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[Fin Talk] Personal Finance: Dealing with the Delta Threat

By Arlyn Tan

The delta variant ( B.1.617.2) is reported to be 40-60% more transmissible than the alpha variant. Its viral load is 1000 times higher, rendering it the faster variant so far. Apart from having the high risk of hospitalization, the other complications are hearing impairment, severe gastric upsets and blood clots. It was first detected in India and has spread rapidly across Southeast Asia.


The Philippine government approved the implementation of GCQ with Heightened Restriction from July 30 - August 5 and ECQ from August 6-20. Lockdown measures in Manila to ensure that the medical system avoids overcapacity with the possible increase of cases. According to the OCTA Research Group, if there is no intervention, the average daily spike will be from a low of 2,000 to 5,000 cases per day. As of July 30,2021 ,there are 8,562 new infections and 145 deaths. Based on the reports of DOH, Delta had sickened 216 Filipinos.


Economic Planning Secretary Karl Chua says that the 2 weeks lockdown could cost the economy 210 billion pesos. On July 30, the Philippine Stock Index tanked 3.6% on Friday. With the second lockdown for the year and with only 7.84M individuals or 7.2% of the population being vaccinated, the target of 6.0-7.0% economic expansion will become a challenging feat for our country’s economic managers.

What will the ECQ locked down mean to the Filipinos?

  • Employees and Entrepreneurs. In the March 2020 lockdown, the government grouped businesses into 3 categories based on mobility restrictions and capacity: allowed sectors, partially allowed sectors and the not allowed sectors. The strict mobility restriction caused the contraction of personal and business income streams which led to decreased consumption.


Companies with work from home arrangement for employees allowed their workforce to save more because of decreased transportation, food, and personal expenses. However, the struggle is real for those who experienced “no work & no pay.”


It is important to check the liquidity levels of families and enterprises. Managing expenses and income streams are vital to ensure sustainability in 2 scenarios: lockdown based on schedule and with extension. Continue to improve and implement back up plans by redesigning your work processes, purchase of insurance, and finding alternative sources of liquidity.


  • Investors. The equities had experienced 2 declines from July 23 to 30 because of weak market sentiments. These resulted from the revision of the Fitch Rating outlook on Philippine credit rating from negative to stable and the fear that the second wave of infection becomes uncontrollable.


Investors of the Philippine equities may experience another bumpy ride in the next few weeks. For the investors who would want to stay in the sideline, it is best to park funds in short term funds like money market funds. For those with higher risk appetites, entering in the low 6,000 levels can give good returns in 1 or 2 years.


The Philippine banks and financial institutions had launched feeder funds that are peso denominated but invested globally. The concentration on Philippine assets can be diffused by having these types of funds in your portfolio.


  • Consumers.

In a Businessworld poll, the July headline inflation is estimated to be 4%. This is within the 2-4% target of the central bank. Headline inflation refers to the change in value of all goods in the basket. Core Inflation excludes the food and fuel from the basket of goods.


Knowing the inflation numbers would give you an idea on the direction of consumer prices and the purchasing power of your peso. The higher the inflation, the lower purchasing power of the peso and higher cost of living will be. By preparing an emergency fund and a second source of income stream, one can be able to handle the rise in the prices of goods.


Dealing with the impact of the delta to our personal finance will require us to reflect on what we have done in the past, and what worked well. Take this time to crunch the numbers in your budget, income streams, loans, insurance and investments. Schedule a meeting with your personal finance expert to check how the lockdown can affect your plan. Despite the uncertainty, stay calm and mine opportunities in the midst of uncertainties.














Arlyn Tan is a Strategic Wealth Consultant. She helps individuals and organizations on how to maximize the value of their money through risk, health & wealth management. Her mission lies in making sure that clients achieve 3 things. First, they reach their milestones on time with sufficient resources. Second, they protect them from the impact of economic losses secondary to unexpected events. The third and most important is that they enjoy meaningful and balanced lives.


LinkedIn/Twitter: Arlyn Tan

FB/IG: @pinnaclefinlitcoachph

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