`“The Relationship Between Inflation and Future Saving

Capacity of Senior High School Students”

A Research Paper
Presented to St. Francis Academy of
Mabini Batangas INC.
Senior High School Development
Mabini Batangas

In Partial Fulfillment of the

Requirements for the Subject
Practical Research 2

Submitted by:
Atienza, Ma. Jecel R.
Boongaling, Charles Steven G.
Datinguinoo, Klarence C.
Gonzales, Dannara Mae P.
Napenas, Kyeziah Mae G.
Vega, Desanie E.
Veyra, Ashtryd Blanche C.
Valis, Cristian R.

October 2023
 CHAPTER I

INTRODUCTION

In many of the less highly developed countries, incomes are not

rising as rapidly as the desires of the community. In these countries,

personal savings are low, so that only limited resources are released for the

expansion of the community’s capital. Inflation has declined sharply around

the world since the global financial crisis. In advanced economies, however,

persistent below target inflation since the crisis has increased risks of de-

anchoring inflation expectation and led central banks to resort to

unconventional monetary policy instruments to supports demand. It has

consequences for people and firms throughout the economy, in their roles

as lenders and borrowers, wage-earners, taxpayers, and consumers.

Prices of goods, services and assets must be corrected for the effects

of inflation in order to make meaningful economic comparisons over time.

To correct for the effects of inflation, economists distinguish between what

they call nominal prices or prices in terms of some currency, and real prices,

or prices in terms of purchasing power over goods and services. In addition,

price increases in the supply and demand model were one time events

representing a shift from a previous equilibrium to a new one. When the

general price level rises, value of money falls and as such each unit of

currency buys fewer goods and services. Consequently, inflation reflects a

reduction in purchasing power per unit money.

Inflation measures how much more expensive a set goods and

services has become over a certain period, usually a year. Inflation in the

Philippines is beginning to moderate. According to the central bank, thE

headline inflation rate hit 8.7 percent in January 2023 but has dropped quite

a bit since coming in at 4.7 percent in July 2023. The Philippines has been
one of the big inflation stories in the region, as they have experienced some

of the worst upward price pressures since the pandemic and it was

something of an open question how President Ferdinand “Bongbong”

Marcos Jr. would deal with it. Inflation has plunged countries into long

periods of instability central bankers often aspire to known as “inflation

hawks”

Savings means different things to different people. To some, it means

putting money in the bank. To others, it means buying stocks or contributing

to a pension plan. But to economists, saving means only one thing

consuming less out of a given amount of resources in the present in order to

consume more in the future. Saving, therefore, is the decisions to defer

consumption and to store this deferred consumption in some form of asset.

It is setting aside money you don’t spent now for emergencies of for a future

purchase. It’s money you want to be able to access quickly, with little or no

risk and with the least amount of taxes. Financial institutions offer a number

of different savings options.

Sadly, Reyes (1996) claimed that inflation affects mostly the poor.

According to the 2015 Family Income and Expenditure Survey for instance,

the poorest Filipinos spend at least 60 percent of their earnings on foods,

whose prices usually increase faster that other commodities except oil.

Meanwhile, the nonpoor may even benefit from such increase in prices of

commodities as it may lead to their income gains, according to Son (2008).

With rising inflation, the costs of going to school will increase. The cost of

schooling not only includes school fees but also school supplies like

textbooks, stationary, uniforms and school meals. Families who are already

struggling financially are more vulnerable to these changes.

 According to Shadi Bushra high inflation raises the costs students

necessities, such as housing, food and of transportation for students to

spend less and earn more where possible the main way inflation reduces

the value of a students money is by raising the prices of everyday

essentials, such as food, shelter, and transportation. Landress says

students should focus on saving money or earning extra income. Reducing

discretionary spending like entertainment or eating out could be ways to

accomplish the first goal. Making a budget is the first step towards greater

control over your finances. Due to inflation, not only will the cost of living

increase, education costs will increase as well.

Inflation will add on to their struggles, such as having to find cheaper

alternatives or cut back on their spending. Sometimes that may even mean

a child having to cut down on meals, which will have adverse effects on their

health. Academic- related pressures brought about by inflation are

happening concurrently, while the government downplays the economic

hurdles of the masses. Inflation may highly distract the mind of the students

because instead of thinking about their studies their were busy thinking

about money. Inflation will affect two groups of students differently: those

who are planning to take a loan to cover their current or future education

expenses, and those who have already completed their education and have

an education loan to repay.

