The inflation in Davao Oriental slowed down to 6.5 percent in September 2023, from 7.0 percent in August 2023. This brings the average inflation rate from January to September 2023 to 8.5 percent. In September 2022, inflation was higher at 9.6 percent. (Tables A and B, and Figure 1)

The downtrend in the province’s inflation in September 2023 was primarily brought about by the slower year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 8.1 percent during the month from 9.3 percent in August 2023. 

Compared with their previous month’s inflation rates, slower annual increments were noted in the indices of the following commodity groups during the month: 

a. Restaurants and accommodation services, 17.0 percent from 18.8 percent; 

b. Alcoholic beverages and tobacco, 10.6 percent from 11.0 percent; and 

c. Housing, water, electricity, gas and other fuels, 0.0 percent from 0.1 percent.

On the contrary, higher annual increases were noted in the indices of the following commodity groups during the month: 

a. Clothing and footwear, 4.8 percent from 4.4 percent; 

b. Furnishings, household equipment and routine household maintenance, 6.9 percent from 6.7 percent; 

c. Health, 6.2 percent from 5.7 percent; 

d. Transport, 0.8 percent from -1.7 percent; 

e. Recreation, sport and culture, 12.0 percent from 11.4 percent;

f. Education services, 11.0 percent from 8.2 percent; and  
g. Personal care, and miscellaneous goods and services,10.0 percent from 9.2 percent. (Tables C)

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

Food inflation slowed down to 8.2 percent in September 2023. In the previous month, food inflation was recorded at 9.5 percent, while it was 9.1 percent in September 2022. (Table D)

 The deceleration of food inflation in September 2023 was primarily influenced by the annual decrease in fish and other seafoods at 1.7 percent during the month from 14.0 percent in August 2023. This was followed by meat and other parts of slaughtered land animals with an inflation of 0.0 percent in September 2023 from 3.1 percent in August 2023. Also contributing to the downtrend of food inflation in September 2023 was the slower year-on-year growth of vegetables, tubers, plantains, cooking bananas and pulses at 3.7 percent during the month from 8.1 percent in the previous month. 

Moreover slower annual growth rates were also observed in the following food groups: 

a. Sugar, confectionery and desserts, 0.1 percent from 2.7 percent; 

b. Oils and fats, 4.6 percent from 8.2 percent; 

c. Corn, 1.1 percent from 7.4 percent; and 

d. Flour, bread and other bakery products, pasta products, and other cereals, 6.2 percent from 7.0 percent.

Meanwhile, compared with their previous month’s inflation rates, higher year-on-year growth rates were observed in the indices of rice at 22.9 percent from 13.6 percent; milk, other dairy products and eggs at 26.7 percent from 14.1 percent; fruits and nuts at 9.5 percent from 4.9 percent; and ready-made food and other food products at 5.8 percent from 5.4 percent. (Table D)

Compared with their respective annual growth rates in August 2023, only Davao Oriental recorded lower inflation rate in September 2023. Davao Del Sur recorded the lowest inflation rate in September 2023 at 3.3 percent, while Davao Oriental had the highest inflation rate at 6.5 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 September 2023. In September 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