EFFECTS OF INFLATION IN STOCK MARKET AMONG THE VENDORS OF LIBERTAD MARKET
A Research Paper Presented to
Ms. Jirah Joy Gicana
Practical Research II Subject Teacher
Prepared By:
Accountancy, Business and Management 12 BARNARD
DILAO, Rica
ESPARTERO, JULIE
FEDILO, Nichole Ann A.
GAUDIANO, Rommel
LASTIMOSO, Jumhel
MADERADA, Mexcel C.
PANES, Jerlyn
VILORIA, White
ACKOWLEDGEMENT
The researchers would like to show their most heartfelt gratitude to those who helped in
completing this research paper.
To the people who provided insight and expertise that greatly assisted the research, and have
willingly helped out with their greatest abilities,
To the participants, for the personal data you have provided, and for lending us your time in
answering the questionnaires despite your hectic schedules.
To our beloved research teacher, Miss Jirah Joy Gicana, for your guidance and knowledge in
creating our research.
And most of all, to our Lord Jesus Christ, for blessing us with wisdom, for giving us all the
strength and courage in finishing what we have started, and for being with us in the hardest
times.
ABSTRACT
This study aims to determine the effects of Inflation among the active vendors of Libertad
Market. The study was conducted through a survey of 52 different active members in Libertad
Market. A descriptive research design was utilized in this study, as it sought to determine the
effects of Inflation and its relation with its dependency among the vendors. The researchers had
formulated a survey questionnaire as the research instrument of this study.
INTRODUCTION
This section provides an overview of the existent study through the discussion of the
background along with its general and specific objectives. Moreover, this explains the
restrictions and scope of the study as well as its impact to the various aspects of the community
and environment.
BACKGROUND OF THE STUDY
In recent years, raw products value continues to increase which causes for the product values in
stock market to elevate. This problem resulted to discoveries of new alternative way on how to
lessen the expenses when buying needed products. High Inflation is causing supply chain
disruption. Organizations need to act now to be resilient to the new reality.
Rising values of products causes for some stores in Libertad Market to close due to bankruptcy.
While some stores extended because they were able to find new ways to sell their product by
selling it in alternative ways like online selling and delivering it in door-to-door houses.
Inflation is one of the big problems in our country. Almost everyone knows what inflation is, but
it remains a source of great deal of confusion because it is difficult to define it unambiguously.
Inflation is often defined in terms of its supposed causes. Inflation exists when money supply
exceeds available goods and services. Or inflation is attributed to budget deficit financing.
As years passed by value of products increases while the value of money decreases. Inflation
continues to rise while the percentage of unemployed people is also rising. Higher
unemployment rate will lead to increase government borrowing. It will cause a drop in tax
revenue because there are lesser people paying income tax and spending less. Due to the loss
of earnings to the unemployed, the government need to spend more subsidy for them in
housing benefits and income support.
Inflation is one of the most important economic issues in the world. It can be defined as the
price of goods and services rising over monthly or yearly. Inflation leads to a decline in the value
of money, it means that we cannot buy something at a price that same as before. This situation
will increase our cost of living.
If uncontrolled, inflation can result in severe loss of consumer or organizational purchasing
power. Typically, procurement managers respond to high inflation by placing orders promptly,
trying to secure supply and build inventory. Aggregated across the whole economy, this
increase in demand can worsen inflation.
STATEMENT OF THE PROBLEM
The aim of this study is to determine the effects of Inflation to Active Vendors of Libertad
Market.
1. How much did the product’s value increase from its past value to its present value?
2. How did the increase in product value affect the vendors?
3. What were the reactions of buyers/ consumers to the increased value of products?
4. What are the strategies implied of vendors/ sellers in selling their products when there is an
increasing of product prices in stock market?
5. What are the impacts of inflation to both consumer and vendors in Libertad Market?
HYPOTHESIS
There are many factors effecting the vendors of Libertad Market due to inflation. The
dependency of income and money management of vendors on inflation are high. The
researchers were able to determine and specifically name out each factor in the inflation
towards the vendors of Libertad Market.
THEORETICAL FRAMEWORK
The theory of inflation seeks to explain why inflation occurs and why its rate varies, to explain
the co-movements between the inflation rate and other variables and to permit the design of
mechanisms capable of delivering an optimal inflation path.
