Republic of the Philippines
Department of Education
Region VIII – Eastern Visayas
Schools Division of Calbayog City
CALBAYOG CITY NATIONAL HIGH SCHOOL
SCHOOL ID: 313801
P2 Bgy. Hamorawon, Calbayog City, Western Samar 6710 . Tel Nos. PLDT-(055) 209-1535
Email: calbayogcitynhs@yahoo.com, calbayogcitynhs@gmail.com
THE IMPACT OF INFLATION ON STREET VENDORS IN CALBAYOG CITY
A Research Paper
Presented to
The Faculty of Calbayog City National High School
Senior High School Department
Calbayog City
In Partial Fulfillment of the Requirements
for Practical Research 2
by
John Benedict T. Canabe
Reynabeth D. Canuto
Aviona Jean Deluta
Rieza Erika D. Escobar
Arman R. Hiliran
Zoe Mikaela M. Lentejas
Princess Aljhana G. Macarayo
Coleen Trisha M. Mancol
Raffy Jr. L. Monares
Ma. Evan L. Prudenciado
Sheila Jane A. Sanchez
Kya Charity A. Tarrayo
September 2022
CHAPTER 1
THE PROBLEM AND ITS SETTING
Introduction
Inflation is the increase in the prices of goods and services over time. Inflation
cannot be measured by an increase in the cost of one product or service, or even several
products or services (Federal Reserve System of United States, 2016).
Based on previous studies, inflation has a significant impact on the business field.
According to Jenkins (1974), inflation has had a financial impact on the Canadian
business sector. In another study by Sulistiyono (2019), the results of the data analysis
show that inflation has an effect on the number of MSME players in Sukoharjo Regency.
This means that the higher the inflation rate, the number of enterprise players will
decrease.
As a result of inflation, 89% of small-business owners in America have had to
increase the price of their products or services since the pandemic began. Almost half of
businesses (45%) have raised their prices by more than 20%, while 44% report raising
prices no more than 15%. Only 11% of small-business owners report no increase in their
prices. Evidence said that 92% of small-business owners' cost of products or services
required to conduct their operations had risen since the pandemic started. For the year
2022, 71% of small-business owners reported a 20% rise in supply and service costs: (a)
16% of small-business owners report a 50% increase in costs; (b)13% of small-business
owners report a 40% increase in costs; (c) 16% of small-business owners report a 30%
increase in costs; (d) 26% of small-business owners report a 20% increase in costs; and
(e)19% of small-business owners report a 10% increase in costs (T. Wheelright, July
2022).
According to the Philippine Statistics Authority, from 2.1% in May 2020, the
inflation rate rose up to 4.5% in May 2021, which shows an increase of more than 100%.
Of the six provinces, only the provinces of Biliran, Eastern Samar, and Samar recorded
an increase in inflation rates in August 2022 at 7.9, 7.2, and 6.8, respectively.
Inflation has affected many businesses, ranging from small proprietorships to big
companies, including street vendors in Calbayog City. Street vendors are sellers of goods
and foods in the street, either from stalls or vans or with their goods laid out on the
sidewalk. They contribute significantly to the informal economy and the life of public
spaces, providing valuable services and goods for a lower price. Although street vendors
are known for their affordable prices, these prices increased due to inflation.
The researchers opt to find the impact of inflation on street vendors in Calbayog
City. The researchers will then use the findings to propose possible solutions or programs
that will help the street vendors withstand inflation.
Theoretical Framework
Understanding the true cause of Inflation and what informal economy is can be
significantly helpful to finding the impact of inflation on small businesses such as street
vendors. This study will be based on the following theories:
Modern Monetary Theory (MMT) is an economic theory that suggests that the
government could simply create more money without consequence as it's the issuer of
the currency, according to the Federal Reserve Bank of Richmond. As part of this theory,
the thinking is that government deficits and national debt don't matter nearly as much as
we think they do. Monetary theory is based on the idea that a change in money supply is
a key driver of economic activity. It argues that central banks, which control the levers of
monetary policy, can exert much power over economic growth rates by tinkering with the
amount of currency and other liquid instruments circulating in a country's economy. The
monetary theory of inflation asserts that money supply growth is the cause of inflation.
Faster money supply growth causes faster inflation. In particular, 1% faster money supply
growth causes 1% more inflation.
According to OPEC Members 1973, Cost-push inflation occurs when overall prices
increase due to increases in the cost of wages and raw materials. Higher costs of
production can decrease the aggregate supply in the economy. Since the demand for
goods hasn't changed, the price increases from production are passed onto consumers
creating cost-push inflation. For cost-push inflation to take place, demand for the affected
product must remain constant during the time the production cost changes are occurring.
