Can Filipinos Afford to Work Remotely? A Study on the Afford Ability of Laptops Based on the Salaries and Cost of Living in the Philippines using Compounding

Abstract

Businesses are shifting to remote or hybrid setups due to employee demand. Since the trend is moving towards these setups, employees need to be able to conduct their work in their respective homes. With this, they need devices, such as a laptop, to accomplish their daily tasks. To live comfortably, however, they must set aside 20% of their salary for savings and 30% for their wants. Considering this and the average annual salary in the Philippines and the average annual cost of living, along with the average annual rate of salary increase and average annual inflation rate, the research focuses on the affordability of laptops, given their current prices and average annual price movements. Compounding was used to determine when an employee can purchase a laptop while keeping 50% for savings and wants. Annual compounding is used, and the compounded values for the cost of living and the laptop price are deducted from the compounded value of the salary. After calculations, the Apple MacBook Air is the most feasible, but it will take the employee 37 years to purchase the laptop while keeping 50% of one’s salary. Once achieved, the employee will be near retirement age, so it might not be fully utilized. It is recommended that the rate of salary increases be increased, and other businesses that offer laptops should maintain their prices or minimize the price increases to make them more affordable for employees. Benchmarking Apple is a viable option to see how they can control their prices.