The overall inflation rate in Davao Oriental further decelerated to 0.7 percent in December 2024 from 1.1 percent in November 2024. This brings the province's average inflation rate for the period of January to December 2024 to 3.7 percent. In December 2023, the inflation rate was higher at 6.0 percent. (Tables A and B, and Figure 1)

The downtrend in the overall inflation in December 2024 was primarily brought about by the lower year-on-year growth rate in the heavilyweighted food and non-alcoholic beverages index at 1.3 percent in December 2024 from 2.6 percent in the previous month. This was followed by recreation, sport, and culture index with an inflation rate of 5.1 percent from 6.2 percent in November 2024. 

Lower annual increments were also noted in the following commodity groups during the month:

a. Health, 0.8 percent from 1.4 percent; and 

b. Personal care and miscellaneous goods and services, 2.4 percent from 2.6 percent.

In contrast, faster annual growth rates were observed in the indices of these commodity groups: 

a. Clothing and footwear, 3.6 percent from 2.6 percent; 

b. Housing, water, electricity, gas, and other fuels, -0.9 percent from -1.8 percent; 

c. Furnishings, household equipment, and routine household maintenance, 2.1 percent from 1.8 percent; and 

d. Transport, -3.6 percent from -5.9 percent.

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

At the provincial level, food inflation decreased to 1.3 percent in December 2024 from 2.7 percent in the previous month. In comparison, food inflation in December 2023 was significantly higher at 6.8 percent. (Table D)

 The slowdown in food inflation was primarily due to the slower annual growth rate in the rice index at -0.5 percent during the month from 4.2 percent in November 2024. Corn also experienced a significant decline in inflation, recording -14.8 percent compared to -7.4 percent in the previous month.

 Lower annual increments were also noted in the indices of the following food groups:

a. Fruits and nuts, -5.0 percent from 0.1 percent; 

b. Fish and other seafood, 4.8 percent from 5.0 percent;

c. Ready-made food and other food products n.e.c., 3.5 percent from 3.9 percent; and 

d. Oils and fats, 5.6 percent form 6.4 percent.

 In contrast, higher year-on-year growth rates were noted in the indices of the following food groups during the month: 

a. Flour, Bread and other bakery products, pasta products, and other cereals, 2.1 percent form 1.9 percent; 

b. Meat and other parts of slaughtered land animals, 0.4 percent from -0.5 percent; 

c. Milk, other dairy products and eggs, 1.5 percent from -0.1 percent; 

d. Vegetables, tubers, plantains, cooking bananas and pulses, 15.9 percent from 13.5 percent; and 

e. Sugar, confectionery and desserts, -1.7 percent from -2.8 percent. (Table D)

In December 2024, inflation decreased across all provinces in the Davao Region compared to November, except for Davao del Norte and Davao City, which recorded higher rates. Davao Oriental reported the lowest inflation rate at 0.7 percent, while Davao del Sur registered the highest at 3.4 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 December 2024, meaning that PhP1.00 in 2018 is equivalent to PhP0.77 today. In contrast, the PPP in December 2023 was slightly higher at 0.78. (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

 Chief Statistical Specialist