The headline inflation of prices in Davao de Oro Province decreased to 4.7 percent in December 2023 from 5.1 percent in November 2023 or a decrease of 0.4 point. Inflation of prices in December 2022 was higher at 12.8 percent. The average inflation for the year 2023 stood at 6.9 percent. (Table 1 and Figure 1)

The decrease in the province’s inflation was mainly brought about by the downtrend annual rate in the index of Housing, water, electricity, gas and other fuels which declined to -5.0 percent from -3.0 percent in November 2023; Furnishings, household equipment and routine household maintenance at 9.1 percent from 9.9 percent in November 2023; and Personal care, and miscellaneous goods and services at 6.6 percent from 7.1 percent in November 2023. On the downtrend of the December inflation, these three commodity groups had a share of 76.5 percent, 5.6 percent, and 4.8 percent, respectively. (Table 2)

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

   a. Alcoholic beverages and tobacco, 9.2 percent; 

   b. Clothing and footwear, 8.8 percent; 

   c. Health, 7.3 percent; 

   d. Information and communication, 0.9 percent; and 

   e. Recreation, sport and culture, 17.4 percent.

Meanwhile, Food and non-alcoholic beverages, and Transport commodity groups showed an uptrend rate in the overall inflation for the month of December 2023 with 8.7 percent and -0.9 percent inflation rates. Moreover, Education services, and Restaurant and accommodation services posted the same inflation rate from November to December 2023. 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 at 4.2 points (89.9 percent). As to the percent share to the month’s uptrend rate of the said commodity group, Cereals and cereal products posted the highest percent share with 15.3 percent inflation rate, followed by Fruits and nuts with 34.5 percent inflation rate, and Vegetables, tubers, plantains, cooking bananas and pulses with 8.4 percent inflation rate. (Table 3)

The second highest contributor for December 2023 inflation rate is the Clothing and footwear commodity group with a contribution of 0.3 points (6.3 percent) among all items. Under this group, Garments posted the highest percent share with 9.1 percent inflation rate; followed by Shoes and other footwear with 8.1 percent inflation rate.

Furnishings, household equipment and routine household maintenance commodity group ranked third with a contribution of 0.3 points (6.0 percent). Under this group, Non-durable household goods posted the highest percent share with 8.9 percent inflation rate, followed by Domestic services and household services with 12.9 percent inflation rate, and Major household appliances, whether electric or not with 7.9 percent inflation. (Table 5)

Consequently, the Purchasing Power of Peso (PPP) based on year 2018 in Davao de Oro Province is equivalent to 0.77 in December 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).