The overall inflation rate in Davao Oriental further slowed to 2.6 percent in August 2024 from 4.4 percent in July 2024. This brings the provincial average inflation from January to August 2024 to 4.8 percent. In August 2023, the inflation rate was higher at 7.0 percent. (Tables A and B, and Figure 1).

The overall inflation downtrend in August 2024 was primarily driven by a slower annual increase in food and non-alcoholic beverages, which fell to 4.0 percent from 6.1 percent in July 2024. Additionally, the transport index's growth rate slowed to -3.3 percent in August 2024, down from 3.6 percent in the previous month, further contributing to the decline. 

Likewise, lower annual increments were noted in the indices of the following commodity groups during the month:

a. Housing, water, electricity, gas and other fuels, 1.4 percent from 1.8 percent; 

b. Education services, 5.1 percent from 11.0 percent; 

c. Personal care, and miscellaneous goods and services, 3.3 percent from 4.3 percent; 

d. Clothing and footwear, 3.1 percent form 3.7 percent; 

e. Recreation, sport and culture, 11.6 percent from 12.3 percent; 

f. Furnishings, household equipment and routine household maintenance, 2.6 percent from 2.8 percent; 

g. Health, 2.4 percent from 2.6 percent; and 

h. Alcoholic beverages and tobacco, 1.6 percent from 1.7 percent.

On the contrary, the index of information and communication exhibited a higher annual increase of 0.8 percent during the month from 0.0 percent in July 2024. 

The indices of the rest of the commodity groups retained their respective previous month’s annual rates. (Tables C) 

Food inflation at the provincial level eased further to 4.1 percent in August 2024 from 6.4 percent in the previous month. In August 2023, food inflation was higher at 9.5 percent. (Table D) 

The deceleration of food inflation in August 2024 was primarily brought about by the slower inflation rate of rice with 20.1 percent in August 2024 from 24.6 percent in the previous month. This was followed by fish and other seafood with a year-on-year decline of -9.3 percent during the month from -5.0 percent in July 2024. 

Moreover, slower annual rates were noted in the indices of the following food groups during the month: 

  a. Meat and other parts of slaughtered land animals, -4.9 percent from -3.1 percent; 

  b. Vegetables, tubers, plantains, cooking bananas and pulses, 21.2 percent from 22.9 percent;

  c. Fruits and nuts, -7.4 percent from -4.3 percent; 

  d. Corn, 20.0 percent from 21.3 percent; and 

  e. Flour, Bread and other bakery products, pasta products, and other cereals, 1.8 percent form 2.5   percent. 

In contrast, higher annual growth rates were noted in the indices of the following food groups: 

  a. Milk, other dairy products and eggs, -4.4 percent from -6.3 percent; 

  b. Oils and fats, 4.4 percent form 2.7 percent; 

  c. Sugar, confectionery and desserts, -12.2 percent from -12.7 percent; and 

  d. Ready-made food and other food products N.E.C., 9.0 percent from 8.8 percent. (Table D)

Relative to their July 2024 inflation rates, five provinces in the Davao Region, excluding Davao City, exhibited lower inflation in August 2024. Davao Oriental recorded the lowest inflation rate at 2.6 percent, while Davao Occidental continued to have the highest rate at 6.8 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 remained at 0.77 as of August 2024, meaning that PhP1.00 in 2018 is equivalent to PhP0.77. In contrast, the PPP in August 2023 was slightly higher at 0.79. (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