Saint Anthony College of Technology

College Department

“ Effects Of Inflation To The Vendors And Consumers ”

Submitted By:

Sulam, Sheena M.

(sulamsheena2@gmail.com)

Aurelio, Jeizelle S.

(Jeizelleaurelio5@gmail.com)

Balagot, Keithleen G.

(keithlyn0226@gmail.com)

Catap, Alvi Shaine V.

(catapalvinshaine@gmail.com)

Ho, Kresha Camille C.

A Thermal Paper Submitted To:

Dr. Sofia S. Fulminar

March 2024
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ABSTRACT
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TABLE OF CONTENTS

I. Preliminaries Page
ABSTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V

STATEMENT OF THE PROBLEM. . . . . . . . . . . . . . . .. . . . VI

METHODOLOGY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RESULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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“Effects Of Inflation To The Vendors And Consumers”

INTRODUCTION

Inflation is viewed as "the evil in the society," defined as a progressive

increase in the prices of goods and services within an economy. As inflation

continues to rise, the market value of the country's commodities and services

falls. In 2018, the Philippines has the highest inflation rate of the ten (10)

Southeast Asian countries. (Mukoka, S. 2018) The country's economic growth

is at risk due to the continuous rise in inflation. The unpredictable inflation

rate of a country leads to changing prices and market value. This issue affects

the country’s gross domestic product and may result in an inactive trading

game and a slow growth rate of the economy.

According to (Mapa C. 2023) The supply, demand, and government

spending are the primary sources of inflation across all markets. Prices

increase because "demand-pull" inflation is when an economy's total inflation

rate increases faster than the rate at which demand increases demand for

commodities. The same holds true when the government spending exceeds

economic growth, a condition called as "Cost-push" inflation occurs. Cost-

push inflation frequently happens when Governments invest in initiatives or

programs to boost their economies require additional revenue from taxes or

other sources to cover them. Similarly, prices rise when there a large quantity
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of money in circulation (sometimes Referred to as "monetary oversupply")

since there is more rivalry between buyers for scarce resources.

(Mapa, N. 2023) Supply-side variables have played a significant role in

the Philippine inflation history. Local rice production cannot fulfill demand,

hence the country needs import rice from adjacent countries. With rice weight

accounting for 9.6% of the CPI basket, this may be impacted by crop losses

caused by Storms or inclement weather. It could become a worry if rice

supply conditions may tighten significantly in the coming months. The

Philippines not only relies on imported rice but also imports energy for power

generation and transportation. Higher global energy prices are also observed

in Philippines owing to Ukraine and production cuts. With 13.5% of power

generation is coming from oil-based power plants, this development should

ultimately increase electricity bills and transportation costs.

(Esmael, L. 2023) The Philippines, a tropical country, tends to be

affected by irregular weather changes; as a result, prices in the Philippines

rose to even higher levels. They consider the lives of the hungry, who have

suffered the most as they struggle to get food to survive. Fuel inflation causes

commuters to spend money on travel expenses instead of other purchases and

also affects the transportation of goods, resulting in delayed cash flows. In

addition, climate change is an important factor. Due to its geographical

location, the Philippines is prone to extreme weather events.

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According to (Mr Si Guo, Mr Philippe D Karam, Mr Jan Vlcek International

Monetary Fund, 2019) Inflation rates rose sharply in the Philippines during

2018. Understanding the demand and supply sources of inflation pressures is

key to monetary policy response. According to Philippine Statistics Authority

(PSA) Inflation in the Philippines can affect various individuals, sectors, and

branches of the economy. The persons affected by inflation rates in the

Philippines include consumers, particularly those with low incomes who may

struggle to afford necessities as prices rise.

(Cliff, B. 2023) Both domestic and external factors have driven

inflation in the Philippines. One of the key domestic factors is the rising cost

of food, particularly agricultural products. This has been attributed to a

combination of factors, including the impact of climate change on crop yields,

the rising cost of inputs such as fertilizers and pesticides, and the effects of

government policies, such as implementing the Rice Tariffication Law in

2019. (Sicat, G. P. 2022) says that economic growth is when aggregate

consumption demand can be in some form unbalanced with production

growth, which is basically the level of supply. While this imbalance is not

great, the process of growth and development is sustainable and within the

limits of relative price stability.

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STATEMENT OF THE PROBLEM (SOP’S)

1.) How does inflation affect the small business of the vendors and

consumers?

2.) How does inflation affect the vendors and consumers cost of

living?

3.) What are the coping mechanisms employed by vendors to mitigate

the adverse effects of inflation on their businesses?

4.) How do inflationary trends affect the financial stability of small

vendors and large companies?

DEFINITION OF TERMS

Demand-Pull Inflation. is when there is an increase in aggregate demand,

and the supply remains the same or decreases. When supply cannot meet

growing demand, prices for goods and services are pulled higher.
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Cost-Pull inflation. is when the cost of goods and services rise. This happens

because people have more money to spend in the economy. This changes what

they want to buy. Suppliers see this increase in demand, so they try to get

more out of their products.

