INFLATION IN THE PHILIPPINES 2023
Will your salary be enough? Why is my allowance getting short nowadays?
Have you ever heard about inflation? According to Investopedia, the term “inflation” refers to an increase in prices, which over time results in a loss of purchasing power.
The Philippines today is experiencing a sore high of inflation. The January result is the highest since 9.1% in November 2008, according to data released on Tuesday, February 7 by the Philippine Statistics Authority.
That is also more than three times the 3% reported in January 2022, demonstrating how much costs have increased in a single year.
People’s daily life might be significantly impacted by inflation since they could find it difficult to buy their needs in order to survive. Families must learn how to effectively budget for inflation as prices rise. This may be difficult, especially for individuals who are already having trouble getting by. Some people fall into poverty as a result of inflation. It gets harder for people to afford basic essentials like food and housing when prices rise but salaries remain flat.
Here are some tips on how to handle inflation according to Metrobank
1. Be mindful of your spending
It is simple to check where your money is going thanks to the many useful budgeting tools that are readily available online. When you have a greater understanding of your spending habits, you can start to make adjustments that will result in long-term financial savings.
2. Have an emergency fund
For coping with unforeseen circumstances like a medical emergency or auto repairs, an emergency fund is necessary. To ensure that you can support yourself in difficult times, try to save up at least three to six months’ worth of living costs. This will prevent you from using a credit card and accruing debt in the event that you lose your job or encounter a significant unforeseen expenditure. Instead of worrying about money, you may concentrate on getting back on your feet.
3. Invest in inflation-proof assets
Assets that retain their buying value over time are said to be inflation-proof. In other words, they continue to be valuable despite growing costs for other products and services. In times of economic uncertainty, this attribute may be very useful. A few distinct types of investments have a tendency to be inflation-proof. Precious metals, such as gold and silver, fall under this category. For millennia, people have used gold in particular as a store of value and a type of money. Land is another kind of asset that is inflation-proof. Although the cost of land might change in the near term, its value typically rises over time. This is due to the fact that there is a finite quantity of land available and the population is still expanding.
4. Save up for big-ticket items in advance
Starting to save money for a major purchase in advance is among the wisest moves you can do. When inflation ultimately takes its toll, you’ll be able to purchase the item without feeling the squeeze as much if you do it this way. This will give you time to save for your down payment and enable you to benefit from low interest rates. Also, you won’t be as likely to regret your purchase in the future.
5. Encourage investment, work, and savings
Saving is the act of putting money aside that you’d prefer not to spend right now for potential future use. You may use a savings account, for instance, to access this money whenever you want without taking any chances of losing it. Individuals frequently start saving money for a number of reasons, including, but not limited to, tuition, significant purchases, medical crises, and vacations.
On the other hand, investing is the process of purchasing assets such as securities such as stocks, mutual funds, bonds, real estate, and other types of investment instruments with the hope that their value would increase your financial situation. These investment vehicles are frequently employed to reach long-term objectives, such as retirement, education finance, or property purchase, provided there are risks associated.
Although there is little to no danger involved in keeping your money in a savings account, the return on yearly interest may be significantly lower than the increase a successful investment generates in the market.
Inflation lowers the value of future claims on money in the same way that it lowers the value of actual money. It is crucial to make judgments that are in line with strategic goals and avoid letting the present market volatility cloud our perception of the future. Avert paying exorbitant prices for depreciable items. The cost and quantity of purchasing consumable inputs should be reasonable considering the value they provide to production and your capacity to maintain profit margins. Only if the sale is compatible with long-term goals should you consider selling assets that increase in value and profit from inflationary pressures.