The Theory of Inflation presents in one volume a comprehensive description of the historical
inflation record, surveys the current state of knowledge on the fundamental forces that cause
inflation and the mechanisms that propagate it, and examines the costs of inflation and the
problems of achieving price stability.
Professor Parkin’s selection draws both upon the contribution of mainstream economists -
whose work has been based on market demand and supply - and a new generation whose work
has emphasized the importance of technology and preferences. This volume, as the
introduction states, indicates that there is much of value to be learnt from both approaches.
CONCEPTUAL FRAMEWORK
The Conceptual Framework relates the Theory of Inflation to Effects of Inflation. It states when
inflation occurs and why its rate varies. The main insight from the theory is that while
consumers may have limited ability to store and recall specific prices, and even succumb to a
number of biases in the way in which they form perceptions and expectations of global price
changes, they do seem to have some feel for, and ability to judge and forecast, inflation.
SCOPE AND DELIMITATIONS
This study aims to determine the effects of the continuous increase in product value on the
vendors by personally surveying them at Libertad Market. The research team will conduct the
survey with at least 50 active vendor members at Libertad Market. For a specific research
project, the research team will survey both wholesalers and resellers to see how they were able
to adapt to the sudden increase of value. The research team will also survey the
consumers/buyers to know how they buy their needs and wants while effectively managing
their money.
SIGNIFICANCE OF THE STUDY
The result of the study will be of great benefit to the following:
Community. Inflation affects consumers most directly, but businesses can also feel the impact.
Household, or consumers, lose purchasing power when the prices of items they buy, such as
food, utilities and gasoline, increase. While companies lose purchasing power, and risk seeing
their margins decline, when prices increase for inputs used in production, such as raw materials
like coal and crude oil, intermediate products such as flour and steel, and finished machinery.
Government. Inflation has two main effects on the government’s budget and the economy.
First, unexpectedly high inflation works as a “soft default” on current government debt since
the real value of the debt asset is repriced under new inflation expectations. The reduction in
real debt reduces capital crowd-out and increases investment. Second, the tax code has various
elements which are not automatically adjusted for inflation.
Agriculture. Input price inflation creates cash flow problems for farmers and increases the
necessity of a high level of operational management and conservative financial strategies.
Individual farmers can possibly counteract the effect of input price inflation through increases
in productivity and economizing on costs.
Libertad Market Vendor. Rising costs and uncertain revenue growth can take a toll on
corporate profit margins, and stock prices can fall in response. On a broader scale, high inflation
creates unknowns about future interest rates, and that uncertainty often contributes to market
volatility.
Other Vendors. When Inflation rises, all of the sellers/vendors will also increase their product
prices due to the profit that they will gain. Vendors are not just vendors; they are human trying
to make a living through selling products that other people need.
DEFINITION OF TERMS
The following terms are used extensively in the study. They are defined conceptually and
operationally for better understanding.
Unambiguously. In a manner that is not open to more than one interpretation.
Procurement. The action or occupation of acquiring military equipment and supplies.
Aggregate. A whole formed by combining several (typically disparate) elements.
Deficit. An excess of expenditure or liabilities over income or assets in a given period.
REVIEW OF RELATED LITERATURES
Effects of Inflation on the Supply Chain
Procurement becomes more complex during inflationary periods. If increased costs are to be
passed on to the buyer, then demand typically fails, therefore fewer goods or services may be
required by producers. Sales and Operating (SOP) processes need a more focused, detailed, and
agile planning approach with support from all the stakeholders in the supply chain, including
Sales and Marketing, and Warehousing and Logistics teams.
In a state of reduced supply, some companies had to raise their prices, creating the inflationary
situation we are in. Although container shipping rates and delivery times have recovered
recently, this hasn’t eased consumer prices. The Bank of England expects inflation to return to
its 2% target in around two years. If this happens the rate of price increases will slow, but
higher costs could remain.
Inflationary pressure directly affects the supply chain. Persistent problems with port congestion
and import containers are exacerbated by inflation and labor availability. Fuel prices are a huge
factor in logistics as well, driving up transportation and freight costs that were already in the
rise because of driver shortages.
Many supply chain and logistics professionals believe inflation has negatively affected their
business. These impacts include capacity constraints as well as rate and price increases, supply
chain instability, longer lead times and delayed orders, and continued issues with shipping
containers.
What can Supply Chain Teams do to mitigate the impacts of inflation?
