San Jose Community High School

Senior High School

The Impact of Inflation in Academic Performance of Grade 11 Students of

San Jose Community High School

NAMES:
Althea Kim C. Celeste
Teironz Miltar
Jasmine Kaye M. Refama

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Senior High School

CHAPTER 1: The Problem and Its Background

INTRODUCTION

Background of the study

The Philippine Statistics Authority (PSA) reports that inflation in the Philippines
continued its upward trend, reaching 7.7 percent in October 2022, up from 6.9 percent in
September 2022. This is the highest inflation rate recorded since December 2008. The
average inflation rate from January to October 2022 stood at 5.4 percent, compared to
4.0 percent in October 2021. Recent estimates from the Bangko Sentral ng Pilipinas
(BSP) suggest that inflation will average 5.4% for the year 2022-2023, higher than the
previous estimate of 5.0% announced in June 23. Inflation is defined as the rate of
increase in prices over a given period of time, and it represents how much more
expensive a set of goods and/or services has become over a certain period, typically a
year. Inflation is a crucial indicator of the economy, and efforts are made to keep it low
and stable to prevent weakening purchasing power and reducing national income.

Inflation is the measure of the percentage change in the price of goods and
services, such as food and transportation passes. It is calculated by experts who
analyze the cost increase of key items regularly purchased, like bread, to determine the
overall inflation rate. Inflation can stem from various factors, including cost-push
inflation, demand-pull inflation, and monetary inflation. The Republic of the Philippines
has experienced high and unstable inflation rates, with the annual inflation rate
reaching 6.7 percent in October 2018, higher than market expectations. This rise was
driven by increased costs of housing and transportation, offsetting slight price
slowdowns in food. Overall, the Philippines has historically experienced varying levels of
inflation, with rates fluctuating between gradual increases and sharp spikes since 1958.

The inflation forecast for 2024 hovers around 4 or 4.2 percent, close to the
target range, but supply shocks, notably affecting rice imports due to factors like El
Niño, pose significant risks to this projection. In 2023, average inflation stood at 6
percent, with rice inflation surging to 19.6 percent in December, marking the highest
level since March 2009. Managing supply shocks is deemed crucial to mitigate the
impact on expectations and prevent secondary effects on commodity and service

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prices. Despite a recent easing of headline inflation, the central bank is cautious about
implementing interest rate cuts in the first half of 2024, awaiting more favorable inflation
trends. The central bank chief reiterates that rate cuts are unlikely until inflation
stabilizes on a more favorable trajectory.

Inflation refers to the general increase in prices of goods and services over time,
reducing the purchasing power of consumers and businesses. This means that the
value of money decreases, leading to higher costs for commonly consumed items.
Inflation affects both consumers and businesses, as rising prices for intermediate and
finished goods can erode profit margins. To mitigate the impact of inflation, businesses
often raise their prices, which consumers generally accept. However, finding a balance
between covering rising input costs and maintaining demand is a challenge for many
companies. Inflation can be driven by demand exceeding supply (pull inflation) or by
rising input costs leading to higher prices (cost-push inflation). For example, during the
COVID-19 pandemic, demand for new cars surged while semiconductor shortages
limited supply, causing prices to increase. Similarly, cost-push inflation occurs when
rising input costs, such as commodity prices, lead to higher prices for final goods and
services across industries. In response, businesses must adjust their pricing strategies to
manage inflation and minimize its impact on financial performance.

Inflation, the gradual increase in prices of goods and services over time,
diminishes the purchasing power of both consumers and businesses. This
phenomenon means that the value of money decreases, making everyday items more
expensive. While inflation primarily affects consumers by reducing their ability to buy
goods and services, it also impacts businesses. As the costs of raw materials,
intermediate products, and finished goods rise, companies face pressure on their profit
margins. To counteract these effects, businesses often raise prices on their products
and services. However, striking the right balance between covering rising costs and
maintaining consumer demand can be challenging. Inflation can be driven by two main
factors: pull inflation and cost-push inflation. Pull inflation occurs when demand for
goods and services outpaces supply, leading to price increases. For instance, during
the COVID-19 pandemic, a surge in demand for cars coupled with semiconductor
shortages caused prices to rise. Conversely, cost-push inflation results from increases in
input costs, such as commodities, leading to higher prices for final goods and services.
During the pandemic, rapid shifts in demand, consumer behavior, and input costs
caused commodity prices to surge across various industries, prompting businesses to
raise prices to offset these costs and maintain profitability.

The inflation rate in March 2022 surged to more than double the rate recorded in
March 2021, marking a significant increase of 5.5 percentage points. This jump
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represents the largest rise in the Consumer Price Index (CPI) over any 12-month
period since January 2019. The overall increase in inflation can be attributed to the
effects of COVID-19 lockdowns in 2020 and 2021, as well as recent spikes in food and
energy costs. The outbreak of the war in Ukraine in February 2022 further exacerbated
inflationary pressures, causing global markets to experience significant shocks. These
disruptions have impacted global trade, production, and consumption patterns, likely
contributing to sustained high prices in the foreseeable future.

Statement of the Problem

1. what is the effect of the price increase on students and their parents?

2. what are the possible and negative effects of the price increase on students and

their parents?

Significance of the Study

Financial constraints can be a major challenge to scientists striving for breakthroughs in
research. Budget cuts, a harsh reality, can hinder the progress of projects and
compromise the quality of research outcomes. However, researchers can navigate
these hurdles by adopting practical and innovative strategies that maximises
productivity while operating within tight financial boundaries.

Scope and Delimitation

The research will focus specifically on Grade 11 Students from San Jose Community
High School

The study will consider academic performance based on quantitative measures such as
grades, test scores, and completion rates.

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The research will explore various aspects of increasing the price on bakers,researchers
should explore alternative methodologies and repurpose existing equipment creatively.
By developing clever strategies, they can save more money and design novel situation
and dicoveries that can potentially solve pressing issues.

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San Jose Community High School
Senior High School