SUBMITTED BY: RONAN CHESTER B.

MAESTRE 9-INNOVATION

A. 3 KINDS OF INFLATION

1. Demand-Pull Inflation

Demand-pull inflation describes how demand for goods and services can drive up their prices. If
something is in short supply, you can generally get people to pay more for it.

2. Cost-Push Inflation
Cost-push inflation often kicks in when demand-pull inflation is going strong. When raw
materials costs increase for businesses, the businesses in turn must raise their prices, regardless of
demand. Example, When the price of chicken keeps going up, for example, eventually your
favorite restaurant will need to charge more for a chicken sandwich.

3. Built-in Inflation
As demand-pull inflation and cost-push inflation occur, employees may start asking employers
for a raise. If employers don’t keep their wages competitive, they could end up with a labor
shortage. If a business raises workers’ wages or salaries and tries to maintain profit margins by
raising prices, that’s built-in inflation.

B. An article that describes the Inflation in the Philippines.

Philippine inflation rose to 8.7% in January

By: Ronnel W. Domingo - @inquirerdotnet Philippine Daily Inquirer, Reuters / 09:23 AM
February 07, 2023

Inflation in the Philippines went up even higher at 8.7 percent in January 2023, faster than 8.1
percent in December 2022 that was thought to have been the peak, according to the Philippine
Statistics Authority. National Statistician Dennis Mapa said the January headline print was the
fastest since 9.1 percent in November 2008. It was also almost thrice as fast as the 3 percent
recorded in January 2022 The latest overall readout was mainly driven by faster increases in
housing rentals, electricity and water rates as well as in the prices of vegetable, milk and eggs,
and fruits and nuts. Also, core inflation — which excludes selected food and energy items in the
headline inflation — rose to 7.4 percent in January from 6.9 percent in December. A year earlier,
in January 2022, core inflation was lower at 1.8 percent. The January inflation rate was way
above the 7.7 percent forecast in a Reuters’ poll. This keeps the pressure on the Philippine central
bank to  further tighten monetary policy. The Bangko Sentral ng Pilipinas,  which had forecast
the January Consumer Price Index  to be between 7.5 percent-8.3 percent, said on Saturday it will
 focus on inflation rather than the Federal Reserve’s 25-basis point hike when it meets on Feb. 16
to review key interest rates BSP Governor Felipe Medalla has previously signaled further interest
rates hikes at the central bank’s first two policy meetings this year to bring inflation back within a
target range of 2 percent to 4 percent. Elevated inflation, plus the need to maintain interest rate
differentials between the U.S. and the Philippines, have forced the central bank to embark on
aggressive tightening, with the benchmark rate rising by a total of 350 bps last year. Economic
Planning Secretary Arsenio Balisacan said after the data was released that the impact of the
central bank’s series of rate hikes in 2022 should be felt this year and result in a moderation in
inflation starting in 2023.---

The type of inflation we have is Cost-Push inflation. Where in the when the raw materials increase in
cost, the production/ finished products also increase in cost. If there is increase in the cost of production
of goods and services, there is likely to be a forceful increase in the prices of finished goods and services.