IntroductionThe article discussed inflation in the Philippines this year, its effects on the economy, and how the country handles it over time. The analysis examines macroeconomic issues that impact the economy. It focuses on the main points related to inflation. This will cover how inflation is measured, the effects on supply and demand, and analyze the relationship between inflation and the Philippine economy. Analysis The ultimate goal of all government is to maintain a strong and sustainable economy, but there are so many factors to consider to make it work. Right. The economy is a complicated issue but it is very important. The government is there to take care of its people and one of its goals is to provide a better/higher standard of living for everyone. In this report we would like to examine the Philippine economy using the concept of inflation and will extend the report to the importance of GDP. Inflation is defined as an increase in the general price level of goods and services. It is measured as an annual percentage increase (Hubbartd, Garnett, Lewis, & O'brien, 2010). As inflation rises, the value of the money you own buys a smaller percentage of a good or service. The Philippine inflation rate fell to 4.1%, within the central bank's inflation target of 3-5%. Despite the supply shock in the second half of 2013 due to the November typhoon, the government managed to cope with higher inflation. We have seen that the improvement in the inflation rate has led to the improvement of public finances. Initiatives such as improving tax collection and spending efficiency. There is also growth in public spending supported by strong growth in infrastructure spending, although there are slowdowns in other spending categories. A… halfway through… the achievement last year of investment grade sovereign credit ratings and improvements in several global competitiveness indices. Works Cited Hubbard, R. G., Garnett, A., Lewis, P., & O'Brien, A. P. (2010). Essentials of economics. French Forest, NSW: Pearson.Larano, C. (March 2014). Slowing inflation gives the Philippine central bank respite. The Wall Street Journal. Retrieved from http://blogs.wsj.com/economics/2014/03/05/slower-inflation-gives-philippine-central-bank-reprieve/?blog_id=8&post_id=23599&mod=wsj_valettop_emailLayton, AP, Robinson, TJC, & Tucker, I. B. (2012). Economy for today. South Melbourne, Vic: Cengage Learning.World Bank. (March 2014). Philippine Economic Update. Retrieved from http://www.worldbank.org/content/dam/Worldbank/document/EAP/Philippines/Philippine %20Economic%20Update%20March%202014.pdf