When we say inflation it is the term we used to describe the rate at which the prices of goods

and services increase. If we are aware of what is happening to our country, inflation is one of
the crisis that our government are trying to solve. Based on the article, by the end of July 2022
the inflation rate climbed to 6.4 % which is higher than the previous month. According to 2022
annual rates of inflation, it is continuously breaking its record from 3.5 % for 2021 and 2.4% for
2020. And when it comes to Philippine inflation, 6.4% is high and unpleasant but manageable
control from a policy viewpoint. This issue affects the Philippine economy through a decrease
or slowdown in economic growth. By this, low-income earner will reduce spending.

In order to manage the inflation, it should maintain the stability in the economy. This is
controlled by the government and central bank. To do this they can use a variety of methods to
increase or decrease economic growth. Inflationary pressures can be managed from two distinct
sides of policy-making: (1) the fiscal and (2) the monetary. When we say fiscal policy, when the
taxes increase the consumer can reduce spending, it can lower the demand and reduce the
overall levels of inflation. And when we say monetary policy, it reduces the demand in the
economy and should lower inflation when the interest rates are increased. Based on the article,
the central bank made a decisive move to raise interest rates by 0.75 percent to respond to the
recent moves of the US central bank to raise interest rates. On the other hand, if the interest
rates are low, the consumers spend more money and inflation rises.

Inflation is about all aspect of the economy. In the financial market we are studying the
employment rates, tax policies, consumer spending, and etc. In terms of bonds, inflation has a
negative effect because it can result in higher interest rates that make the payments from fixed-
income assets less desirable than new, higher-yield asset. If the bonds are short-term, it may see
less movement. While if the bonds are long-term, it will have inflation risk priced in because the
higher the expectations of future rates of inflation, the more investors will demand. But bonds
are more stable in times of market stress and have an inverse relationship with share price.

As a student that is also affected by inflation. For me to survive, I need to be wise in

purchasing the things I need in my everyday life. I’ll be considerate in the price and the quality
of the products I buy. And lastly, always think before buying.

If we hear the word inflation, the first thing that comes to our mind is that our cost of living
will be more expensive. We are going to panic and reduce our expenses. If the inflation is too
high or too low, it could spike and unemployment can increase so that the economic growth
slows. But it doesn’t mean there is no good side of it. A moderate inflation can help the
economic growth, that will increase the employment rates and raise the wages of the workers.
This issue is not just the issue of the domestic and external factors but also the international
factors. Because the recent Philippine inflationary experience comes from the combination of
domestic economic factors and the effects of external economic and political conditions that
have happened in succession.