To compensate for the increased cost of production, producers raise the price to the
consumer to maintain profit levels while keeping pace with expected demand.
The informal economy is the diversified set of economic activities, enterprises,
jobs, and workers that are not regulated or protected by the state. The concept originally
applied to self-employment in small unregistered enterprises. It has been expanded to
include wage employment in unprotected jobs. (WIEGO, 2012)
With respect to the present study, the researchers have adapted the framework of
the Monetary Theory of Inflation of Friedman, the Cost-push inflation of OPEC members,
and the concept of Informal Economy in determining the impact of inflation on street
vendors. The researchers will utilize these theories in making a survey questionnaire
about the respondent’s profile, impact of inflation, and the problems encountered by the
respondents.
Conceptual Framework
The diagram illustrates the flow of the study regarding the impact of inflation on
supplies affecting street vendors.
The researchers will conduct the profiling of the respondents with the following
categories: age, sex, capitalization, years of operation; and monthly income. The
researchers will gather the following data about the sales, income, expenses, and
production, that will be analyzed to examine the impact of inflation on street vendors in
Calbayog City. The researchers will inquire if there is a significant relationship between
the profile of the respondents and the impact of inflation on street vendors. The
respondents will also be asked what are the problems encountered by the respondents.
The researchers will conduct the survey questionnaire regarding the needed data
for the study. The researchers will then analyze the data gathered from the respondents
that includes the following: sales, income, expenses, and production. After conducting a
survey, the researchers will categorize the profiles and data of the respondents in order
to organize and determine the variables used in the study. The researchers will use data
analysis using statistics and create statistical figures or tables and graphs in order to
present the information from the data gathered.
Based on the findings of the study, the researchers will present the result and
discussion of the study, and propose activities or programs that can possibly help ease
the impact of inflation on the street vendors.
The profile of the
respondents:
- Age;
- Sex;
- Capitalization;
- Years of Operation;
and
- Monthly Income?
The impact of
inflation on street
vendors in Calbayog
City:
- Sales;
- Income;
- Expenses; and
- Production?
What are the
problems
encountered by the
respondents?
The researchers will
collect data using
distributed survey
question.
The researchers will
analyze the gathered
data using statistical
treatment.
The researchers will
propose a seminar
about the impact of
inflation to help the
street vendors.
Figure 1. The Conceptual Paradigm that shows the flow of the study entitled The Impact of Inflation on Street Vendors in
Calbayog City
Statement of the Problem
This study aims to determine the impact of inflation on street vendors in Calbayog
City.
Specifically, this study aims to answer the following questions:
1. What is the profile of the respondents in terms of:
1.1 Age;
1.2 Sex;
1.3 Capitalization;
1.4 Years of Operation; and
1.5 Monthly Income?
2. What is the impact of inflation on street vendors in Calbayog City in terms of:
2.1 Sales;
2.2 Income;
2.3 Expenses; and
2.4 Production?
3. Is there a significant relationship between the Profile of the Respondents and the
impact of inflation on street vendors?
4. What are the problems encountered by the respondents?
5. Based on the findings of the study, what activities/programs can be proposed?
Null Hypothesis
The study will be guided by the lone hypothesis which states:
HO1: There is no significant relationship between inflation and street vendors in
Calbayog City.
Scope and Limitations
This study will be conducted exclusively to Calbayog City, small businesses
particularly in the street vendors. The main goal of the study is to determine the impact of
inflation in street vendors in Calbayog City depending on their business. This study will
focus on following variables the profile of the street vendors in terms of, age, sex,
economic status, capitalization, and monthly income.
Significance of the Study
This study is significant for it provides an understanding of the impact of inflation
to the following beneficiaries:
Street Vendors. The study will help street vendors find an alternative strategy to
lessen the expense and increase the income or revenue.
Consumers. The study will help the consumers become much more aware of the
impact of inflation and properly spend on necessities.
LGU. The findings of the study can help improve the policies made by the LGU to
reduce the impact of inflation in small businesses such as street vendors.
Future Researchers. The study will give an understanding to those who want to
pursue a parallel study regarding the impact of inflation.
Definition of Terms
The following terms are defined conceptually and operationally to facilitate the
reader’s understanding of the study.
Capitalization. In finance, capitalization refers to the book value or the total of a
company's debt and equity. It also refers to the company's capital structure (Tuovila,
2022). In this study, it refers to the money put into business by the street vendors as the
starting fund to operate.
