INFLATION IN LEGAZPI CITY

CASE STUDY

PREPARED BY:
RAFAEL VINCENT M. ALCALA
BSA-1
INTRODUCTION

 The inflation rate has steadily risen since the beginning of the year. The
year-on-year average rate of price increases from Jan. to July (this year)
was 4.5%. The annual inflation rate rose gradually but persistently from
a low of 3.2% in Jan. to 5.7% by July. The august annual inflation rate
had further risen to 6.7%.
 The rising prices are felt generally across sectors of the problems of the
most vulnerable, the poor and those whose incomes are not catching
up with inflation.
PRICE OF RICE

Rice
50 49
47 45 47 45
50 43 41

40

30

20

10

0
Rice Special Rice Premium Rice Well Milled Rice Regular Milled
Jul-18 Aug-18
What causes Rice inflation?

 High farm-gate price due to shortfall in production

 Depletion of govt. stocks due to faulty economic
policy decisions
 Anti-farmer policies
 High aggregate demand
Rice inflation consequences

 Reverse gains in poverty reduction

 Hunger mitigation
Alternative Solutions

 Importation of Rice to fill in the it’s lack of supply

 Irrigation
 Technology extension esp. to local agricultural
technologists
 Fully mechanize farming to boost production
 Increase public investment in agriculture
PRICE OF PETROLEUM
PRODUCTS

Petroleum Products
58.8 59.75
55.95 58.2 55.45 56.5
60
44.45 45.95 46.9 48.7
50

40

30

20

10

0
Gasoline (RON97) Gasoline (RON95) Gasoline (RON91) Diesel Diesel Plus
Aug-18 Sep-18
What causes inflation in
Petroleum products?
 Peso Depreciation from ₱53.00 (Jul. 2018) to ₱53.40 (Aug. 2018)
 Oil prices increase by 60% from $47.00 (end-2017) to $ 76.00 (current-
2018) per barrel.
 Higher tariffs in American foreign trade policy
 TRAIN accounted only for 1.1% of the 6.4%
 High aggregate demand
Inflation in Petroleum
products consequences
Alternative Solutions
PRICE OF PRIME
COMMODITIES

Meat
320 320
350
300 240 240
250
200 145 150
150
100
50 5.5 5.5

0
Beef Pork Chicken Poultry Egg
Jul-18 Aug-18
PRICE OF PRIME
COMMODITIES

Fish
160
150
140
160 130 130
120
140
120
100
80
60
40
20
0
Bangus Galunggong Tilapia
Jul-18 Aug-18
PRICE OF PRIME
COMMODITIES

Vegetables
140
140 120
120 100 100 100
100 80 80
70
80
60
40
20
0
Ampalaya Cabbage Carrots Eggplant
Jul-18 Aug-18
What causes Inflation in
Prime Commodities?
Inflation in Prime
Commodities consequences
Alternative Solutions
Demand-Supply Relationship

Rice
5
4.5
4
3.5
3 Demand
2.5 Supply

2
1.5
1
0.5
0
1 2
Demand-Supply Relationship

Petroleum Products
5
4.5
4
3.5
3 Demand
2.5 Supply
2
1.5
1
0.5
0
1 2
Demand-Supply Relationship

Prime Commodities
5
4.5
4
3.5
3 Demand
Supply
2.5
2
1.5
1
0.5
0
1 2
CONCLUSION