‘Rising living costs erode Pinoys’ financial stability’

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June 13, 2026 | 12:00am

MANILA, Philippines — Soaring living costs force more Filipinos into short-term coping strategies, from cutting essential spending to pausing retirement contributions, to survive immediate pressures at the expense of long-term financial stability, according to Sun Life Philippines.

In Sun Life’s Financial Resilience Index 2026, the proportion of “high” resilient consumers has sharply declined to 19 percent from 33 percent last year, pivoting to more vulnerable financial positions.

Meanwhile, the “moderate” resilience group increased to 64 percent from 56 percent.

Classified highly resilient consumers feel that they are financially well-secured, planning more than five years ahead, are well prepared to cope with financial emergencies, have good self-perceived literacy around personal finances and maintain high confidence in meeting long-term financial goals.

Sun Life Philippines country head and CEO JJ Moreno said the study “reveals a troubling trend: as rising living costs intensify, more households are sacrificing their long-term financial security to cope with immediate pressures.”

“While most Filipinos continue to manage their day-to-day expenses, fewer feel confident about what comes next,” he added.

At the same time, only seven percent of Filipinos said they feel very financially secure, while just 24 percent reported they could sustain themselves for more than six months without income.

High financial security likewise plunged to 36 percent from 66 percent last year, signaling fewer households feel equipped to withstand disruption.

About 95 percent of surveyed respondents said inflation made it harder to cover monthly expenses, with essential expenses driving the squeeze, such as utilities (99 percent), transportation fuel and groceries (98 percent), cooking fuel (97 percent) and healthcare (95 percent).

From January to May, inflation averaged 4.5 percent, breaching the government’s target band of two to four percent, amid higher fuel costs due to the Middle East war, government data showed.

To survive, Filipinos are squeezed to make short-term adjustments, with 64 percent reducing non-essential spending, 22 percent drawing down savings, 30 percent cutting or skipping essential spending and nine percent pausing retirement savings.

For Filipinos, managing day-to-day expenses is now the top priority for 54 percent of respondents over the next 12 months, ahead of saving, investing or long-term planning.

However, Sunlife reported that only 22 percent have financial plans extending beyond five years, while 61 percent have no financial plan or only plan up to one year ahead.

In addition, 66 percent of Filipinos classified their financial literacy as basic, low or very low.

“Yet there is reason for optimism. We continue to see growing adoption of financial tools and resources, including generative AI (artificial intelligence), which 52 percent of Filipinos now use for financial guidance,” Moreno said.

The figure is up from 19 percent who cited using GenAI as a source of financial information.

Sunlife said Gen AI usage continues to accelerate, with 65 percent anticipating their usage to rise further over the next 12 months.

Conducted in April, the report covered Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Vietnam, with 6,000 total respondents.