The inflation in Davao Oriental accelerated to 7.0 percent in August 2023, from 5.0 percent in July 2023. This brings the average inflation rate from January to August 2023 to 8.8 percent. In August 2022, inflation was higher at 7.7 percent. (Tables A and B, and Figure 1)

The acceleration in the province’s inflation rate in August 2023 was due to higher annual growth rate in the index for food and non-alcoholic beverages at 9.3 percent, from 6.4 percent in July 2023. This was followed by transport with -1.7 percent annual growth, from -9.8 percent in July 2023. 

Also contributing to the uptrend in the overall inflation in August 2023 were the higher annual increases in the indices of the following commodity groups: 

a. Personal care, and miscellaneous goods and services, 9.2 percent; 

b. Recreation, sport and culture, 11.4 percent; 

c. Furnishings, household equipment and routine household maintenance, 6.7 percent; and 

d. Alcoholic beverages and tobacco, 11.0 percent.

On the other hand, lower annual increments were observed in the indices of housing, water, electricity, gas and other fuels at 0.1 percent; health at 5.7 percent; and education services at 8.2 percent.

 The indices of the following commodity groups retained their previous month’s annual growth rates:

a. Clothing and footwear, 4.4 percent; 

b. Information and Communication, 0.0 percent;

c. Restaurants and accommodation services, 18.8 percent; and 

d. Financial Services, 0.0 percent. (Tables C)

Inflation for food rose to 9.5 percent in August 2023, from 6.4 percent in July 2023. In August 2022, food inflation was observed at 5.7 percent. (Table D).

By specific food item, double-digit annual growth rates were noted in the indices of rice at 13.6 percent; and fish and other seafood, 14.0 percent. 

Faster annual growth rates were also seen in the following food groups: a. Corn, 7.4 percent; b. Flour, bread and other bakery products, pasta products, and other cereals, 7.0 percent; c. Meat and other parts of slaughtered land animals, 3.1 percent; and d. Vegetables, tubers, plantains, cooking bananas and pulses, 8.1 percent.

On the contrary, slower annual growth rates were observed in the indices of milk, other dairy products and eggs at 14.1 percent; oils and fats at 8.2 percent; fruits and nuts at 4.9 percent; sugar, confectionery and desserts at 2.7 percent; and ready-made food and other food products at 5.4 percent. (Table D)

Compared with their respective annual growth rates in July 2023, only Davao City recorded lower inflation rate in August 2023. Among the provinces in Davao Region, the province of Davao Oriental registered the highest inflation rate at 7.0 percent, while the lowest was still registered in Davao del Norte at 1.6 percent. (Table E)

Purchasing Power of the Peso (PPP)

The purchasing power of the peso (PPP) shows how much the peso in the base year (2018) is worth in another period. It is computed by getting the reciprocal of the CPI and multiplying the result by 100.

 The PPP in Davao Oriental Stood at 0.79. This means that the amount of PhP 100.00 in 2018 is equivalent to PhP 79.00 in August 2023. In August 2022, the PPP was higher at 0.84. (Figure 2)

TECHNICAL NOTES 

Uses of CPI 

The CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is a major statistical series used for economic analysis and as a monitoring indicator of government economic policy. 

Computation of CPI 

The computation of the CPI involves consideration of the following important points:

a. Base Year/Period - A period, usually a year, at which the index number is set to 100. It is the reference point of the index number series. 

b. Market Basket - A sample of the thousands of varieties of goods purchased for consumption and services availed by the households in the country selected to represent the composite price behavior of all goods and services purchased by consumers. 

c. Weighting System - The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure. 

d. Formula - The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2006) weights. 

e. Geographic Coverage - CPI values are computed at the national, regional, and provincial levels, and for selected cities.

 Note: CPIs and inflation rates by province and selected city are posted at the PSA website (https://openstat.psa.gov.ph/). 

Approved for release:

EMILY P. TOMOGDAN 

(Supervising Statistical Specialist) 

Officer-in-Charge