INFLATION RATE which is conducted every three years by the

National Statistics Office (NSO).

 the rate of increase in the weighted average
 Captures the changes in the cost of living
prices of goods and services typically purchased
based on the movements of the prices of
by consumers
items in the basket of commodities and
FORMULA: services consumed by the typical Filipino
household.

2. Core Inflation
 Measures the change in average consumer
prices after excluding from the CPI certain
CAUSES OF INFLATION items with volatile price movements.
 Allows us to see the broad underlying trend
1. Demand-Pull Inflation in consumer prices
- Spending increases faster than  Often used as an indicator of the long-term
production. inflation trend and as an indicator of future
2. Cost-Price Inflation inflation. It is usually affected by the amount
- Prices rise because of a rise in per-unit of money in the economy relative to
production costs (Unit cost = total input production, or by monetary policy.
cost/units of output).
3. Profit-Push Inflation EXCLUDED IN ITEMS FOR CORE INFLATION
- Prices rise due to higher mark-ups.  Rice (8.9 percent)
EFFECTS OF INFLATION  Corn (0.7 percent)
1. Redistributive Effects  Meat, fresh, chilled or frozen (4.9 percent)
a. Losers during Inflationary Times
 Fruit, fresh (1.5 percent)
i. Fixed income earners
ii. Savers  Vegetables, cultivated for their roots, fresh or
iii. Creditors dried (0.6 percent)
b. Gainer during Inflationary Times
 Vegetables, cultivated for their fruit, fresh or
i. Debtors dried (1.2 percent)
ii.
2. Menu Costs  Natural gas, liquefied or in a gaseous state (1.5
3. Shoe Leather percent)
4. Confusion and Inconvenience  Gas oils for motor vehicles (0.7 percent)
HEADLINE vs CORE INFLATION

1. Headline Inflation

 The rate of change in the CPI, a measure of

the average price of a standard “basket” of
goods and services consumed by a typical
family.
 In the Philippines, the CPI basket is
composed of various consumer items as
determined by the nationwide Family
Income and Expenditure Survey (FIES),

1
UNEMPLOYMENT RATE B. Structural Unemployment - It is due to
changes in the structure of demand for
 The proportion of the labor force who are
labor.
unemployed, currently available for work and
seeking for work. C. Cyclical Unemployment - It is caused by the
recession phase of the business cycle
FORMULA:
2) Avoidable Unemployment - associated with
insufficient demand for workers caused by many factors
such as poor performance of the economy.

NSCB Resolution No.15

Series of 2004
The unemployed include all persons who are 15 years old
and over as of their last birthday and are reported as:
1. Without work, i.e., had no job or business
during the basic survey reference period; AND
2. Currently available for work , i.e., were
available and willing to take up work in paid employment
or self-employment during the basic survey reference
period, and/or would be available and willing to take up
work in paid employment or self-employment within two
weeks after the interview date; AND
UNDEREMPLOYMENT - current working but seeking
additional hours of work: In his current work/or in
another work/ or longer working hours in a different
work.
1) Visibly Unemployed - working less than 40 hours
per week.
2) Invisibly Unemployed - working at least 40 hours
a week.

3. Seeking work, i.e., had taken specific steps to

look for a job or establish a business during the basic
survey reference period; OR not seeking work due to the
following reasons: (a) tired/believe no work available,
i.e., the discouraged workers who looked for work within
the last six months prior to the interview date; (b)
awaiting results of previous job application; (c)
temporary illness/disability; (d) bad weather; and (e)
waiting for rehire/job recall.

LABOR FORCE

 All persons 15 years old and over as of their

last birthday who contribute to the
production of goods and services in the
country either employed or unemployed.

TWO TYPES OF UNEMPLOYMENT – Unavoidable and

Avoidable

1) Unavoidable
A. Frictional Unemployment - consists of those
searching for jobs or waiting to take jobs
soon.
2