INFLATION

Concept Paper

In economics, the inflation rate is the measurement of inflation, the rate of

increase of a price index. It is the percentage rate of change-in prices level overtime.
The rate of decrease in the purchasing power of money is approximately. Inflation is a
general and ongoing rise in the level of prices in an entire economy. Inflation does not
refer to a change in relative prices. Inflation, on the other hand, means that there is
pressure for prices to rise in most markets in the economy. Inflation has consequences
for people and firms throughout the economy, in their role as lenders and borrowers,
wage earners, tax payers, consumers.

Inflation is one of the major problems in the country of the Philippines, thus
making it difficult for the people (including poor people) to buy products and foods
because of high prices but on the other hand it also helps the economical growth of the
country. The purpose why we chose this topic or concept is because as a student we
also find it difficult for us to buy things like foods and school supplies especially for the
consumers who have not receive salary increases, the effect of this is that people have
to constantly get raise to keep up with the prices of goods. According to our research
we found out the differences of inflation rate from 2012 to 2021, (2012-3.17%, 2013-
2.93%, 2014-4.17%, 2015-1.41%, 2016-1.78%, 2017-3.18%, 2018-4.17%, 2019-3.83%,
2020-3.34%, 2021-3.09%). This concept will still be durable because inflation rate does
not only work in the summer, Christmas time or holidays, Inflation can happen anytime
and anywhere. Inflation expectations matter because they change how people behave.
It’s in government’s interest to manage this expectation from time to time. The products
that are affected of high inflation in the Philippines are the Oil Prices, weak peso and
foods. Oil prices is one of the affected of high inflation rate because they are at the
mercy of global oil price movements determined largely by supply and demand. One
possible reason is that the Philippines is one of the biggest net importers of oil in
ASEAN. Weak peso is also affected by high inflation rate, as of September 5 the peso
closed at 53.5 pesos per 1 US dollar, the lowest it’s been in 12.2 years. The peso is
also one of the weakest currency in ASEAN today, because we pay imports in foreign
currencies, a weaker peso necessarily makes imports costlier. As such, oil becomes
costlier too, as well as all the other goods and services in the economy that rely on it.

As a final statement inflation is a good and bad situation. It can be bad for the
people but it’s good for the economy. There is a bad situation in inflation because this
highly affects the consumers and this makes it easy for them to lose money and savings
however inflation is not that bad too in fact the government wants inflation, but only
within an acceptable range. Revising monetary and trade policies, as well as providing
subsidies to the poor, are only some of the ways by which the government can restrain
inflation within the acceptable range.

THE END OF THE CONCEPT PAPER

INFLATION
Concept Paper

Group Members:
Lance Jewel Javier
Mark Angelo Martinez
Angelica Victoria Jordan Nalog

2018