The global economy is facing a number of challenges.

Inflation is higher than it has been

in decades, financial conditions are tightening in most regions, Russia's conflict in

Ukraine, and the presence of the COVID-19 pandemic all have a negative impact on the

outlook. Inflation, in particular, is a measure of a country's currency's purchasing power.

It is the rate at which the price of goods and services rises. Over time, it depreciates

money while increasing prices. Inflation has an impact on the economy, industry, and

society as a whole. Tinoco-Zermeo, Venegas-Martnez, and Torres-Preciado (2018) find

that price increases have a consistently negative and nonlinear effect on financial

variables; this effect is statistically significant across the board, significant in developing

countries, and insignificant in developed countries. In a developing economy, high

inflation makes demand for their goods and services less appealing, resulting in lower

demand for the exchange rate. As the exchange rate falls, capital outflows may occur as

investors seek to protect the value of their assets (Petingger, 2022).

The Philippines, like many countries around the world, is facing skyrocketing food

inflation due to supply issues and high fuel costs (Nguyen, 2022). The country’s headline

inflation rate increased further from 6.9 percent in September 2022 to 7.7 percent in

October 2022, continuing its upward trajectory. Since December 2008, the inflation rate

has not been this high. (PSA, 2022). Enterprises and consumers are the most affected

sector by the current inflation, concentrating on enterprises, which are the backbone of an

economy. In the Philippines, 99.56 percent of the firms are MSMEs of which 90 percent

are micro-enterprises; 9.6 percent are small enterprises and only 0.4 percent are medium

enterprises (DTI 2017). In terms of industry, the one that is most affected by inflation is

small-scale businesses, such as microbusinesses. Inflation can affect profits by changing

the cost-price relationship and reacting to sales volume (Ali & Ibrahim, 2018). This

shows the importance of micro-businesses contributions to the country’s economy.

Inflation has a wide-ranging impact on businesses. Particularly in the matter of cash flow

and purchasing power. This puts a strain on small businesses and can subsequently cause

a drop in profitability. As a result, inflation is a major concern for business owners and

must be carefully managed. Hence, the level of their financial performance should be

monitored during periods of inflation because it evaluates the financial health of a

business which will help in future decision-making (Verma, 2022). According to

Batayneh, Al Salamat, and Momani (2021), empirical findings confirm that inflation has

a statistically significant long- and short-run negative effect on financial sector

development. On the contrary, economic growth has a statistically significant long- and

short-run positive impact on financial sector performance. While Moyo and Turgut

(2020) found a significant inverse relationship between inflation and financial

performance and a negligible positive relationship between the exchange rate and

financial performance.

The objective of the study is to assess how inflation affects the level of financial

performance of Micro-Businesses in Plaridel Wet Market this will answer if there is a

positive or negative impact on the financial performance of Micro-businesses and what

workshop can the researchers propose after assessing their Level of Financial

Performances. Under this premise, the researchers find it important to understand how the

Micro-Businesses in Plaridel Wet Market adapt to fast-paced changes and the uncertainty

of inflation by assessing their Financial Performance which can be helpful to our current

and future entrepreneurs. The result of the study will also be a basis for a workshop that
will enhance and broaden the entrepreneur’s view in terms of business, principally in

managing their Financial Performance.