Abad, Ma.

Trisha

Del Mundo, Lailanie

Gabat, Monica

Herrera, Jace

Reyes, Angela

Sordan, Clarisse

English for Academic and Professional Purposes

Performance Task

Inflation Rate in the Philippines

Introduction

The Philippines, once belonged to the poorest countries in Asia, has been making headway
these years. It has been remarked as one of the fastest growing economy in its region, with the
purpose of attaining high and sustained growth.

In the face of impressive growth figures, the Philippines are dealing with many challenges.
Thus, the government introduced policies to help mitigate inflation rate.

Today’s condition, whereas the buoyancy of the price of commodities is likely to remain the
status quo, it is engrossing to know the relationship between economic growth and inflation in the
country.

In the Philippine the immediate expenses of inflation have been estimated by assessing its
effect on output and its components. The inflation will result in higher capital arrangement and
expand the future beneficial capacity of the economy.

A simple definition of inflation is that it is the increase in the cost of goods and services over
a time period in either a national or international economy (Harbour, 2017)

How is inflation measured? The CPI (Consumer Price Index) is used as a measure of inflation.
The price changes from the outlook of the purchaser. A measure of price changes in customers good
and services such as food, education, clothing, mobiles, gasoline and etc. The Philippine Statistics
Authority (PSA) releases the data of inflation every first week of the month for the consumers to be
aware of just how much the prices increases and have changed in the past couple years.
Causes of Inflation Rate

Nowadays, people are suffering from price hike, fare hike and everything that we used to buy
for our needs in daily life. Some said high inflation rate in the Philippines is cause by the Tax Reform
for Acceleration and Inclusion Law (TRAIN Law). The President signed into law on Dec. 19 package 1A
of the TRAIN, which slashed and restructured personal income tax rates while jacking up or slapping
new taxes on consumption of oil, cigarettes, sugary drinks and vehicles and it starts on January 1,
2018. Some says that the government thinks about it otherwise. “The rate of increase in consumer
prices might pick up in January because of the TRAIN. Weaker inflation gives the BSP more room to
keep policy rates steady even as a rate hike this year is still generally expected amid the persistent
monetary tightening of the US Fed and the inflationary impact of the country’s tax bill,” Dumalagan
said (de Vera, 2018)

Effects of Inflation Rate

Not all outcomes of inflation are bad. In fact, maintaining a healthy rate of inflation is good
for the economy (Harbour, 2017). Every Filipinos out there are affected by the rising rate of prices
here in the Philippines, but what is Inflation rate and why does this certain circumstance happen? the
Philippines has an enormous increase of the price level of goods and services that reached a massive
6.4% in August 2018. Not only is this the highest in 9.4 years and all of the ASEAN countries, but also
went beyond the government’s upper forecast which is 6.2%, and surpassed the government’s 4%
upper target for 2018. It is the highest reading ever since March 2009 and highest inflation rate since
August 2012. If inflation gets thoroughly out of control, it can totally interfere with the usual
workings of the economy, hurting its ability to supply goods. (Punongbayan,2018).

But what is the major reason behind why inflation rate actually occurs? Peso depreciation. As
the value of the Philippine peso decreases, prices of imported goods will increase thus inflation rate
occur.

As stated by the Senate President Pro Tempore Ralph Recto, “World events, external factors
are a given. That’s always the case. We must anticipate. In any circumstance there are both
opportunities and threats. A major piece of inflation is self-delivered. “They are the inner center,” In
that case, certain components do influence or affect the market price hike in the Philippines and
Peso devaluation is one of them, it might have a positive effect to the Philippine exporters but
unpleasant impact on normal Filipinos whose main goal is to make ends meet, but due to this
condition it is nearly impossible for them to provide the daily necessity in life which is food and other
necessary goods.

The positive effects include ensuring that central banks can adjust real interest rates, and
encouraging investment in non-monetary capital projects. In March 2018, the central bank set an
inflation target range of between 2 to 4 % from 2018 to 2020.
References :

1) Romero, P. (2018, September 10) Inflation self-inflicted, not caused by Trump. Retrieved from
https://www.philstar.com/headlines/2018/09/10/1850144/inflation-self-inflicted-not-caused-
trump.com
2) Punongbayan, J. (2018, September 6) Why is Philippine inflation now the highest in ASEAN.
Retrieved from https://www.rappler.com/thought-leaders/211285-analysis-reasons-philippine-
inflation-now-highest-asean.com
3) Cabuenas, J. (2018, June 12) Peso depreciation to drive inflation, yet good for Philippine
exports. Retrieved from http://www.gmanetwork.com/news/money/economy/656569/peso-
depreciation-to-drive-inflation-yet-good-for-philippine-exports/story/.com
4) De Vera, B. O. (2018, January 5). Inflation seen accelerating in ’18 due to TRAIN. Inquirer.Net.
Retrieved from http://business.inquirer.net/243536/inflation-seen-accelerating-18-due-
train.com
5) Harbour, S. (n.d.). 10 Effects of Inflation — and How to Protect Your Money Now. Retrieved
July 10, 2017, from https://www.gobankingrates.com/making-money/economy/causes-
inflation-effects-inflation-matter/.com
6) Zoleta, V. (2018, May 29). Beat Inflation: Tips to Maintain Your Household Budget Amid Price
Hikes. Retrieved from https://www.moneymax.ph/blog/beat-inflation-budgeting-tips.com
7) Manan, C. (2018, September 5). Philippines Inflation Rate. Retrieved from
https://tradingeconomics.com/philippines/inflation-cpi.
8) Black, B. (2012, November 29). Inflation in the Philippines [Web log post]. Retrieved from
http://brianblackeco.weebly.com/effects.html.
 CRITERIA EXEMPLARY SATISFACTORY DEVELOPING BEGINNING RATING
(5) (4) (3) (2)
Content (50%) The authors The authors The author's The author’s
main position main position is main position position is
is clearly clearly stated is stated but is unclear and
stated , and it although some not very clear. the
is supported supporting The paper also supporting
by substantial details need to lacks in details are
facts and be improved substantial either
arguments supporting irrelevant or
ideas not present at
all.
Mechanics conventions few errors in several errors too many
(25%) are strictly grammar or in grammar error in
followed mechanics mechanics grammar
mechanics
Organization effective flow effective flow of choppy no principle of
(25%) of ideas ideas with a few presentation organization
stray details of ideas is followed