Affordability

In the 2026 US midterm elections, “affordability” has evolved into a central political issue. That’s understandable because affordability describes the crippling squeeze of everyday living expenses that people feel.The Economist reports: “Consumer confidence in America has fallen to its lowest level since 2014, according to a survey by the Conference Board, a business lobby group. 

“Americans are feeling down regardless of income, age or political view. Higher prices, especially for food and fuel and elevated mortgage rates contributed to the gloom. The share of people saying that jobs were scarce rose.” 

That’s why affordability is front and center today. It covers not just prices, but also whether workers’ earnings are high enough to pay costs, making rosy macroeconomic numbers seem irrelevant.

For example, Americans have had consistent GDP growth and stock market increases since 2022. Inflation is about three percent. And yet the overwhelming economic experience for most Americans is this sense of deprivation.

An American economist said that essential costs have risen faster than inflation and more quickly than people’s wages… Key expenses like groceries, housing, health care and transportation have eaten up a larger part of Americans’ spending, leaving people feeling squeezed under supposedly good economic conditions.

Hmmm… sounds familiar? Up until our macroeconomic numbers tanked following the massive corruption scandal, our economic managers keep telling us the economy is doing good, we got an upgrade as an upper middle-income country and we should all be ecstatic.

But the reality on the ground is telling us that things aren’t as good as our officials claim.

JJ Moreno, country head of Sun Life Philippines, told One News their annual Financial Resilience survey covering a thousand respondents from different demographics delivered disturbing insights.

“This year’s Financial Resilience Index reveals a troubling trend: While most Filipinos continue to manage their day-to-day expenses, fewer feel confident about what comes next. The proportion of highly resilient households has fallen from 33 percent to just 19 percent, with 95 percent reporting that inflation has made it harder to cover their monthly expenses.” 

What’s particularly concerning are the short-term coping strategies.

The SunLife survey revealed that “rising costs are forcing difficult financial compromises: 22 percent are drawing down savings, 30 percent are reducing or skipping essential spending (food?) and nine percent have paused retirement savings. 

“The biggest jumps in living costs are in everyday essentials, with utilities affecting 99 percent, followed by transportation fuel and groceries at 98 percent, followed by groceries (98 percent), cooking fuel (97 percent) and health care (95 percent).”

When asked which expenses increased the most over the past six months, 83 percent cite groceries and food, followed by transportation and fuel (74 percent) and utilities (59 percent). 

The Sun Life data proves that inflation is no longer just squeezing the poorest demographic; it has aggressively punished the emerging middle class. This group — the professional, tax-paying, urban workforce — historically drives public political discourse, and their compounding anxiety should make our political leaders move.

Amplified by social media, the public directly links affordability to governance – citing corruption, importation cartels or a lack of agricultural support.

But wait… didn’t the BSP just release its business and consumer confidence surveys that showed growing optimism?

Actually, there is no contradiction between what SunLife and the BSP found out in their surveys. The BSP numbers are still in net-negative territory.

The BSP Consumer Confidence Index for the current quarter rose from -42.0 percent to -29.8 percent. While this is an upward trajectory, it means pessimists still heavily outnumber optimists.

The current month’s business confidence index also climbed but remained in negative territory at -10.9 percent (up from -20.3 percent).

In other words, the Sun Life survey captures the pain of the present, while the BSP survey captures a glimmer of hope showing that people want to believe the worst of the economic shock has passed. Present hardship is real (SunLife) vs. future hopes (BSP).

The more optimistic BSP respondents are probably optimistic about their own ability to find ways to make more money. It’s about diskarte, seeking additional income streams, side-hustles and new jobs to combat inflated cost of living. 

Reality bites. Bank of the Philippine Islands (BPI) economist Emilio Neri Jr. is seeing the start of a second inflation peak that will breach seven percent. That’s in line with BSP’s warning that inflation in September could be as high as 7.4 percent or the highest since March 2023. 

The really bad news is “unlike April’s fuel-driven spike, the second wave is likely broader and stickier, driven by food, labor costs and more,” Neri said. Unlike oil prices, these costs won’t easily go down.

So, the BSP data actually reinforces Sun Life’s findings regarding financial strain by showing how households are behaving defensively. 

The BSP reported that even with a lighter outlook, spending intentions for day-to-day household expenses declined (to 45.7 percent), borrowing intentions dropped, and savings prospects barely entered positive territory (1.3 percent). 

BSP itself summarized this not as booming economic confidence, but as households remaining “prudent” in managing their finances. Filipinos are heavily cutting back on non-essentials to brace for an expected year-ahead inflation hovering at the upper limit of the BSP’s four percent tolerance ceiling.

The surveys do not contradict each other. Sun Life captures the structural damage that inflation has done to family savings and resilience over the past year. The BSP captures a sigh of relief that the economic freefall caused by the Middle East crisis and domestic political friction appears to be stabilizing, until it is not. 

Tough times ahead. Can BBM lead a crisis government that will cut non-essential expenses like his multibillion confidential fund and the runaway corruption at all levels of government?

Our government must lead in a way it is not accustomed to: honestly, sensibly and responsibly. Even hope must be supported with visible improvement or that too will be lost.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco