Inflation in the Philippines has hit a 14-year record high, primarily driven by the crisis of food price increase. The country is facing a faster-than-expected rise in commodity prices, which could potentially lead to further rate hikes.
In times of such volatility, individuals may wonder if an instant cash loan is a suitable financial solution and if there are ways to benefit from this loan during an inflationary period.
This article aims to provide a review of the topic, exploring the implications of inflation in the Philippines, evaluating the advisability of instant cash loans, and offering strategies to navigate the inflationary wave.
Inflation in the Philippines
In January of this year, inflation in the Philippines soared to 8.7%, reaching its highest rate in 14 years. However, it experienced a slight drop to 8.6% in February.
The escalation of food prices has emerged as a pressing issue in the country. According to the Bureau of Statistics, the prices of housing, electricity, water, gas, and other fuels were significant factors contributing to the overall uptrend. In January, prices for this category increased by 8.5%, compared to 7% in December 2022.
Additionally, food inflation rose from 10.2% in December to 10.7% in January of this year, primarily driven by the higher prices of vegetables and fruits such as bananas and onions. The Philippines is bracing for the possibility of further rate hikes if commodity prices continue to rise at a faster pace than expected.
Economic Planning Secretary Arsenio Balisacan has warned that the lag effect of inflation could potentially impact the country’s overall economic growth, with GDP growth projected to be moderate, ranging from 6% to 7% this year.
Should I Get an Instant Cash Loan During Inflation?
An instant cash loan typically offers a fixed interest rate, which means that the interest you pay remains unchanged over the loan term. If you secure an instant cash loan before the onset of inflation, your interest rate will remain unaffected due to its fixed nature.
However, borrowing money during an inflationary period may lead to higher interest rates, resulting in increased interest payments.
Despite the potential drawbacks, borrowers can actually benefit from inflation. It is a fundamental principle of inflation that the value of cash decreases over time. As a borrower, the rising inflation allows you to repay the lender with less valuable money than what was originally borrowed.
Therefore, the advisability of obtaining an instant cash loan during an inflationary period depends on your individual needs. If the rising cost of products, groceries, and daily necessities exceeds your budget capacity, an instant cash loan may provide a temporary solution to address your cash flow problems and cover unexpected expenses. Once your financial situation stabilizes, you can gradually repay the loan.
How to Make the Most of an Instant Cash Loan During Inflation
Create Multiple Sources of Income with Side Hustles
One of the best strategies for combating inflation is to diversify your income sources through side hustles. Relying solely on one source of income puts you at risk of financial instability if that source is disrupted or lost. Even if your current full-time job provides a high income, earning extra money through side hustles can create a safety net.
Consider exploring freelancing opportunities, writing articles, tutoring, providing consulting services to enterprises, renting out surplus property, or even starting your own business.
In cases where you need capital to purchase necessary documents, equipment, or other items for your side hustle, instant cash loans can offer a valuable financial solution. With diverse loan limits, low interest rates, and extended repayment terms, instant cash loans can provide the necessary funds to support your endeavors during the inflationary period.
Prioritize Paying Off Existing Debts
Debt can be a heavy burden, especially for individuals with limited incomes. During inflation, it is crucial to prioritize paying off all existing debts, including credit cards and high-interest loans. The diminishing value of cash caused by inflation works in your favor when it comes to debt repayment.
By concentrating your efforts on paying off debts during this period, you will essentially be repaying a lower value than the initial amount borrowed.
Establish an Emergency Fund
Financial emergencies can arise at any time, particularly during periods of inflation. Examples of such emergencies include serious illnesses or unexpected accidents involving family members, car breakdowns, or unanticipated work-related expenses. Setting up an emergency fund can help you cope with these unforeseen circumstances. The amount you need to set aside for your emergency fund depends on your expenses and risk tolerance, but a general rule of thumb is to have enough funds to cover six months’ worth of living expenses. If you find yourself in need of instant cash during this inflationary period, it is essential to select a reputable and high-quality lender that provides safe and transparent loans.
Conclusion
In conclusion, the current inflationary period in the Philippines demands careful financial planning. While instant cash loans can provide temporary relief for cash flow issues and unexpected expenses during inflation, it is essential to consider the potential risks and benefits. By diversifying income sources through side hustles, prioritizing debt repayment, and establishing an emergency fund, individuals can navigate the challenges posed by inflation more effectively.
Crezu Loan, a reputable financial lending institution with extensive experience in the Philippines, Russia, and Vietnam markets, can offer valuable guidance on instant cash loans tailored to your financial situation. With low interest rates and extended repayment terms, Crezu Loan aims to alleviate financial pressures and provide safe and transparent loans for individuals during this inflationary period.
