Retirement is supposed to be a time to enjoy the fruits of decades of hard work. But for many Filipinos nearing their golden years, rising inflation is making that dream feel uncertain. Prices of essentials—from rice to fuel—continue to climb, eroding the value of retirement savings faster than many expected.
“Unlike younger workers who can wait out a market downturn, retirees don’t have the luxury of time,” said Christopher Cervantes, a Registered Financial Planner (RFP), in an interview with Financial Adviser PH. “When you’re making regular withdrawals from your retirement fund during high inflation, the risk of running out of money becomes very real.”
The Hidden Cost of Rising Prices
History offers reminders of how inflation can disrupt financial security. Cervantes points back to 1974’s global oil shock, 1984’s political instability in the Philippines, and the 2008 financial crisis. Each period left retirees anxious about whether their savings could last.
Today, inflation in the Philippines has again reached levels that squeeze household budgets. “If those who are still working are worried, imagine the stress of retirees who depend entirely on their retirement portfolio,” Cervantes said. “Every peso they spend now buys less, and yet they still need to withdraw regularly to cover expenses.”
This situation is compounded by the reality that a declining market erodes portfolio values. With withdrawals continuing, retirees are often left with fewer assets to benefit when markets eventually recover.
Control What You Can: Spending Patterns
The first step, according to Cervantes, is to focus on what retirees can control. That begins with analyzing spending patterns. “It’s not enough to list your current expenses,” he explained. “Look back at least six months of bank and credit card records. That way you can see the actual trend of your spending and the true impact of inflation on your household.”
He added that retirees might be surprised to learn their personal inflation rate is higher—or lower—than the national average. Knowing your own spending habits allows you to tailor adjustments more effectively.
Once the numbers are clear, retirees can explore cheaper alternatives:
Groceries: Compare stores and track where discounts are offered.
Insurance: Shop for more affordable house or car insurance.
Transportation: Reduce fuel use by driving less or combining errands.
“These small adjustments accumulate,” Cervantes said. “Cutting even a few thousand pesos a month can make a retirement fund last longer.”
The Burden of Debt in Inflationary Times
Cervantes also warned about the danger of carrying debt during inflation. Rising interest rates mean higher borrowing costs, draining retirees’ limited resources.
“If your budget allows, pay off your debts,” he advised. “Holding a mortgage may be manageable, but taking on new loans in this environment is counterproductive. Interest rates will eat into money you should be using for essentials.”
Don’t Let Fear Drive Your Decisions
Retirees, more than any group, feel the pressure of seeing their savings shrink in value. The instinct is often to panic—either by withdrawing more cash than needed or by abandoning investing altogether. But Cervantes believes discipline and perspective matter most.
“You can’t control inflation, but you can control your response to it,” he said. “Focus on living within your means and protecting what you have. The adjustments may be difficult, but they’ll give you peace of mind that your money will last.”
The Bottom Line
Rising inflation is testing the resilience of retirees across the Philippines. While the economic environment is uncertain, Cervantes emphasizes that retirees are not powerless. Careful budgeting, eliminating unnecessary expenses, and reducing debt can make a retirement portfolio stretch further.
“Retirement is not just about the size of your savings,” he concluded. “It’s about how wisely you manage every peso in the face of challenges like inflation. If you can adapt your spending today, you can still enjoy the security and dignity you worked hard for.”
