Term of the Day: Inflation
Inflation is generally measured in terms of a consumer price index (CPI), which tracks the prices of a basket of core goods and services over time.
In the Philippines, as of January 2017, inflation is 2.7% matching DOF's internal forecast which is within the target range of 2% - 4%. Source: http://www.dof.gov.ph/index.php/dof-expects-inflation-rate-within-government-target/
Because of inflation, people invest. Assuming the 2% inflation, a savings account that was worth $1,000 would be worth $903.92 after 5 years and $817.07 in 10 years assuming that you earn no interest rate on the deposit. (Interest rates in the banks usually ranges from 0.25% to 1% which is lower compared to the inflation rate of 2%). That's why it's important to invest in assets that can be reasonably be expected to yield at a greater rate than inflation. (Before doing any investments whether in stocks, bonds, real estate, business etc., due diligence must be done.)