Inflation squeezes Filipinos' finances, Sun Life study finds
Rising living costs are forcing more Filipino households to sacrifice long-term financial security in order to cope with immediate financial pressures, according to the latest Financial Resilience Index released by Sun Life Philippines.
In a statement on Thursday, June 11, the insurer said its latest study found that the proportion of Filipino households classified as having “high” financial resilience plunged to 19 percent this year from 33 percent in 2025, while those in the “moderate” resilience category increased to 64 percent from 56 percent.
Sun Life’s Financial Resilience Index 2026, conducted in April across six Asian markets, also showed that 95 percent of Filipinos said inflation has made it harder to cover monthly expenses, underscoring the growing strain from rising prices.
“These findings reinforce why empowering Filipinos to take control of their financial journey matters now more than ever,” Sun Life Philippines Country Head and Chief Executive Officer (CEO) JJ Moreno said.
“As Sun Life marks Financial Independence Month this June, we reiterate our commitment to helping Filipinos become more financially resilient,” Moreno added.
The report showed that while most households continue to manage their day-to-day finances, confidence in their financial future has weakened significantly.
Only seven percent of respondents said they feel very financially secure, down sharply from 20 percent last year, while just 24 percent said they could sustain themselves for more than six months without income or external assistance.
High financial security likewise dropped to 36 percent from 66 percent a year ago, while confidence in meeting long-term financial goals declined to 48 percent from 64 percent.
The survey found that rising prices are increasingly forcing consumers to make difficult trade-offs.
About 64 percent reported reducing non-essential spending, while 30 percent said they had reduced or skipped essential spending. Another 22 percent have drawn down savings, while nine percent have reduced or paused retirement savings contributions.
Managing day-to-day expenses has become the top financial priority for 54 percent of respondents over the next 12 months, ahead of saving, investing, or long-term planning.
Among household expenses, utilities affected 99 percent of respondents, followed by transportation fuel and groceries at 98 percent each, cooking fuel at 97 percent, and healthcare at 95 percent. When asked which costs increased the most over the past six months, 83 percent cited groceries and food, followed by transportation and fuel at 74 percent and utilities at 59 percent.
The study also found that financial preparedness remains limited. Only 47 percent said they feel prepared for further increases in the cost of living, including just seven percent who feel fully prepared.
Sun Life said financial literacy remains a key differentiator between resilient and vulnerable households.
The report showed that 66 percent of Filipinos rate their financial literacy as basic, low, or very low. Consumers with higher financial literacy were 56 percentage points (ppts) more likely to feel confident about their household financial situation and 45 ppts more likely to feel optimistic about their financial future.
Only 18 percent of low-literacy respondents felt prepared for further increases in the cost of living, compared with 71 percent among high-literacy respondents. High-literacy consumers were also nearly four times more likely to feel prepared for rising living costs.
Long-term planning likewise remains limited. The survey found that 61 percent of respondents either have no financial plan or plan only up to one year ahead, while only 22 percent have financial plans extending beyond five years.
At the same time, generative artificial intelligence (AI) is becoming a mainstream financial planning tool.
More than half, or 52 percent, of respondents said they use generative AI for financial advice at least sometimes, including 20 percent who use it every time or most of the time when making financial decisions. About 65 percent expect their use of the technology to increase over the next 12 months.
Despite the growing use of AI, respondents continued to value human financial advisers, particularly for more complex and long-term financial decisions, the report noted.