showed a downtrend rate in the overall inflation from 10.0 percent and 1.5 percent in July 2023 to 9.9 percent and -7.5 percent in August 2023, respectively. Restaurants and accommodation services commodity groups posted the same inflation rate at 1.0 percent, while Financial services remain no price changes since April 2022.

Food and non-alcoholic beverages group shared the highest contribution for the month’s inflation rate at 3.5 points (98.3 percent). As to the percent share to the month’s uptrend rate of the said commodity group, Cereals posted the highest percent share at 37.4 percent, followed by Fish, live, fresh, chilled or frozen at 29.5 percent, and Fruit-bearing vegetables, fresh or chilled at 18.4 percent. (Table 3)

The second highest contributor for August 2023 inflation rate is the Personal care, and miscellaneous goods and services commodity group with a contribution of 0.3 points (9.3 percent) among all items. Under this group, Hairdressing posted the highest percent share to the inflation uptrend at 61.0 percent, followed by Other appliances, articles and products for personal care at 27.0 percent, and Travel goods and articles for babies and other personal effects with a percent share of 10.9 percent. (Table 4)

Furnishings, household equipment and routine household maintenance commodity group ranked third with a contribution of 0.3 points (8.9 percent). Under this group, Other non-durable household goods posted the highest percent share to the inflation uptrend at 72.7 percent, followed by Domestic services by paid staff with a percent share of 26.0 percent, and Major laundry appliances at 1.3 percent. (Table 5)

Below is the inflation rates trend of Davao de Oro Province since the rebasing of market basket with year 2018 as the base year. (Table 6)

Consequently, the Purchasing Power of Peso (PPP) based on year 2018 in Davao de Oro Province is equivalent to 0.80 in August 2023. (Figure 2)

Technical Notes:

Price – is the amount or value paid in exchange for the commodity or a service rendered.

Retail/Consumer Price – refers to the price at which a commodity is sold in small quantities for consumption. 

Market Basket– a term used to refer to a sample of goods and services that are commonly purchased and bought by an average Filipino household. 

Consumer Price Index (CPI) – it is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by an average. Filipino household. It shows how much on the average, prices of goods and services have increased or decreased from a particular reference period known as base year.

Inflation Rate – is an indicator derived from the CPI. It refers to 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. 

Weight– a value attached to a commodity or group of commodities depending on the magnitude of its contribution to the index. 

Base Period – a reference date at which the index is equal to 100. Base year is 2018. 

Index Methodology– a Laspeyre’s formula: fixed base year and weights. 

Purchasing Power of the Peso (PPP) – the measure of how much the peso in the base period is worth in the current period. 

Percentage Change– is a simple mathematical concept that represents the degree of change over time. It is used for many purposes in finance, often to represent the price change of a security. 

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).