BACKGROUND OF THE STUDY

Inflation is the rate of price increase over a given period. Inflation is sometimes quantified in
generic terms, such as the overall increase in prices or the increase in the cost of living
throughout a country. However, it may also be calculated more accurately for particular goods,
such as food, or for services, like a haircut. In any circumstance, inflation refers to how much
the relevant assortment of products and/or services has increased in price during a specific
period, usually a year.

The Philippines' annual inflation rate increased to 8.0% in November 2022 from 7.7% in
October, exceeding market expectations of 7.8% but staying within the range of 7.4% to 8.2%
set by the central bank for the month. With food prices increasing at their fastest rate since
March 2009 (10.0% compared. to 9.4% in October), it was the highest reading since November
2008. Housing costs (6.9% vs 7.4%), transportation (12.3% vs 12.5%), alcoholic beverages
(10.6% vs 10.4%), clothing (3.6% vs 3.1%), health (2.8% vs 2.6%), household maintenance
(4.5% vs 3.8%), communication (0.7% vs 0.5%), restaurant (6.5% vs 5.7%), recreation (3.3% vs
3.0%, and miscellaneous (4.2% vs 3.7%) all contributed to additional. Since December 2008,
core inflation, which excludes volatile food and fuel prices, has increased by 6.5% year over
year. Consumer prices increased by 0.9% yoy every month in November, matching their rate
from October, maintaining their sharpest rate since January 2009, and outpacing expectations
of 0.7%.

Inflation is a sustained increase in the general price level of goods and services in an
economy over a period of time. When the general price level rises, each unit of currency buys
fewer goods and services; consequently, inflation reflects a reduction in the purchasing power
per unit of money – a loss of real value in the medium of exchange and a unit of account within
the economy. The measure of inflation is the inflation rate, the annualized percentage change in
a general price index, usually the consumer price index, over time. (Sulzbach, 2019)

The effects of inflation are huge and it doesn’t just affect areas like our salaries and the cost
of purchasing a new home. Inflation hits us from every angle. Food prices go up, transportation
prices increase, gas prices rise, and the cost of various other goods and services skyrocket over
time. All of these factors make it absolutely essential that you account for the huge impacts that
inflation can have on your long-term savings. (Pat, 2018)

The overall price level continues to rise, the inflation rate is present. High inflation rates are
typically thought to be detrimental to an economy. High inflation rates can destroy the value of
savings and breed uncertainty. These are the variables that could have an impact on Cavite
State University's 2nd-year economic students, most notably the inflation increase in the cost of
education, including school and college fees, tuition, study materials, books, uniforms, and
medical tests, among other things, making it possible for less fortunate students to drop out of
school. Higher home and hotel rates will significantly impact significant impact students who rent
boarding houses. Students' minds may be severely damaged by inflation since they were
preoccupied with thoughts of money rather than their schoolwork. Another point is that these
days, only those with money will be able to complete their education.

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