Expense. An expense is the cost of operations that a company incurs to generate
revenue. It is simply defined as the cost one is required to spend on obtaining something
(Liberto, 2022). In this study, it refers to the costs being incurred by the street vendors to
generate revenues.
Impact. Impact implies changes in people’s lives; this might include changes in
knowledge, skill, behavior, health or living conditions for children, adults, families or
communities. Such changes are positive or negative long term effects on identifiable
population groups produced by a development intervention, directly or indirectly, intended
or unintended (United Nations, 2020). In this study, it refers to the major effect of inflation
on the street vendors.
Income. Income refers to the money that a person or entity receives in exchange
for their labor or products. Income may have different definitions depending on the context
(Scott, 2022). In this study, it is used to describe revenue street vendors derived from
selling of goods.
Inflation. Inflation is a measure of the rate of rising prices of goods and services
in an economy. Inflation can occur when prices rise due to increases in production costs,
such as raw materials and wages. (Fernando, 2022). In this study, it is used as the
increase in the cost or prices of goods of the street vendors.
Local Government Unit (LGU). The local government in the Philippines is divided
into three levels: provinces and independent cities, component cities and municipalities,
and barangays, all of which are collectively known as local government units (Law Insider,
2020). In this study, it refers to the political subdivision of Calbayog City.
Operation. Operating activities are the functions of a business directly related to
providing its goods and/or services to the market. These are the company's core business
activities, such as manufacturing, distributing, marketing, and selling a product or service
(Hayes, 2020). In this study, it refers to the process of making or producing a product that
will be sold by the street vendors.
Production. Production is the process of making or manufacturing goods and
products from raw materials or components (Carbon Cellective, 2021). In this study, it
refers to the making of goods or products to be sold by the street vendors.
Sales. Sales are the proceeds a company generates from selling goods or
services to its customers (Ross, 2021). In this study, it refers to the earnings made by the
street vendors derived from selling of goods.
Street Vendors. Street vendors sell goods and offer services in broadly defined
public spaces, including open-air spaces, transport junctions and construction sites
(WEIGO). In this study, they are referred to as sellers of goods and foods in the streets
of Calbayog City, either from stalls or carts, on the sidewalk.
CHAPTER 2
REVIEW OF RELATED LITERATURE
Capitalization:
RRL RS Years of Operation:
RRL RS Years of operation: Operational Definition Psychology – Definition, Examples, and
How to Write One by https://onemindtherapy.com/research/operational-definitionpsychology-definition-examples-and-how-to-write-one/
Monthly Income:
RRL RS Sales:
RRL RS Income:
RRL RS Expenses:
RRL RS -
Production:
RRL RS -
References
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Investopedia.
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from
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Collective, C. (2022, October 3). What is Production? Meaning, Types, Examples,
Theory. Carbon Collective Investing LLC. Retrieved October 9, 2022, from
https://www.carboncollective.co/sustainable-investing/production
Expense: Definition, Types, and How Expenses Are Recorded. (2022, September 23).
Investopedia.
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October
9,
2022,
from
https://www.investopedia.com/terms/e/expense.asp
Glenn Jenkins, 1977. "Inflation - Its Financial Impact On Business In Canada,"
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LGU
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Questionnaire on the Impact of Inflation on Street Vendors in Calbayog City
I. Profile of Respondents
Direction: Please fill in the form below. Tick (/) the box that corresponds to your
answer.
Name: (Optional) _____________
Age: ________
Sex: ________
Capitalization:
[] Php 100 - Php 500
[] Php 501 - Php 1,000
[] Php 1,001 - Php 1,500
[] Php 1,501 - Php 2,000
[] Php 2,001 - Php 2,500
Years of Operation:
[] 1 year - 5 years
[] 6 years - 10 years
[] 11 years - 15 years
[] 16 years - 20 years
[] 21 years - 25 years
Monthly Income:
[] Php 100 - Php 1,000
[] Php 1,001 - Php 2,000
[] Php 2,001 - Php 3,000
[] Php 3,001 - Php 4,000
[] Php 4,001 - Php 5,000
II. Impact of Inflation on Street Vendors
Direction: Tick (/) the box that corresponds to your answer.
Legend:
5 – Strongly Agree
3 – Neutral
4 – Agree
2 – Disagree
STATEMENTS
(Sales)
1.
2.
3.
4.
5.
1 – Strongly Disagree
5
4
3
2
1
IV. Difficulties Faced by ABM students in their Specialized Subjects
Direction: Please tick (/) the checkbox that corresponds to your answer. Select all
that apply.
[] 1. The respondents have more disposable income used for greater investments.
[] 2.
[] 11. Others: _______