In times of increased uncertainty, it is important to take a whole organization approach to
managing supply chain risks. Organizations should:
1. Stress test supply chains by mapping critical value chains and then running disruption
scenarios (including variants and combinations) against them. Organizations need to
understand their main cost drivers and where there could be considerable losses from
increased costs and inability to supply. This raises awareness of supply chain risks, identifies
possible gaps and allows appropriate strategies to be put in place to increase resilience.
2. Review your supply chain resilience, including the financial health of your critical suppliers.
High inflation rates could result in financial distress for some or a change in behaviors. You
don’t want to get caught out with an administration letter from a key supplier without a backup
or contingency plan, or because a critical partner has changed strategy
3. Conduct a thorough risk assessment of your critical suppliers and their sub-suppliers to
identify which risks could have an impact on your supply chain and business resilience.
Increased costs due to inflation tend to have a cumulative effect on the supply chain and if you
have a business exposed to these increases then you want to quickly understand the impact
and have response plans ready.
METHODOLOGY
This section complies the specific procedure or techniques used to identify, select, process, and
analyze information about the study. The methodology allows the reader to critically evaluate a
study’s overall validity and reliability.
Research Design
The main intention of this study is to know how inflation can affects the vendors of Libertad
Market and to know why does inflation occur. The present study employed both descriptive
and quantitative approach to resolve its queries.
For the problems to be answered in this study, the researchers utilized a descriptive research
method. Descriptive research is a method that describes a population, situation or
phenomenon accurately and systematically.
It can answer what, when, where, when and how questions, but not why questions. This
method is appropriate for this study because it states the effects of Inflation among the active
vendors of Libertad Market.
PARTICIPANTS
The participants that participated in this research are the active vendors in Libertad Market.
The researchers were able to survey (60%) 52 persons of active members in Libertad Market.
MEASUREMENT
Inflation is an increase in the level of prices of the goods and services that households buy. It is
measured as the rate of change of those prices. Typically, prices rise over time, but prices can
also fall (a situation called deflation.)
The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures
the percentage change in the price of the basket of goods and services consumed by
households.
PROCEDURES
This section comprises the steps that researchers made to conduct this study.
The researchers looked for applicable questions on how inflation affects the vendors of Libertad
Market. Organizing and simplify the questions for the vendors to easily answer the questions.
Then, the researchers conduct a personal survey to the vendors of Libertad Market. Lastly, they
evaluate the answers of the active vendors from the most common answer to the least
common answer.
ETHICAL CONSIDERATION
In this research study, the respondent’s profile will be assured with confidentiality. A
participant’s consent was included in the questionnaire that was distributed informing them of
the nature of the study and state that they can withdraw from answering the survey.
REFERENCES
THE EFFECTS OF INFLATION AMONG THE ACTIVE VENDORS OF LIBERTAD MARKET
QUESTIONNAIRE
Dear participants,
It is our concern to understand the effects of social media usage to LICEO students. We are also
sensitive about maintaining absolute confidentiality about information that will be gathered. In
this regard, I will treat your answers in the strictest confidentiality and use the information only
for this research.
-The researchers
PARTICIPANT’S CONSENT
I am freely participating in this study by answering this questionnaire. I hereby give my
consent to the researchers to accept and process their responses in connection with their
research on the effects of Inflation among active vendors in Libertad Market.
I acknowledge that my participation on this survey is purely voluntary. I have been
assured that all information I disclose will be treated with utmost confidentiality.
_____________________ ________________
Participant’s signature Date
I. PROFILE
Age: ____ Sex: ____ Strand _______ Grade ____
II.
How much did the product’s value increase from its past value to its present value?
A. ₱100
B. ₱200
C. Less than ₱50
How did the increase in product value affect the vendors?
A. Few customers are buying
B. Low in profit
C. Lack of budget
What were the reactions of buyers/ consumers to the increased value of products?
A. Happy
B. Angry
C. Disappointed
What are the strategies implied of vendors/ sellers in selling their products when there is an
increasing of product prices in stock market?
A. Follow the SRP (suggested retail price)
B. Find a way where you can buy a cheaper product
C. Sell product through online selling
What are the impacts of inflation to both consumer and vendors in Libertad Market?
A. Increase of budget for products
B. They find a cheaper product
C. Buying small quantities of products than before
Thank you for taking time to read, understand, and answer this survey questionnaire.
