The headline inflation of prices in Davao de Oro Province increased to 12.8 percent in December 2022 from 12.1 percent in November 2022 or an increase of 0.7 percentage point. Inflation of prices in December 2021 was lower at 4.7 percent. The average inflation for the whole year stood at 9.6 percent. (Table 1 and Figure 1)

The increase in the province’s inflation was mainly brought about by the annual rate in the index of Food and non-alcoholic beverages which remains at 12.8 percent from November 2022; Housing, water, electricity, gas and other fuels at 16.9 percent from 14.4 percent in November 2022; and Transport at 13.8 percent from 12.7 percent in November 2022. (Table 2)

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

a. Furnishings, household equipment and routine household maintenance, 12.6 percent;

b. Health, 6.4 percent;

c. Information and communication, 4.8 percent;

d. Recreation, sport and culture, 13.8 percent; and

e. Personal care, and miscellaneous goods and services, 10.4 percent.

Alcoholic beverages and tobacco, and Clothing and footwear posted a decline at 12.1 and 10.3 percent from 12.2 and 10.6 percent, respectively. Education services commodity group remains at zero percent inflation rate since July 2020, while the Financial services group remains at zero percent inflation rate since January 2019. Moreover, Restaurants and accommodation services remains its rate at 9.4 percent since May 2022.

Food and non-alcoholic beverages group shared the highest contribution for the month’s inflation rate at 6.5 points (50.6 percent). As to the contribution to the month’s uptrend rate of the said group, Cereals posted the highest percent share at 38.2 percent, followed by Cane and beet sugar at 12.0 percent, and other vegetables, fresh or chilled at 6.2 percent. (Table 3)  

The second highest contributor for December 2022 inflation rate is the Housing, water, electricity, gas, and other fuels commodity group with a contribution of 3.0 points (23.4 percent) among all items. Under this group, Actual rentals paid by tenants for main residence posted the highest percent share to the inflation uptrend at 51.3 percent, followed by Electricity and Liquefied hydrocarbons with a percent share of 37.9 and 9.1 percent, respectively. (Table 4)

Transport commodity group ranked third with a contribution of 1.2 points (9.0 percent). Under this group, Gasoline posted the highest percent share to the inflation uptrend at 88.5 percent, followed by Passenger transport by air, domestic, and Maintenance and repair of personal transport equipment with a percent share of 7.3 and 3.6 percent, respectively. (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 0.81 in December 2022. (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).