Inflation has been rising. Government says it is now beyond 4% and many institutions are saying that we can expect inflation to breach the 5% mark very soon. The government already conceded that it will miss its inflation target — what they are not saying is they are missing the target by a mile.  The other day, I passed by the gas station to get some unleaded fuel and told the gasoline attendant to pump me P 1,000 worth of fuel. For a cheapskate like me, that’s a lot of money to part but we all need to spend, whether we like it or not.  As I was watching the pump, I was surprised to see that my precious 1,000 bucks was only able to buy a little over 17 liters of fuel! The nostalgic in me reminisced about the bygone years where pumping 500 pesos was enough to fill my gas tank – oh the glory days! It’s not just fuel that reduced my purchasing power, the same applies whenever we buy groceries, pay for bills, eat at restaurants and the like.

From my perspective, I don’t think inflation is just at 4 to 5% — and my wallet agrees with me.

Just what is inflation? Investopedia defines inflation as “the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.” In practical terms, it means that prices will rise according to the inflation rate over one year (per annum); if inflation is at 4%, a P100 per kilogram of Chicken today will cost P104 per kilogram next year.  Consumer Price Index or CPI is the barometer to which inflation is measured. In general, the consumer price index reflects changes in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The basket includes the most basic goods the average Filipino family consumes – general food items, utilities, oil, etc.

Alright, enough economic gibberish – no one wants to be reminded of the boring economics classes we had to take during our student days. Unfortunately, the ‘boring economics’ we all hate is pretty much the reason why we are all dumbfounded – trying to figure why the value of money in our wallets are shrinking.

Our knee jerk reaction to rising prices is always to be overwhelmed, and for a good reason. I’m not sure if this applies to other folks but here’s how I react whenever inflation is very high: disbelief, anger, frustration, blame, acceptance, indifference. I get shocked that prices goes up so fast so soon (like fuel); then I am annoyed as to why prices are going up such as external factors (middle east situation, financial crisis, etc.); I move on to being frustrated – frustrated at the government for not making the right responses, frustrated at myself for my microscopic income; then I blame the government for being inept and sometimes blame myself for missed business opportunities that would have cushioned the rising prices; I slowly begin accepting the harsh economic realities that life is as such and there’s really nothing I can do about it; finally, I move to being indifferent – after all, my ramblings will not bring prices down and I resign to the fact that there’s nothing I can do.

… to be continued.

I have often been asked the question: “who should handle the finances of the family?.” Is it the husband or is it the wife? The ‘politically-correct’ answer is ‘it depends’. You will hear many people; even so-called experts say that the handling of the money should be done by the spouse who is better at it. Our Filipino culture has actually been leaning towards the wife in the handling of the family finances. I grew up in such an arrangement where my late Mom handled the family finances; my late Lola also handled their finances and these two ladies were really good at such. So what am I writing about? There is a difference between handling the finances and controlling them. I am not trying to espouse chauvinism but my stand is the men should lead the control of the finances. Handling is largely about management, setting budgets, expending, balancing the check book and the like – this can be seen as a tactical directive. Control on the other hand is more on determining … Read complete blog at Act Like a Man

Posting a column I wrote for Moneysense Magazine.

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Beyond a mission, a cause

As I write this column, 2010 is about to end. 2010 is an eventful year indeed: a new President that ushered a new hope for the country’s future; a stronger and more stable Peso; a fantastic upswing in the Stock Market , accelerating in a rate we have not seen in a long time; and many more – both good and bad.

On a personal note, I am about to end a full 2 years since I have gone independent and not be affiliated with any financial services institution in my 22 years of professional life. My affiliations today have been limited to the Registered Financial Planner Institute Philippines (RFP) – an organization dedicated to the education of financial planners; and my church – Victory. Both affiliations have been largely influential in my professional, personal, and spiritual growth.

In 2010, I found myself doing more advocacies – speaking and teaching in small and large crowds from North Luzon down to Southern Mindanao and even out of the country. Venues has likewise been diverse, from corporate offices, to convention centers, hotel function rooms, university classrooms, churches and even in tables in fast food restaurants. Programs were varied: financial planning, investing, and entrepreneurship, among others. I also found myself working with the youth teaching them personal finance through a program called Blue Chip which we organized last summer and I was invited to volunteer to handle a class on entrepreneurship for a group of hybrid home school students. This year also gave me amazing opportunities collaborating with wonderful individuals that really inspire me like Cito Beltran, Francis Kong, Chinkee Tan, Paulo Tibig, Carlo Ople, Miriam Quiambao, Donita Rose and Eric Villarama, among others.

All these because I believe in a cause: the financial education of the Pinoys.  We all know that the biggest problem of the country is poverty. I used to think that the reason poverty is such a problem in the country was economic in nature; we lacked capital, poor distribution of wealth, undesirable macroeconomic foundations and the like. Then as I got a little older, I thought that our problems were political in nature; poor governance, dynasties, poor delivery of basic services and hostile environment for business. While the two factors I mentioned contribute substantially to the mess we are in, I began to see and accept that our problems are also social in nature. When I saw the way many handle their finances (myself included) and the way the nation saves (one of the lowest in Asia) one will see the root cause of our poverty issue. To make things worse, so many Filipinos are stricken by a poverty mindset that keeps them in bondage.

Such a herculean task should be made a cause by many. While there have been more and more advocates of financial education, we are drowned by the sheer numbers coupled by our limited exposure. The solution? We need to look at this as more than a vision and beyond a mission. We should embrace this as a cause. The Bible is full of encouragement and holds many answers to our questions, and yes – even our financial questions. We must be encouraged that even if this cause is a near impossible one, we just need to build on it, one advocate at a time.

Then he said to his disciples, “The harvest is plentiful but the workers are few. – Matthew 9:37, NIV.