This study source was downloaded by 100000844222360 from CourseHero com on 08 13 2022 06 32 39 GMT 05 00 https www coursehero com file 72764976 POSITION PAPERdocx position paperInflation rate as described in economics is an increase of the price levels ofgoods and services in an economy over a period of time As stated by FocusEconomics 2018 it refers to the overall increase in the Consumer Price Index CPI which is aweighted average of prices for different goods The index is composed of differentcommodities thats why not all goods would have a price increase but it will bedepending on the country s consumption habits Inflation rate is basically the rise of theprices of common good and services in a particular country In the Philippines the rateof the inflation is higher compared to its previous years as part of the TRAIN law beingproposed by President Rodrigo Duterte TRAIN law also known as Tax Reform forAcceleration and Inclusion law is the process of removing tax from the income ofminimum wage earners in exchange of increasing the prices of common goods andservices which is referred to as the inflation rate But we will not be focusing in TRAINlaw but the inflation rate in the Philippines The government s target inflation rate is 4 but it reached 6 4 which simplyshows how fast prices are rising in just a span of one year Philippines is now thehighest among ASEAN countries According to Social Weather Stations the socialresearch institution in the Philippines 70 of the Filipinos said that they are kapos because of the inflation rate and that only 6 of Filipinos approved the government shandling about the current inflation rate for the reason that the savings in their bank kepton reducing President Rodrigo Duterte is now aware that the inflation rate in ourcountry is higher than expected and he stated that they are having their cabinet meetingregarding this matter Inflation is not bad at all as a matter of fact government wants it it s just that we Filipinos are experiencing hyperinflation or when the prices of goodsand services rise The government says that the increase of prices in the economy of thePhilippines should be taken positively as it is a sign of a fast growing economy NationalEconomic and Development Authority NEDA Director General Ernesto Pernia said inan episode of GMA network s Brigada Normal talaga ang pagtaas ng mga bilihin When the economy is growing especially when it s growing fast talaga may inflationeffect kasi mas mabilis ang pagtaas ng demand kesa supply It will take time for supplyto adjust 2018 As Director General Ernesto Pernia stated the price increase isnormal When the economy is growing especially when it is growing fast there is aninflation effect because the demand increase faster than supply It will take time forsupply to adjust This means that a fast paced economy has consumers demanding formore supply The inflation rate is said to have a good impact on the Philippines because it isan indicator of a growing economy However to most consumers it is a source offrustration As stated by Viola H 2018 in PhilStar Global a large percentage ofrespondents of their recent survey was Filipino adults and most of them have disagreedto the price increase of their electricity bill This study source was downloaded by 100000844222360 from CourseHero com on 08 13 2022 06 32 39 GMT 05 00 https www coursehero com file 72764976 POSITION PAPERdocx Above all inflation rate has a negative impact to the Philippines First theinflation rate does not consider families living under the poverty line With the rise on theprices of products and goods the income and budget of the country must adjust tothese changes Families living in the middle and higher class has little to no impact ontheir budget and income Therefore they can just adjust easily to the price change However the inflation rate has a much bigger impact on the budget of families whobelong in the lower class in our country It will be harder for them to adjust and cope upwith the rise of the prices in the Philippines As said by Dean Dennis Mapa of Universityof the Philippines School of Statistics Higher prices particularly higher food prices aswhat we are seeing now hurts the poor households more since 60 percent of theirbudget is spent on food During periods when inflation rates are high example in 2009 poverty incidence did not decrease significantly from 2006 Second the inflation rate just makes Filipinos poorer because they would have ahard time living on a daily basis with goods at a higher price knowing that most of us arethrifty We all know that much of the population of the country is in the middle class lessin the lower class and only a few in the upper class Though the middle class hashigher budgets and income compared to the lower class eventually they would have ahard time adjusting to the price increase It is still a pain for them because they have tocut up some funds for their savings Just like what Rep Michael Romero of party listgroup 1 Pacman an economist said Last month s inflation rate of 5 7 percent thehighest in more than five years might have increased our poverty level from 23 percentof the population to 25 percent or nearly three out of 10 Filipinos 2018 Lastly the spending power of the Filipinos will also decrease for the very obviousreason that the prices are increasing Filipinos would try to switch to much cheaperproducts as substitutes because of the price increase As we all know we are a third world country so it was really a hard time experiencing the inflation that s beenhappening this 2018 As Lema K 2018 has stated Raul Rivera who works in agrocery store the size of a garage in Santa Rosa Those who were buying five cannedgoods before are now only buying three and those who were buying 25 kilos of rice arebuying just 15 or 10 kilos now Raul Rivera s customers are buying less because of theprice increase brought by the inflation rate The government is now aware that the inflation that s been happening in thePhilippines has a negative effect on them so the socioeconomic planning secretary Ernesto Pernia said that the inflation rate will ease down from 6 4 to 2 4 which isthe government s target inflation rate by 2019 Filipino families can finally ease upbecause of the inflation decrease It is good to know that the Duterte Administration ismaking an action towards this matter because most of the families were clearly affected REFERENCESLopa M 2015 January 6 How does inflation affect the