Inflation, E-Wallets

If inflation were a villain, it would be Count Dracula — because it sucks the lifeblood out of consumers’ purchasing power. For 2026, Vlad the Inflater dug his fangs deep into Filipino wallets and went turbo.

Last week, the Philippine Statistics Authority (PSA) reported headline inflation at 7.2 percent for September 2026. This matches the first peak in April, when it was the highest since March 2023.

Peeking into the components of the consumer price index (CPI), it was no surprise that the fuel hikes last month contributed heavily to the hefty gain. There were, however, two types of surprises in the inflation numbers.

The impact of more than a month’s worth of rains and resulting floods in August finally made their effects visible on the CPI via higher vegetable prices in the month after. This type of shock tends to be temporary as both farmers and importers will act to fill the gap.

The other surprise is in the core (excludes energy and food) items.

Housing-related items picked up faster than expected. These are items such as rent, carpentry, plumbing, and any services or goods used in maintenance or repair of a house.

Looking at the numbers at face value, there is an implied factoring of inflation expectations into housing. In other words, landlords and skilled trades workers may have begun to ask for additional compensation for the inflation effects today and for next year, so they do not lose purchasing power.

This is known as the second-round effects of inflation.

Speaking of wallets, I encountered an inflation question on e-wallets. The question was whether inflation presents a risk to e-wallet users.

Inflation is not a fussy villain, so it does not matter whether it is a leather wallet or an e-wallet; inflation will affect consumers. The question is whether your purchasing power is inflation-protected. If garlic is kryptonite to Dracula, there are also countermeasures to inflation.

For example, the peso by the end of September had weakened by 7.7 percent against the US dollar based on data from the Bangko Sentral ng Pilipinas (BSP).

Theoretically, consumers with sources of income based in USD can offset the inflation. Many Filipino consumers are beneficiaries of overseas Filipino worker (OFW) remittances, so to a degree, some sectors of the consumer economy are hedged.

The other countermeasure is encouraged by the BSP — save (and invest).

The Bureau of the Treasury recently issued Retail Treasury Bonds with a gross rate of 6.875 percent and a maturity of 2.5 years. The secondary market for long-term government bonds has rates above 7.00 percent. It may not be a perfect offset. Ideally, consumers and income earners would want complete inflation protection, but you do what you can with what you have.

Saving and investing are hard but necessary amid the threat of inflation. Many would push back and say, “I cannot afford to buy bonds or time deposits.” Yes, the barrier to direct entry may be steep for some, if not most, consumers. However, you can always buy funds, which invest in financial instruments like bonds. And these are available in your e-wallet and digital banks.

Consumers can fall prey to the Dracula of inflation if they are not aware that their consumption is based on real income, which adjusts for inflation, and not just income. To protect your real income, consumers need to learn how to be investors also.

The “consumer-investor” today is empowered by e-wallets and digital banks and has no reason to tremble in the dark and wait for inflation to suck their purchasing power. Today, these financial technology solutions, by offering financial products and choices, allow anyone with a smartphone a means to manage inflation risk.