High inflation rate a challenge to Davao Region’s economic recovery, says biz exec

Market goers flock to the vegetable section of the Bankerohan Market in Davao City on Thursday, 5 January 2023. MindaNews Photo

DAVAO CITY (MindaNews / 10 February) – High inflation rate has remained a major challenge hampering the economic recovery of Davao Region, Davao City Chamber of Commerce and Industries Inc. president John Carlo Tria said.

In a virtual interview over “One Davao on COVID-19: A Virtual Presser” on Thursday, Tria said the high inflation rate would affect local businesses, particularly the small enterprises.

“We have a lot of challenges, and one of them is high inflation. If goods are expensive, that means raw materials used in businesses are also expensive. For example, food served at restaurants will be expensive because they buy costly ingredients,” he said.

He said inflation would affect local businesses because costly goods would discourage sales, creating a snowball effect on other industries.

He believed that inflation has a bearing on the capability of local producers to manufacture goods as the materials, some of them imported, have become costlier.

He said the transportation cost is relatively more expensive these days as prices of oil in the world market have gone up due to the conflict between Russia and Ukraine.

Last January 8, the Philippine Statistics Authority reported that the inflation rate in Davao Region in November 2022 remained the highest among the country’s 17 regions at 9.7%.

From January to November, the average inflation was reported at 7.3%.

An increase was seen in alcoholic beverages and tobacco at 13.1% from 12.2%; clothing and footwear at 5.5% from 4.7%; furnishings, household equipment and routine household maintenance at 7.3% from 6.5%; health at 6.1% from 5.3%; information and communication at 1.2% from 1.1%; recreation, sport and culture at 6% from 5.1%; restaurants and accommodation services at 7.5% from 6.4%; and personal care, and miscellaneous goods and services at 6.5% from 5.7%.

The slight decline in the regional inflation for food to 11.9% from 12% was attributed to the decrease in the annual growth rate of fish and other seafood at 8.7% from 14%; vegetables, tubers, plantains, cooking bananas and pulses at 13.1% from 16.7%; meat and other parts of slaughtered land animals at 12.3% from 12.5%; milk, other dairy products and eggs at 7.7% from 7.9%; and ready-made food and other food products at 8.1% from 8.4%.

However, increases were reported in rice at 6.2% from 2.8%; corn at 40.5% from 2.8%; flour, bread and other bakery products, pasta products, and other cereals at 10.2% from 8.8%; oils and fats at 30.3% from 28.7%; fruits and nuts at 11.8% from 8.4%; and sugar, confectionery and desserts at 51.8% from 46.8%.

But Tria added that Davao remains an ideal destination for investments, owing greatly to the improved peace and order situation in Mindanao.

“The fact you are in Davao… you can do business not just in Davao but also in other parts of Mindanao and nearby provinces of Indonesia and Malaysia,” he said. (Antonio L. Colina IV/MindaNews)