The inflation in Davao Oriental increased to 7.2 percent in October 2023, from 6.5 percent in September 2023. This brings the average inflation from January to October 2023 to 8.3 percent. In October 2022, inflation was higher at 8.1 percent. (Tables A and B, and Figure 1)

The uptrend in the province’s inflation in October 2023 was primarily brought about by the higher year-on-year increase in housing, water, electricity, gas and other fuels at 4.0 percent during the month from 0.0 percent in the previous month. Also contributing to the uptrend in the overall inflation in October 2023 were the higher annual increases in the indices of the following commodity groups:

In contrast, the following commodity groups showed lower inflation rates during the month:

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

Food inflation rose to 8.4 percent in October 2023. In the previous month, food inflation was recorded at 8.2 percent, while it was 7.3 percent in October 2022. (Table D)

The acceleration of food inflation in October 2023 was mainly brought about by the higher inflation for rice with a double-digit inflation rate of 25.4 percent during the month from 22.9 percent in September 2023. This was followed by meat and other parts of slaughtered land animals with an inflation of 4.9 percent in October 2023 from 0.0 percent in September 2023.

Higher annual increments were also noted in the indices of the following food groups during the month:

On the contrary, lower inflation rates were noted in the indices of the following food groups during the month:

f. Sugar, confectionery and desserts, -6.8 percent from 0.1 percent. (Table D)

Relative to their respective September 2023 inflation rates, only Davao City and Davao Oriental recorded higher inflation rates in October 2023. Davao Del Sur recorded the lowest inflation rate in October 2023 at 2.6 percent, while Davao Oriental remained the province with highest inflation rate during the month at 7.2 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 0.79. This means that the amount of PhP 100.00 in 2018 is equivalent to PhP 79.00 in October 2023. In October 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