The headline inflation of prices in Davao de Oro Province increased to 13.2 percent in October 2022 from 12.5 percent in September 2022. This is the highest recorded inflation of prices since January 2019. Inflation of prices in October 2021 was lower at 3.4 percent. The average inflation for the first nine months of the year stood at 9.1 percent. (Table 1 and Figure 1)

The increase in the province’s inflation was mainly brought about by the higher annual increase in the index of Food and Non-Alcoholic Beverages at 13.3 percent; Housing, Water, Electricity, Gas and Other Fuels at 17.3 percent; and transport at 16.5 percent. (Table 2)

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

a. Recreation, Sport and Culture, 11.6 percent;

b. Furnishings, Household, Equipment and Routine, 11.5 percent;

c. Alcoholic Beverages and Tobacco, 11.3 percent; and

d. Personal Care, and Miscellaneous Goods and Services, 9.8 percent.

Education Services group remains at zero percent inflation rate since July 2020, while the Financial Services commodity group remains zero percent inflation rate for the seven successive months. The rest of the commodity groups had a decline on their contribution to the uptrend in the overall inflation, except for the Restaurants and Accommodation Services group which remains at 9.4 percent for the six successive months.

Food and Non-Alcoholic Beverages group shared the highest contribution for the month inflation rate at 6.7 points (50.9 percent). The major contributor to the inflation from the sub-items of this group are Cereals (ND) at 46.5 percent, Cane and beet sugar (ND) at 10.1 percent, and Meat, fresh, chilled or frozen (ND) at 7.5 percent. (Table 3)

The second highest contributor for September 2022 inflation rate is the Housing, Water, Electricity, Gas, and Other Fuels commodity group with a contribution of 3.1 points (23.2 percent). Under this group, electricity ranked first with a contribution of 71.3 percent, followed by actual rentals paid by tenants for main residence, and wood fuel including pellets and briquettes with a contribution of 18.3 and 5.3 percent, respectively. (Table 4)

Transport commodity group ranked third with a contribution of 1.4 points (10.4 percent). Under this group, gasoline has the highest contribution to inflation at 38.9 percent, followed by other passenger transport by road, and passenger transport by bus and coach with a contribution of 26.3 and 18.5 percent, respectively. (Table 5)

Consequently, the Purchasing Power of Peso (PPP) based on year 2018 in Davao de Oro Province is equivalent to 0.82 in October 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).