How to Beat Inflation in the Philippines

by Gily Tenorio on October 19, 2011

in Inflation


Inflation is real and constantly changing. It secretly decreases the value of your money. You cannot avoid it or even control it because you don’t have any power to do so. It is like your punching an invisible enemy, you cannot see it but you can feel it and you are hurt by its effects. You will hear classic stories of your parents or grandparents telling you they can buy a bottle of Coke for just 1 cent. You’re amazed with that story because it is unbelievable but you are convinced it’s true.

Today, we cannot buy a bottle of Coke for that amount of money, it is not true any more in our current time. The price of commodities, including Coke, has been increasing each year because of inflation. As I said earlier, you and I cannot stop the continuous increase of inflation but the good news is we can beat its adverse effects on our finance.

More on Inflation in the Philippines

Currently, the inflation for September 2011 in the Philippines is at 4.8% according to the source from National Statistics Office (NSO). It is slightly higher by 0.1% from August’s inflation may be because of the several typhoons that hit the country causing food prices to went up because of destroyed farmlands and fisheries. Inflation is measured using Consumer Price Index or CPI. It is an index that tells how products ans services are changing as the time goes by.

Not only the prices of commodities are increasing even services are also changing. For example, the jeepney fare is steadily going up every year since oil price has been rapidly increasing in the past years. All of us are affected by inflation since we are still living. Maybe you are thinking what factors affect inflation? One of the biggest factors that causes inflation is the supply and demand for products and services that people commonly used everyday. Another reason can be the interest rates that put on by banks and other financial institutions on loans made by companies and entrepreneurs.

How to Beat Inflation

The only way to beat inflation or fight its effects is through investing that will give you return more than the inflation rate. Since inflation is more than the interest of savings account (4.8% vs. 0.5%) and other bank deposit products, it is not a good place to put your money to combat inflation. Time deposits can be one good choice but sometimes inflation rate is higher than the time deposit interest rates for most of the banks in the Philippines.

I found out that there are other options you can make to fight inflation. Investing in mutual funds, bonds and stocks is one of the best alternatives you can do. However, there is a risk of losing money when you sell or redeem it when the economy is down. If you have the capacity to make or produce your own food, it is a great way to fight inflation since you do not need to buy from supermarkets your daily consumption. If you don’t buy, you will not affected by inflation.

If you have a vacant lot or an extra space to plant some vegetables of fruit-bearing trees, you should do it. In addition, you could also raise chickens or other livestock so you don’t need to buy your meat since you can produce your own for your family’s consumption!

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