The headline inflation of prices in Davao de Oro Province decreased to 12.2 percent in January 2023 from 12.8 percent in December 2022 or a decrease of 0.6 percentage points. Inflation of prices in January 2022 was lower at 4.9 percent. The average inflation for the first month of 2023 stood at 12.2 percent. (Table 1 and Figure 1)

The decline in the province’s inflation was mainly brought about by the downtrend annual rate in the index of Food and non-alcoholic beverages which declined to 11.6 percent from 12.8 percent in December 2022; Housing, water, electricity, gas and other fuels at 17.2 percent from 16.9 percent in December 2022; and Transport at 14.0 percent from 13.8 percent in December 2022. (Table 2)

Also contributing to the downtrend 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:

1. Alcoholic, beverages and tobacco, 12.0 percent;

2. Clothing and footwear, 9.8 percent; and

3. Furnishings, household equipment and routine household maintenance, 12.5 percent.

Health and Recreation, sport and culture commodity groups showed an uptrend in the overall inflation at 6.6 percent and 13.9 percent, from 6.4 percent and 13.8 percent on the previous month, respectively. The remaining commodity groups posted the same inflation rate comprising the Information and communication with 4.8 percent, Restaurants and accommodation services at 9.4 percent, and Personal care and miscellaneous goods and services at 10.4 percent. Education services and Financial services remain no price changes since July 2020 and April 2022. 

Food and non-alcoholic beverages group shared the highest contribution for the month’s inflation rate at 5.8 points (47.9 percent). As to the percent share to the month’s downtrend rate of the said group, Fruit-bearing vegetables, fresh or chilled posted the highest percent share at 31.4 percent, followed by Other vegetables, fresh or chilled at 22.7 percent, and Cereals at 18.9 percent. (Table 3)  

The second highest contributor for January 2023 inflation rate is the Housing, water, electricity, gas, and other fuels commodity group with a contribution of 3.0 points (24.9 percent) among all items. Under this group, Electricity posted the highest percent share to the inflation uptrend at 45.9 percent, followed by Liquefied hydrocarbons with a percent share of 23.1 percent, and Materials for the maintenance and repair of the dwelling at 20.9 percent, respectively. (Table 4)

Transport commodity group ranked third with a contribution of 1.2 points (9.5 percent). Under this group, Gasoline posted the highest percent share to the inflation uptrend at 85.0 percent, followed by Tires with a percent share of 14.8 percent, and Maintenance and repair of personal transport equipment at 0.3 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 January 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).