Disclaimer: This article is written with the circumstances that are happening in my country, the Philippines and this is my personal opinion and certainly not a financial advice but just a conversation starter.

After a year of lockdown and vaccines finally popping up, a lot of country have been "going back to normal", as they term it, like Israel, New Zealand and Australia. Almost everybody in my country is feeling the toll of being locked involuntarily at home for almost a year now and everybody just want to go back to their old lives where we can freely eat out, travel and just basically go out whenever we want to.

But we must remember, a lot can happen in a day, most certainly a year. We are in quarantine for more than a year now and if we're locked in our homes for that long, we might become a bit ignorant when we finally get the chance to get out. Along with all the health protocols that are in place and will probably stay for quite some time, Covid-19 have serious impact on the financial aspect or living expenses as well, and very rare that people recognizes this or even know this.

I thought of starting or sharing a conversation of what we may expect financially if things ever go back to normal since it's been a topic that I came across with at work. We were discussing of how things would be, if things would suddenly be okay and the pandemic would be gone in a snap. After discussing goals and plans and not a shocker but most of us would really get on a plane as soon as we can all go out! HAHAHAHA. We get to talk about how Covid-19 changes the way people spend over the past year and how would they spend it after the pandemic.

These are some of the things that we have discussed:

Everyone will be shocked at how high prices would be.

The latest inflation rate data available for the Philippines was released last February 2021, which was at 4.7%, the highest since the 4.4% recorded in January 2019. This is mainly caused by the increase in the pork prices and still expecting to rise up to 450 per kilo.

For full news article: https://www.rappler.com/business/inflation-rate-philippines-february-2021

You don't have to fully understand inflation to know that the prices of things are getting higher, especially necessities. We might not feel it because brands keep on giving sales for some items, because no one will buy their product if they won't put it on sale. Brands mainly do this to achieve breakeven. But if you take a deep dive, all of those items are unnecessary (let's be honest for discussion purposes, okay? You don't need another pair of shoes or another cute shirt) but the necessary ones keep on getting higher! Have you noticed a sale for alcohol? Face mask? Food in general? No. They just keep on getting higher.

Lately, when going to groceries I'm really shocked at how P2,000 (around $40) is not enough to buy even the bare necessities when before we can survive for 2 weeks on it. Even in the wet market, P1,000 was enough before to cover our whole weeks plan but now, we range for almost P3,000. That P3,000 budget before covers everything, we even had biscuits to bring to work and we all have packed lunch.

The most alarming thing for me is we have this concept of "pandemic naman eh" (we're in a pandemic) that we shrug this slow incremental prices. If we buy groceries and it's beyond the limit that we had before we have this thinking, oh it's the pandemic, it's okay for them to rise their prices because they're incurring extra costs during this pandemic. But believe it or not, most likely the prices will either go up or remain the same.

So, don't be surprised if students will ask for additional allowances once things go back to normal. Don't be surprised to if you're working and you would need to adjust your daily budget because most likely, when we get the chance to go out everyone will complain at how high living expenses would be. Along with our government debt that keeps piling ang piling up, I think we can expect a further inflation in the coming years.

Here is the bloomberg article on the expected higher inflation rate in the Philippines: https://www.bloomberg.com/news/articles/2021-03-05/philippine-inflation-quickens-further-amid-higher-food-costs

People will spend more in leisure activities.

This will not be a surprise, people will eat out in their favorite restaurants, buy the bag and shoes they always wanted to buy, get on a plane and just runaway. I believe that a lot of people will be spending in leisure activities once we finally get the chance to go out. I also like to think that there would also be discounts and sales offered by brands to entice people to buy these kind of products.

This is totally understandable because we were basically forced down to live in simpler ways during the pandemic. We don't eat out much, we just buy what we really need and we just don't spend money in unnecessary things because we really have no idea when will the pandemic ends. The last thing we need right now is somebody telling us to not spend our money in the activities we missed out during the quarantine. Again, I will reiterate, it's fine to do all of these things, it's our choice and most likely, I would do it too ! hehe. But what I am saying is that be weary of we spend our money.

I told you earlier that the unnecessary things will drop prices, because brands need to breakeven with their costs, they need to recover the cost they incurred for their product and they are willing to drop their prices to make it happen, with minimal or no profit at all. Yet the necessary products keep on rising in value because of the inflation and probably because of the limited supplies. We really need to think first before spending because we can really have a hard time if we don't plan out our expenses.

I really would love your thoughts about this and comment down if you have points that I have missed out.

I hope this helps you in any way it can!

See you around. 🌤