Some Anti-Valentine News: Misery rising for Filipino consumers

Aneth Ng-Lim

Posted at Feb 13 2023 03:28 PM

Did you know that there is such a thing as a Misery Index? 

Market analysts use many economic indicators to determine how a country is doing, from inflation to GDP to GNP, you name it and there is an acronym and a formula for it. Back in December, I discovered that one of these indicators is a tracker called the Misery Index.

The formula is actually quite simple: you take the consumer price index inflation and add unemployment rates. Inflation is defined as the rate of increase of prices over a given period of time. You may understand it better when I say that inflation is the cost of living in a country. So when your wallet is hurting, it means inflation has gone up, and your income is not catching up. As for unemployment, that’s the number of adult persons that are not registered as employed.

Back in October, with employment levels quite healthy, the unemployment rate dropped to a 3-year low at 4.5 percent. But the misery index still looked miserable due to inflation hitting 7.7 percent year on year. Putting the simple formula to use, this resulted in a Misery Index of 12.2 percent, or the highest in 13 months.

And sorry, but it actually gets worse as inflation continues to peak. We ended 2022 with a Misery Index of 12.4 percent, the highest in 15 months because of 8.1 percent inflation. January is not looking any better because inflation peaked at 8.7 percent. Some people don’t even care for these numbers – they quip that the unbelievable hike in the price of onion was enough to make them miserable.

All these may have put you off a romantic mood for Valentine’s, but the point I hoped to make is for you to find time to show some love for your wallet and savings. You may not be able to change the national Misery Index, but you can manage your own money to better cope with inflation. Here are some tips:

#1 Cut back on the wants, focus on the needs

No one wants to hear this advice but now is not the time to indulge your wants. Say no to a bigger TV, a new smartphone, or even trying a new buffet restaurant. Instead, prioritize spending for your needs, and find a way to cut back on those too. For groceries, see if buying in bulk will give you savings. If you’re renting, ask your landlord for a break in rent increase. The key is to check where you can reduce expenses in your daily life, and make it a habit.

#2 Try your hand on reselling 

If we look hard enough, we will find things at our home that we do not need or regret buying. Time to organize all those white elephants and start selling them off. With social media, this has become easier. You can try Carousell or even just use your Facebook, Instagram or Twitter accounts. Whatever you make should be a welcome boost to your pocket money, or even better put all that in a savings or emergency fund. With the Misery Index still rising, that may come in handy sooner than we would all like.

#3 Never buy without price checks and vouchers

Before you click buy or hand over your money or credit card, make sure to do a price check or promotions check. Can you get it cheaper somewhere else? Will your credit card offer rebates when you shop on certain dates? Is the store holding a limited sale next week? If you can double dip on discounts, make sure to do so. Patience is not only a moral virtue; it can be pretty rewarding too for the wallet of the informed consumer.

#4 Shop for better returns for your money 

One good news in the middle of all this misery is that interest rates are up. Not so good news for the borrower, but welcome news for the saver. If you have savings or investments, check to see if you are getting good returns. Ideally, your returns should be higher than inflation so your money does not lose “spending value” over time. Shop for healthy returns that are within your risk appetite. Don’t just look at banks – consider the savings plan of PagIBIG, cooperatives that you know and trust, or even blue chip stocks that are trading at a discount. 

#5 Good time to ask for a raise

If you are employed, consider asking your boss for a raise to meet the higher cost of living. Of course, it goes without saying that you must have a good track record before you even start asking. While employers also feel the pinch from inflation, they also want to keep their good workers and the more people who raise this issue, the more they will seriously look into it, and work on options.

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With misery rising, it’s also the best time to practice saying no. No to small luxuries like milk tea every afternoon, no to expensive wants like wireless earphones, no to people borrowing money, no to lifestyle upgrades. All these Nos will help you say Yes when things get better and good opportunities come your way, like a great deal on a house, or a car, or guaranteed generous returns on investments.


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