Adjacent. lying next or near : having a border or point in common. a field

adjacent to the road. 2. : having a vertex or a vertex and side in common.

Tarrification. A process that converts non-tariff barriers into tariffs, which

are considered to be more transparent than non-tariff barriers and are subject

to negotiation downwards. It does not apply to primary agricultural products

unless they are designated as subject to special conditions.

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METHODOLOGY

This section will act as the study's cornerstone since it will provide

information to help people and administrators come up with ideas for

improving economic stability and reducing the negative consequences of

inflation. In order to enhance their understanding of the study, the researchers

will employ a qualitative method of inquiry. Researchers will focus on Effects

of inflation to the vendors and consumers. Qualitative research entails

gathering and evaluating non-numerical data to comprehend ideas, views, or

experiences. It can be applied to get comprehensive understanding of a

situation or to come up with fresh research concepts (Pritha, 2020). The

respondents of the study are the vendors and consumers in Pampanga. The

respondents will be interviewed regardless of their gender and age. The study

will only conduct data gathering that have knowledge about Inflation.

In this study, the researchers will be using unstructured questionnaire to gather

data from the respondents. The unstructured questionnaire is a set of orderly

arranged questions to be answered by the research respondents. The first

question will be about the profile of the respondent after that the questions will

be open-ended that will guide the respondent to answer the research problem

and question. The researcher will use formulated unstructured questionnaire in

gathering the needed information in the study.

In gathering the data researcher will first formulate questions that will be

validated by the research facilitator of this study. After that the researcher will

do an online interview. During the interview the researchers will ask for some
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personal information about the respondents and promise not to disclose any

sensitive information provided by respondents. During the interview the

researchers will listen to the respondent and will not oppose the statements of

the respondents.

In this study, the researchers will ensure that the respondent’s potential ethical

issues of anonymity, confidentiality, and informed consent are protected.

Before the interview the researchers will ask the respondent wants to be

documented during the interview. During the interview the researcher will

listen to the respondents with all ears and heart and will not give any opinion

about the experiences of the respondents. Lastly, the researchers will enhance

the research validity and academic integrity.

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RESULT

1. The First respondent clearly demonstrated a conscious understanding

of the impact of inflation in their rice sales enterprise. They point out

that the trend is showing a noteworthy elastic behavior with rice, which

had been going down, now is sharply up in cost. This steep rise has

been rather noticeable in their purchasing practices, for now they go

for buying smaller amounts of rice as its prices have just risen. This

emphasizes the rice market response to inflation, as well as the

consequence on both supply and demand.

2. The respondent in the second sentence brings out the point that just as

usual, the investor has always had a market investment amount of 40

or 50 thousand but has now increased it to hundreds of thousands or

more. There is an obvious frustration in the tone of their speech, they

are talking about the substantial increase in prices which means that

what used to lead cost to 50 pesos now requires 150 pesos. The

interviewee is out of breath constantly at the skyrocketing prices and

also narrates a sentimental opinion about the current pricing dynamics.

The education budget is another area that has been affected as the

respondent talks about the burden that is now on families. When the

respondent experienced increase in enrollment but could not afford

his/her child's education, particularly after complete training (OJT)

lacks the money to enroll in school. The situation is being worsened

by additional factors, which include the upcoming danger of

foreclosure from the stall. The answerer talks about the future, and
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they raise concerns specifically on November 15, placing accent on the

necessity of finding an answer. The difficulty elevates when they tell

about how enrolling child becomes impossible when there is

uncertainty about the market stability.

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CONCLUSION
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References

Cliff, V (2023, February 7). Philippine inflation hit 14-year high of 8.7% in

January. Nikkei Asia https://asia.nikkei.com/Economy/Inflation/Philippine-

inflation-hit-14-year-high-of-8.7-in-January

Esmael, L. (2023, September 5). Inflation up anew due to recent

typhoons, oil price hikes.

https://www.cnnphilippines.com/business/2023/9/5/inflation-

august.html?fbclid=IwAR2an2t4wp2_AsXNkES1HXGMPTlMQNaQoy

6wTnp84H9mJLJXqDWHOpFGmog

Mukoka, S. (2018, May 16). An Econometric Assessment of the impact

of inflation on Economic growth: A case study of Zimbabwe Economy.

Economics, 7(1), 17.

https://www.sciencepublishinggroup.com/journal/paperinfo?journalid=

177&doi=10.11648/j.eco.20180701.1

Mapa, C. (2023, November 7). Summary Inflation Report Consumer

Price Index (2018=100): October 2023. Philippine Statistics Authority

Mapa, N. (2023, August 29). Rising rice and energy prices in the

Philippines fuel inflation concerns. ING Think.

https://think.ing.com/articles/rising-rice-energy-prices-in-philippines-

fuel-inflation-concern

Sicat, G. P. (2022, August 16). Philippines inflation and the economy.

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Philstar.com

https://www.google.com/amp/s/www.philstar.com/business/2022/08/17/2

203097/philippines-inflation-and-economy/amp