The aim of the study was to examine the relationship between inflation

and the future saving ability of high school students. Specifically, the study

aimed to investigate how inflation affects the saving behavior of these

students and explore the factors that influence their saving decisions in the

face of inflation. This study aims to provide insight into the financial

understanding and awareness of high school students and highlight the

importance of teaching financial management skills to this population. The

 results of the study have the potential to inform policymakers, educators,

and parents about the need to improve financial education and support

students to increase their ability to save. It is one of the fundamental factors

behind inflation expectations that affect socio-demographic conditions.

STATEMENT OF THE PROBLEM

This study aims to determine the relationship of inflation on the future

saving capacity of senior high school students of Saint Francis Academy of

Mabini Batangas, Inc.

Specifically, it will seek to answer the following:

1. What are the effects of inflation on students in terms of:

1.1 Cost of Living

1.2 Increased tuition fees

1.3 Savings and Investments

2. How can students manage the rising tuition cost brought on by inflation?

3. Can students use any techniques or resources to lessen the financial

burden of growing education costs due to inflation?

4. How does inflation impact the ability of students to save for future goals?

5. Are there any government initiatives or programmes in place to help

students whose education costs are being affected by inflation?

SCOPE AND DELIMITATION OF STUDY

This study focuses on how inflation affects students and investigates the

connection between inflation and their ability to save for the future.
SIGNIFICANCE OF THE STUDY

By conducting this study, it will give information on the effects of the

increase of goods and services mainly on the necessities.

The result of this study will be benefited the following:

Students

This study will teach students how to budget their money and how to

save money for their basic needs as students.

Parents

This research study might be useful for them in providing information on

how to assist their children or pupils by educating to cope with the problem

of inappropriate budgeting.

Consumers

They can use this study to make more informed decisions before buying

items that are influenced by inflation.

Future researchers

This research can help and gather knowledge to those planning and

preparing to conduct and similar study. They will be able to use this

outcome to access data, sources, and other information.

DEFINITION OF TERMS

Here are some other terminologies you should be familiar with gain more

understanding:

INFLATION- is a general increase in prices over time, resulting in a

decrease in the purchasing power of money. It means that the cost of goods

and services increases over time.

SAVINGS- refer to the money that is not spent and is instead kept aside for

future use.

EQUILIBRIUM- refers to a state of balance or stability in the economy,

where the demand for goods and services equals the supply. It is the point

where the quantity demanded and the quantity supplied are in balance.

COST OF LIVING- refers to the the amount of money required to maintain a

certain standard of living, including expenses like housing, food,

transportation, utilities, healthcare, and other necessities.

CONCEPTUAL FRAMEWORK

OUTPUT

 Factors that affects inflation on students in terms of:

a. Cost of living
b. Increase tuition fees
c. Savings & Investment
 Techniques or response to lessen the financial burden of growing
education costs.
 The impact on students ability to save for future goals.

INPUT

 Interview
 Survey Questionnaire
 Treatment of Data

OUTPUT

Perceived action on preparing students for inflation and ensuring long-term

financial security.
 \

CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents related literature and studies after a thorough

and in-depth search made by the researchers with regards to the factors

affecting inflation rate to people’s expenses. The studies and literature

cited in this chapter cover a variety of different ideas, concepts,

generalizations, and conclusions, as well as various developments

pertaining to the topic from the past to present.

RELATED STUDIES

Local Studies

Inflation has two major types. The first one is the demand-pull

inflation, or when the consumers demand more goods and services than

available. The other one is the cost-push inflation, which result from the rise

in the cost of inputs in the production process. (Caparas, 2002).

Inflation can be influenced by several factors. First, it can rise as a

result of the oversupply of money, or when the national bank prints money

beyond demand. Disturbances in the prices of basic commodities, such as

rice, can also affect the general prices of goods. ( Reyes,1996)

Foreign Studies

The relationship between inflation and growth, utilizing the error

correction model for four Asian countries. According to the findings obtained
from the study, there is a positive relationship for other countries between

inflation and growth and inflation is unavoidable for rapidly growing. In

addition, there are important feedbacks, between inflation and economic

growth. These results are highly important for the suggestions of policy.

