The headline inflation of prices in Davao de Oro increased to 5.6 percent in July 2024 from 3.4 percent in June 2024, or an increase of 2.2 percentage points. Inflation of prices in July 2023 was lower at 3.1 percent. The average inflation for the year 2024 stood at 4.4 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 increased to 9.5 percent from 6.8 percent in June 2024; and Housing, water, electricity, gas and other fuels which increased to -1.5 percent from -5.2 percent in June 2024.

On the uptrend of the July 2024 inflation, these two commodity groups had a share of 57.6 percent, and 27.6 percent respectively.

The following commodity groups posted an uptrend in the overall inflation during the period as compared with their previous month’s inflation rates:

a. Food and non-alcoholic beverages, 9.5 percent;
b. Housing, water, electricity, gas and other fuels, -1.5 percent;
c. Transport, 2.7 percent;
d. Recreation, sport and culture, 7.1 percent;
e. Education services, 3.2 percent; and
f. Restaurant and accommodation services, 8.2 percent.

On the other hand, five commodity groups posted a downtrend in the overall inflation for the month of July 2024. These are Alcoholic beverages and tobacco with 1.5 percent inflation; Clothing and footwear with 4.7 percent inflation; Furnishings, household equipment and routine household maintenance with 4.7 percent inflation; Health with 6.3 percent inflation; and Personal care, and miscellaneous goods and services with 2.2 percent inflation.

Meanwhile, Information and communication commodity group retained its inflation rate from June 2024 to July 2024. Additionally, Financial services remain no price changes since April 2022. (Table 2)

Food and non-alcoholic beverages group shared the highest contribution for the month’s inflation rate with 83.0 percent share (4.7 points). As to the share to the month’s inflation rate of the said commodity group, Cereals and cereal products posted the highest percent share having a 14.0 percent inflation rate, followed by Vegetables, tubers, plantains, cooking bananas and pulses with 24.2 percent inflation rate, and Fish and other seafoods with 7.3 percent inflation rate. (Table 3)
 

The second highest contributor for the July 2024 inflation rate is the Restaurants and accommodation services commodity group having a 5.8 percent share (0.3 point) among all items. Under this group, Restaurant, café and the like posted the highest percent share with 8.2 percent inflation rate. (Table 4)

Transport commodity group ranked third with a 3.9 percent share (0.2 point). Under this group, Fuels and lubricants for personal transport equipment posted the highest percent share having 6.5 percent inflation  rate; followed by Motorcycles with 1.8 percent inflation rate, and Parts and accessories for personal transport equipment with 0.6 percent inflation rate.

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

Consequently, the Purchasing Power of Peso (PPP) based on year 2018 in Davao de Oro is equivalent to 0.76 in July 2024. (Figure 2)

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).