Rising costs leave Filipinos with fewer financial choices, report finds

Filipinos are finding ways to stretch their money as the cost of everyday life rises, but there may be a limit to how much more households can cut without putting their longer-term plans at risk.

That was among the issues raised during EastWest Ageas’ media briefing on September 29, where the insurer presented its 2026 PURPLE Report on how Filipinos are navigating financial pressures while trying to protect what matters most to them.

The study, conducted among Filipinos aged 22 to 55 in Metro Manila, Broad Luzon, Metro Cebu, and Metro Davao, found that financial preparedness is not simply a matter of financial literacy, planning, or discipline. The choices available to households also shape how prepared they can be.

The numbers show the tension.

Nine in 10 Filipinos are concerned about wealth-related issues, including rising prices and inflation, lack of savings or emergency funds, and unstable or insufficient income. Eight in 10 prioritize their family’s future and well-being, including children’s education and the prospect of becoming financially dependent in old age. Six in 10 are concerned about high medical and hospitalization costs, serious or critical illness, and inadequate health insurance.

But those priorities are competing with the cost of getting through the present.

Compared with January and February 2026, 43% of respondents said their household’s financial situation was worse in the second quarter, while 42% said it was about the same. The report also cited April increases of 13.7% in rice prices and 21.4% in transport costs, with inflation among lower-income households reaching 8.5%.

More than half, or 56%, said they were prioritizing basic needs and cutting back elsewhere. Another 52% were closely monitoring their expenses, while 42% were reducing spending on non-essentials. Nineteen percent were taking on additional work or another source of income, while 14% were using savings for daily or recurring expenses.

The report describes the situation as a narrowing of choices.

“Filipinos are not deciding what to give up, they are deciding what they can no longer afford to lose,” it said.

EastWest Ageas president and chief executive officer Sjoerd Smeets said more accessible financial knowledge and protection can help younger Filipinos plan for themselves and their families.

In a statement released after the briefing, Smeets said, “With insurance penetration climbing to 1.96% last quarter, we’re seeing that more Filipinos, particularly millennials and Gen Zs, consider financial planning for themselves and their families.”

He called for continued collaboration between government and private insurers on financial literacy and empowerment programs, saying that making financial knowledge and protection more accessible could help raise a generation of financially aware young Filipinos.

During the media meet, Bangko Sentral ng Pilipinas Deputy Governor Bernadette Romulo-Puyat discussed the central bank’s efforts to improve financial literacy and make financial services more accessible.

The question of access becomes particularly important when households face an emergency.

The PURPLE Report found that savings are used to fund 83% of medical costs and 79% of situations in which a breadwinner is unable to provide.

“When a single instrument does a lot of work, it is not preference – it is the absence of an alternative,” the report said. “A household with real alternatives spreads the load.”

That means savings are being called on to cover very different kinds of financial shocks, from medical expenses to the loss of household income.

The report describes a “ladder of support” that starts with a household’s own salary, savings, and investments. When those resources are exhausted, families may turn to relatives, remittances, or friends, followed by institutional support such as insurance, HMO coverage, and government assistance. Borrowing sits at the bottom of the ladder, described in the report as a last resort when other sources of support fall short.

Meanwhile, households are already making significant changes to their daily spending.

The report found that Filipinos are preparing more meals at home and looking harder for deals and discounts. They are also cutting back on or delaying leisure and non-essential spending, choosing cheaper or generic brands, switching to more affordable plans and services, and using public transportation instead of ride-hailing or private transport.

But cutting back does not necessarily mean creating more room for the future.

The report said healthcare and medicines remain among the expenses Filipinos are least willing to compromise on. Adjustments tend to fall on more flexible categories, but these changes often do not create additional room in the budget. Instead, they help households keep pace with rising costs elsewhere.

That leaves Filipino households facing a difficult balancing act: protect what they need today while trying to prepare for expenses they know may come tomorrow.

The pressure also looks different depending on where people are in life.

The report identifies several household realities, including single young professionals relying primarily on their own income and savings, married couples balancing current family needs with future plans, single parents carrying financial responsibility with fewer fallback options, dual-income households without children that have greater capacity to save and invest, and the sandwich generation supporting both children and aging parents.

Despite those differences, the report’s conclusion is relatively straightforward.

“The challenge is not a lack of willingness to plan, save, or protect but a growing scarcity of choices,” it said. As those choices become more constrained, the report argues that institutions have a greater role in “making better choices possible.”