ECONOMIC RESILIENCE AND CONSUMER CHOICES ; A STUDY ON INFLATIONS

INFLUENCE IN THE PHILIPPINES

BUOG, REGGIE NICOLE VON

DACUT, CARYLLE
DENIEGA, ANGELO JOEMAR
DIONELA, KIRSTEN MOIRA
ESTEVA, DANELA
SALAC, JOUSHEEN LY
INTRODUCTION

In the ever-changing global economy, countries frequently face difficulties that affect the
financial welfare of their population. One such difficulty is inflation, a condition that impacts a
nation's overall economic resiliency and consumer purchasing power. This research explores
the complex relationship between consumer choices and economic resilience, concentrating on
the impact of inflation within the Philippine setting. As a developing country, the Philippines has
experienced significant economic changes recently. Given the growing population and diverse
economic landscape, Policymakers and businesses must comprehend the subtle consequences
of inflation on consumer behavior. This study aims to further enhance the current corpus of
knowledge by examining how inflationary pressures influence consumer preferences and, in
turn, affect the Philippines' economic adaptability.

BACKGROUND OF THE STUDY

Economic resilience has emerged as a priority in response to the devastating impacts of recent

system-wide crises, particularly the Global Financial Crisis (GFC) of 2007-2009 and the 2020

COVID-19 crisis, both of which will continue to leave lasting scars on our economies and

societies. The fallout from the GFC hit the poorest hardest, contributing to an extensive erosion

of public trust in global economic governance. The COVID-19 crisis has brought unprecedented

impacts in peacetime, such as inflation, and consumer interest and with many countries putting

entire sectors of their economy “on hold” to contain the spread of the virus, necessitating, in

turn, a more prominent role for the state. Tests of economic resilience have come -- and will

continue to come -- in many forms. Some may be challenging to predict; others, such as the

impacts of climate change, are well-documented and already bringing severe effects. The

lessons from COVID-19 and other crises show that we need resilient economies and societies

and markets, not just resilient financial sectors (Jarrett & Serres, 2021).
The relevance of responsible market practices to strengthen economic resilience has been

verified empirically through the COVID-19 crisis. Recently, a study conducted between January

and June 2020 using a sample of 1 597 listed firms in China concluded that companies with

higher corporate social responsibility (CSR) performance before the shock experienced fewer

losses and took a shorter time to recover (Huang et al, 2020).

The impact of inflation on consumers' purchasing power in the Philippines has been

underlined in recent publications from Bangko Sentral ng Pilipinas (BSP), the country's

central bank. The BSP's release on the Consumer Expectations Survey is crucial for

comprehending consumer attitudes and expectations during inflationary times (BSP,

2023). In addition, headline inflation in the Philippines increased to 6.1 percent in

September 2023, up from 5.3 percent in August 2023. The rise in overall inflation was

primarily driven by significant increases in the prices of food and non-alcoholic

beverages, particularly a jump from 8.1 percent to 9.7 percent. (PSA, 2023)

Consumer behavior, including preferences, buying patterns, and financial resiliency,

has changed in the post-pandemic age. This study will examine these changes in the

context of the Philippines and look at how inflation may have influenced them. In order

to develop methods for fostering economic resilience and educated consumer choices,

politicians, corporations, and individuals must have a thorough understanding of how

consumers respond to inflation.

RESEARCH QUESTIONS
- BUOG

This study explores the complex relationship between inflation, consumer behavior, and
economic resilience by reviewing existing research on the effects of inflation on consumer
decisions, and historical inflationary patterns in the Philippines. The objective is to advance our
knowledge of economic dynamics in comparable contexts worldwide and provide insightful
information for decision-makers.

Research Question 1:

How does inflation affect consumer choices in the Philippines, and what are the implications for
economic resilience?

Research Question 2:

What role do government policies play in mitigating the impact of inflation on consumer choices
and fostering economic resilience in the Philippines?

Research Question 3:

To what extent do historical inflationary patterns in the Philippines contribute to or challenge the
country's economic resilience?

OBJECTIVES

The main objective of the study "Economic Resilience and Consumer Choices: A
Study on Inflation's Influence in the Philippines" is to assess and analyze how inflation
affects the economic resilience of people and households in the country, focusing on
consumer choices. The study seeks to accomplish several goals, including:

1. Analyze how Inflation Affects Household Budgets: Examine how changes in

the inflation rate impact how affordable essential goods and services are for
 Filipino households. It involves evaluating the effects on consumer spending
power and the cost of living.
2. Analyze Consumer Behavior During Inflationary Periods: Look into how Filipino
consumers modify their purchasing habits, consumption preferences, and
monetary choices in reaction to growing inflation. It could entail adjustments to
spending priorities, saving routines, and investment preferences.
3. Dissemination of Findings: To inform decision-makers, businesses, and the
general public about the study's conclusions and ramifications, communicate the
research findings through reports, scholarly publications, and presentations.

