Last Updated: 25th July 2022

How to Inflation-Proof Your Finances in the Philippines

It’s no secret that the cost of living in the Philippines keeps going up. Inflation is a serious threat to your financial security, so protecting your finances should be more of your priority.

Written by: Piggyy

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As of this time of writing, prices for essential commodities continue to increase. And the sad part is that your income or salary doesn’t necessarily increase immediately. 


The higher the prices, the more you need to spend, resulting in less savings while expenses keep piling up. So, here are some tips on how to inflation-proof your finances and protect your hard-earned money. 


What Is Inflation?


Inflation is the general increase in prices and a fall in the purchasing power of money. It can be particularly troublesome for consumers, making it harder to afford the things they need or want. 


However, there are various strategies that individuals and organizations can use to cope with inflation. For example, by investing in inflation-proof assets such as real estate or gold, people can insulate their finances from inflationary pressures. 


Is Inflation Good or Bad?


The term inflation is generally associated with negative effects, such as reduced purchasing power for consumers, lower standards of living for Filipinos, and higher cost of raw materials for manufacturing and production sectors. 


However, inflation can also have positive effects, such as increased output, improved trade balances, and increased employment. Despite its benefits, inflation must always be carefully managed to avoid disproportionately affecting the most vulnerable populations. 


By carefully managing inflationary pressures, it is possible to reap the benefits while minimizing the negative impact on individuals and businesses alike. To find out how to do it, read further.


7 Ways to Beat Inflation in the Philippines


Prices of goods and services seem to go up every day, making it hard for some consumers to make ends meet. This blog post will give you seven ways to beat inflation in the Philippines.


Save money 

You need to start saving money now. It may mean making tough choices, like cutting back on non-essential spending or adjusting your budget. Even minor changes, like bringing lunch to work instead of buying it at a restaurant, can add up over time and help you build a savings cushion.


Set aside a portion of your paycheck before anything else. It’s your way to pay yourself first before paying bills and other expenses. It would even be better if you had a separate savings account where you deposit funds every month for a portion of your paycheck. 


Diversify your investments

If you are looking for high-yield savings and reliable, inflation-proof returns, it’s hard to beat the power of high-yielding savings accounts, mutual funds, stocks, bonds, and ETFs. 


You already grow your money with digital banks such as ING, CIMB, Tonik, and more that offer high-interest rates per annum, ranging from 2.5% to 4%. You can also open your COL Financial account and start funding your account for as low as P1,000 to buy stocks. 


Whether you are just starting or looking to optimize your current portfolio, investing in mutual funds and high-yield savings is a smart choice for anyone who wants financial security and peace of mind today and into the future.


Buy property for long-term investment

As more and more Filipinos become financially savvy, many choose to invest in property as a long-term investment strategy. Whether they purchase land, an apartment building, or a single-family home, these investors understand that buying property is one of the most effective ways to protect their finances against inflation. 


Property appreciates over time if it’s located in a strategic area such as nearby schools, universities, offices, or even within central business districts such as Makati, Ortigas, and BGC.


It also provides a stable income source through renting or selling it to other potential clients at a higher price after a few years. 


Moreover, investors can reap even more significant financial rewards over time by purchasing real estate in nearby provinces experiencing rapid growth and development, such as Pampanga, CALABARZON, and Bulacan.


Start your own business

Starting your own business is often cited as a way to inflation-proof your finances. And owning your own business can insulate you from inflation since you’re not relying on a salary that may not keep up with the rising cost of living. 


But starting your own business is also a risky proposition, and not everyone is cut out for it. In addition, small businesses often have a hard time succeeding due to the country’s economic conditions and the behavior of Filipino consumers. 


So before you decide to start your own business, be sure to do your homework and understand the risks involved. Otherwise, you could end up worse off than if you had just kept your day job.


Get the best deals on everything

Anyone who has ever stepped into a grocery store knows that food costs and other necessities seem to be constantly rising. 


Inflation is a reality that we all have to deal with, but there are ways to lessen its impact on your wallet. One way to do this is to take advantage of deals, coupons, and shopping festival discounts. 


For example, many stores offer senior citizen discounts or promotional deals if you purchase a certain amount of items. By taking advantage of these offers, you can save money while still getting the items you need. 


If you buy groceries online like GrabMart, ShopeeMart, and MetroMart, use the vouchers and codes to save more on shipping and other special items during the promos. 


Additionally, it is also wise to purchase items in bulk when they are on sale. This may require some extra effort in terms of storage, but it can lead to significant savings in the long run. By being smart about your purchases, you can keep more money in your pocket and avoid the negative effects of inflation.


Settle your debts

One of the smartest financial decisions you can make is to pay off your debts. When you have debts, you are essentially giving your hard-earned money to someone else, whether that person is a bank, credit card company, or another lender. 


Manage your finances and avoid costly interest charges by getting out from under your debts and settling up. You also help ensure that your investments will be less impacted by inflation since you will have fewer obligations and won’t have to dedicate as much of your income to keep up with payments. 


Settle your debts and free yourself from the burden of paying high-interest loans as soon as possible.


Suppose you have debts or other financial obligations tied to a specific Peso or Dollar amount or interest rate. In that case, you must take steps to inflation-proof these arrangements. 


One effective way to do this is by repaying debt with a fixed rate of return, such as a mortgage or an auto loan. This ensures that your payments stay the same no matter how high inflation rises, thus helping to preserve your purchasing power over time.


Constantly educate yourself about personal finance

As anyone serious about their finances knows, we are constantly faced with new challenges and changes in the economic landscape. Whether it’s inflation, fluctuations in the stock market, or shifting tax rates, it’s crucial to be proactive to stay ahead of the curve. 


It means staying up-to-date on the latest developments in personal finance and ensuring that our finances are always inflation-proof as you practically apply the tips mentioned above. 


You can ensure that you have everything you need to weather any financial storm that may come your way. So whether you’re reading books on investing or seeking out online resources for managing your money, be sure to constantly educate yourself about investments, global markets, and trades. 


After all, knowledge is the true power to keep your finances on track.


Final Thoughts


Inflation is a complex economic concept, but it’s important to have a general understanding of it if you want to make sound financial decisions. 


We hope this article has helped you do just that. Remember, inflation isn’t inherently good or bad – it just is – constant and avoidable like taxes. 


We should strive for price stability as individuals and societies so that our standard of living doesn’t decrease over time. For more tips on personal finance and investing, follow Piggyy’s blog. 


״The secret of happiness, is not found in seeking more, but in developing the capacity to enjoy less״ - Socrates

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