Moderate inflation is helpful for the growth; however the rapid economic

growth feeds back the inflation. (Mallik and Chowdhury, 2001)

As the cost of education increases, students from low-income

families may find it difficult to access education, which may affect their

academic performance negatively. (Onifade and Abereijo, 2016)

Furthermore, inflation may also affect the quality of education in

secondary schools. Inflation reduces the amount of resources available for

investment in education, including the recruitment of qualified teachers and

the provision of quality learning materials. (Adeyemo,2018)

Synthesis

Inflation causes a country’s currency to lose its buying power. This

means that the cost of living – the amount of money people need to afford

basic expense like housing and food typically goes up. When the cost of

living goes up people need to allocate more of their income towards

necessities. In time, this process can show a country overall economic

growth. The reason economic is relatively simple consumers aren’t buying

as much stuff. This limits the flow of money through an economy. When

shopping slows down, companies profit drop. As a result, they may then

need to lower wages or lay off employees, removing more functional money

from the economy, if that leads to even fewer people buying goods and

service, it creates a cycle that can dramatically slow the economy in the
area where is it happening. If this happens on a larger scale, it can affect an

entire country. [ Tamila Mc Donald, 2022].

The Philippine Statistics Authority said inflation for rent in dormitories,

prices of prepared food in cafeterias and eateries, and the cost of education

services all rose faster in August from July. National Statistician Dennis

Mapa said there are some seasonalities at play, thanks to the opening of

school. The Philippine Statistics Authority said inflation for rent in

dormitories, prices of prepared food in cafeterias and eateries, and the cost

of education services all rose faster in August from July. National

Statistician Dennis Mapa said there are some seasonalities at play, thanks

to the opening of school. However, this year also represents the first face-

to-face experience for many students in two years’ time, so the spike in

prices is especially painful. Mapa also said it is unclear whether or not

inflation could continue a downward trend. The weakening peso could make

it more expensive to import gas, which has an impact on local pump prices

and eventually, other basic goods, Mapa added. Several news outlets have

covered how students cope with inflation in the country, including cutting

back on necessities just to meet the high demand prices of food, dormitory

rent, and tuition. There are students who don’t have parents who can

provide for their additional needs and are at a great disadvantage in fulfilling

their academic pursuits efficiently. Several news outlets have covered how

students cope with inflation in the country, including cutting back on

necessities just to meet the high demand prices of food, dormitory rent, and

tuition. Considerations of applying for part-time jobs are also prevalent

among college students as compensation for their daily expenses. Students

must be provided the liberty to pursue education sans the worries of making

ends meet due to the government’s inefficiency to address issues that affect

them. With hybrid learning and the transition to in-person classes occurring,

students must be aided with the corresponding groundwork by the

government for them to acquire quality education and attain stability in their

studies.

CHAPTER III

Research Methodology

Quantitative methodologies focus on precise measurements and

statistical, mathematical, or numerical analysis of data gathered by surveys,

polls, and other forms of data collection, or by modifying historical statistical

data using computational techniques. The main goal of quantitative research

is to collect numerical data and generalize it across populations or to explain

a particular events.

Research Design

The researchers use a descriptive-quantitative research design.

Descriptive research can be quantitative as it gathers quantifiable data to

statistically analyze a population sample. These numbers can show

patterns, connections, and trends over time and can be discovered using

surveys, polls, and experiments. The researcher used this design because

in collecting information needed in this study pertains to students who are

able and willing to save for the future.

Research Respondents

The respondents of the study are the Senior High School students in

the Saint Francis Academy who are getting ready for college and making

decisions about the future. In order to get respondents, researchers used a

purposive sampling technique to gather and collect the data needed. The

main goal of purposive sampling is to focus on a particular characteristics

of a population that are of interest, which will best enable to answer

research questions. The researchers limited respondents exclusively to the

students who are struggling as a result of the rise in inflation rate.

Data Gathering

The researchers uses secondary data. This information are gathered

from several journals and the internet. Additionally, it also uses survey

questionnaire. To conduct and gather data, the researchers use a

combination of survey questionnaires and focus group discussions. The

researchers introduce the aim of the topic and purposes, and ask

permission to the respondents to know their opinions or perception about

inflation.

Research Instrument

The researchers uses a survey questionnaire, that involves the use of

a set of standardized questions to gather information from a sample of

individuals or groups. The data collected from the survey can be analyzed to

identify patterns related to the research studies.

Statistical Treatment of Data

In order to treat the data gathered, the researchers used the

weighted average Mean to show the average across a particular variable or

attribute across a sample population. The weighted average mean formula

will be used to calculate the respondents’ demographic profile.

Formula:

∑ (xi∗wi)
W= i=1
n

∑ wi
i=1

Where in:
 W= weighted average

n= number of terms to be averaged

wi= weights applied to x values

X= data values to be averaged