1.
- DENIEGA

SCOPE AND LIMITATIONS

The study aims to investigate the relationship between inflation and consumer

decisions in the geographical context of the Philippines. The study will look at previous

inflation trends and patterns. Investigate how inflation influences consumer behavior,

such as changes in consumption, savings, and investment decisions. The study will

examine how individuals and households in the Philippines adapt to and manage

inflation, emphasizing economic resilience methods such as income diversification and

financial planning. Furthermore, the study will provide insights into prospective policy

initiatives that can improve economic resilience and reduce the adverse effects of

inflation on consumer choices.

The time allocated for research and data gathering will limit the study. Because

economic conditions and consumer behavior vary over time, the data may not

accurately reflect the most recent trends. The study will primarily focus on a national-

level investigation, and variations in inflation's impact and consumer choices may be

partially reflected due to the Philippines' different regional characteristics. The available
data sources will determine the study, which may have data quality and coverage

limitations. It may have an impact on the analysis's accuracy and comprehensiveness.

The study's primary focus will be on the impact of inflation on consumer

decisions. It may, however, not account for other external factors such as changes in

government laws, global economic situations, and social or cultural influences, all of

which can influence consumer behavior.

SIGNIFICANCE
- SALAC

The study on economic resilience and consumer choices in the Philippines is

significant for a number of reasons. First, it provides insights into how inflation impacts
consumer choices in the Philippines. This information is valuable for policymakers and
businesses, as it can help them to develop policies and strategies to mitigate the
negative effects of inflation on consumers and the economy.Second, the study
highlights the importance of consumer choices in supporting economic resilience. This
information is valuable for consumers, as it can help them to make more informed
spending choices that support the economy.Third, the study provides recommendations
for the Philippine government and consumers on how to build a more resilient economy.
These recommendations are based on the findings of the study and can be used to
inform policy making and consumer behavior.Overall, the study on economic resilience
and consumer choices in the Philippines is a significant contribution to the body of
knowledge on this topic. It provides valuable insights for policymakers, businesses, and
consumers on how to mitigate the negative effects of inflation and build a more resilient
economy.

Conclusion:
 In conclusion, the research on consumer choices and economic resilience in the

Philippines seeks to clarify the complex interplay among consumer behavior, inflation,

and the nation's overall economic flexibility. For governments, businesses, and

individuals to make educated decisions, they must comprehend the impact of inflation

on consumer choices, particularly in growing nations like ours that are confronted with

the demands of a dynamic global economy. The study focuses on the historical

background of inflation in the Philippines since it aims to evaluate the impact of previous

inflationary trends on the nation's economic resilience. This historical viewpoint offers

insightful information on the potential long-term consequences and difficulties of inflation

for the country's economic stability.

Furthermore, the study's goals are wide-ranging and include everything from

assessing how household budgets are affected by inflation to looking at changes in

consumer behavior during inflationary times. Sharing research outcomes with

enterprises, the public, and decision-makers is essential to encourage well-informed

activities and policies. Thus, is why the dissemination of findings is encouraged. espite

the study's importance, it's critical to recognize its limitations and breadth. While offering

in-depth insights into a particular setting, the regional concentration on the Philippines

might only partially capture the dynamics of the global economy. The study's

dependence on national-level research and historical data may restrict the conclusions'

regional nuance and real-time accuracy. To sum up, the study is essential for a range of

stakeholders since it provides information about how consumer choices are affected by

inflation and suggests strategies to improve economic resilience. This study adds

significant knowledge to the continuing conversation on economic dynamics, consumer

behavior, and policy issues in the Philippines by answering the stated research goals

and objectives.

REFERENCES

Huang et al (2020). Corporate Social Responsibility and Organizational Resilience to COVID-19

Crisis: An Empirical Study of Chinese Firms. MDPI. China.

Jarrett, N., & Pinaud, N. (2021) Fostering Economic Resilience in a World of Open and Integrated
Markets. Retrieved from https://www.oecd.org/newsroom/OECD-G7-Report-Fostering-Economic-
Resilience-in-a-World-of-Open-and-Integrated-Markets.pdf

Mapa, C. D. (2023, September 5). Philippine Statistics Authority | Republic of the Philippines.
Psa.gov.ph. https://psa.gov.ph/price-indices/cpi-ir

Bangko Sentral ng Pilipinas Media and Research - Consumer Expectations Survey. (n.d.).
Www.bsp.gov.ph.https://www.bsp.gov.ph/SitePages/MediaAndResearch/ConsumerExpectationSurv
ey.aspx

World Bank. (2021). Philippines Economic Update, April 2021: Inflation Expectations in an Uncertain
World. Retrieved from https://www.worldbank.org/en/country/philippines/publication/philippines-
economic-update-april-2021-inflation-expectations-in-an-uncertain-world

Balke, N. S., & Emery, K. M. (2019). Assessing the impact of inflation on consumer spending.
Economic Letters, 183, 108582.

Paler, L., & Johnson, P. (2014). Resilience in Filipino Family Relationships: Intergenerational
Solidarity and Ambivalence in Transnational Families. Journal of Family Issues, 35(4), 471-491.
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