Headline Inflation

The headline inflation rate in the Province of Dinagat Islands continued its downward track in December 2024, dropping to 0.1 percent from 0.4 percent in November 2024—a decline of 0.3 percentage points. This also marks a significant reduction of 6.6 percentage points compared to the 6.7 percent inflation rate recorded in December 2023. The year-to-date inflation rate averaged 3.6 percent, surpassing both the national average of 3.2 percent and the regional average of 2.6 percent (refer to Table A and Figure 1).

Main Drivers of the Downward Trend in Overall Inflation

The December 2024 decline in inflation was primarily driven by the Food and Non-Alcoholic Beverages group, which registered a -0.1 percent inflation rate, accounting for approximately 70.9 percent of the overall decrease in provincial inflation.

Moreover, Health commodity group experienced also a slower price increase for this month from 0.0 percent to -1.6 percent contributing about 11.7 percent to the provincial trend.

Other commodity groups that contributed to the downtrend in price indices include:

•    Alcoholic Beverages and Tobacco: Inflation rate plunges 3.8 percent from 4.7 percent in previous month.
•    Clothing and Footwear: Inflation rate decreased to 0.3 percent from 1.0 percent in the previous month.
•    Furnishings, Household Equipment, and Routine Household Maintenance: Inflation rate dropped to 2.4 percent from 3.0 percent.
•    Restaurants and Accommodation Services: Inflation rate eased to 2.0 percent from 2.2 percent.

Conversely, some commodity groups experienced price increases:

•    Transport: Inflation rate rebounded to 1.9 percent from -0.6 percent in November 2024.
•    Recreation, Sports, and Culture: Inflation rate increased to 2.8 percent from 2.7 percent.
•    Personal Care, and Miscellaneous Goods and Services: Inflation rate rose to 0.8 percent from 0.0 percent in the prior month.

Additionally, the following commodity groups maintained stable inflation rates for December 2024:

•    Information and Communication: Inflation rate steady at 0.5 percent.
•    Education Services: Inflation rate unchanged at 0.0 percent.
•    Financial Services: Inflation rate remained at 0.0 percent.
•    Housing, water, electricity, gas and other fuels maintained at 0.1 percent.

Top Contributors to Overall Provincial Inflation

The following commodity groups emerged as the top contributors to the overall inflation rate in December 2024 for all income households:

•    Furnishings, Household Equipment, and Routine Household Maintenance: Contributed 98.9 percent share to the total inflation rate of the province.
•    Alcoholic Beverages and Tobacco: Contributed 87.5 percent or 0.09 percentage points to the total provincial inflation.
•    Restaurants and Accommodation Services: Contributed 83.0 percent or 0.08 percentage points.

Food Index

The food index for December 2024 exhibited a tempered decrease in average price indices, declining to -0.1 percent from 0.5 percent in November 2024. Key contributors to the declining food index include:

1.    Fish and other seafood: Inflation rate fell to -2.8 percent from -7.6 percent in prior month contributing191.0 percent or 0.38 percentage points to the total food index.
2.    Cereals and Cereal Products (particularly rice): Inflation rate plunge to -0.8 percent from 0.4 percent, contributing 120.3 percent or 0.24 percentage points to the overall food inflation.
3.    Vegetables, Tubers, Plantains, Cooking Bananas, and Pulses: Inflation rate decreased significantly to -2.2 percent from 5.2 percent in November 2024, with a contribution share of 55.7 percent or 0.11 percentage points.

Purchasing Power of the Peso

The Purchasing Power of the Peso (PPP) in the Province of Dinagat Islands was recorded at Php 0.73 in December 2024, significant easing of inflationary pressures in the province, driven largely by food price stabilization and other key commodity groups.

(Sgd.)GLENNBOY C. LISTON
Chief Statistical Specialist
Dinagat Islands-PO

Technical Notes

The Philippine Statistics Authority generates the monthly Consumer Price   Index (CPI) based on the nationwide survey of prices for a given basket of goods and services. Two important indicators, the inflation rate and purchasing power of the peso (PPP) are derived from the CPI which is important in monitoring price stability and the value of the country’s currency.

The Consumer Price Index (CPI) is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year. It shows how much on the average, prices of goods and services have increased or decreased from a particular reference period known as base year.

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

The CPI is also used to adjust other economic series for price changes.  Another major importance of the CPI is its use as basis to adjust wages in labor management contracts as well as pensions and retirement benefits. 

Inflation rate refers to the rate of change in the average prices of goods and services typically purchased by consumers. It is interpreted in terms of declining purchasing power of money.

The Purchasing Power of the Peso (PPP) indicates the value of the peso in the period under       review as compared to the   value of the peso in the base period. It is computed as the reciprocal of the CPI for the period under review     multiplied by 100.