Philippine Financial Literacy Advocacy Report 2013
This article is posted under General Information.
Back in 2008, I published a special research on The State of Financial Literacy in the Philippines.
Five years later, let’s take a look at what has changed since then.
Below, I’ve embedded the Financial Literacy Advocacy Report (FLARe) of Sun Life Philippines when they did the Study of Lifestyles, Attitudes, and Relationships (SOLAR).
And then after it, I share my thoughts on some of the facts they found in the study.
Check yourself against these findings, and see how you fare against the respondents when it comes to their financial quotient score.
Of Optimism and the Filipinos
The report says 87% of Filipinos are optimistic about their financial future, which is good because having a positive outlook helps you become more open to taking risks and seizing opportunities.
Meanwhile, health, safety and job security are the top personal worries of Filipinos. For families, their biggest financial worries are children’s education, food and family health.
Health is a big worry in both cases, and personally, I’ve found that aside from living a healthy lifestyle, having both short-term and long-term health insurance takes away much of those worries.
The Financial Literacy Paradox
Only 8% got a score above 80% in the financial literacy quiz given to them. Most Filipinos have good knowledge on the financial concept of investments, but lack understanding in the concept of a healthy budget and inflation.
More importantly, the study showed that only 49% of Filipinos put money into their bank accounts every month. And among those who do, they only save an average of 6% – which is below the minimum suggested 10%.
I recommend saving at least 30% of your income every month, so as to be at par with most South East Asian countries who save between 20%-50% of their income according to my personal research.
Of Priorities and Preparation
Most Filipinos want to open a business. Unfortunately, in my opinion, most of them wait to have business capital first before doing any action.
If you want to be an entrepreneur, the first step is to learn the proper mindset and create a business plan – two things you can and should do before looking for business capital.
Also, the report says that only 1 out of 10 Filipinos would invest to help them achieve their financial goals. Around 8 out of 10 Filipinos believe that putting money in a savings account is still the best way to prepare for the future.
Personally, I believe that only your emergency fund should be in a savings account. The rest should be invested in instruments so it will earn more and grow faster – and thus helping you achieve your financial goals much sooner.
Read: Are You Ready To Invest?
I believe that Filipinos, while more financially aware, are still lacking in financial discipline.
Most of us know the importance of basic personal finance such as having a budget and living below your means, but only a few actually practice them.
We are aware that there are investment instruments available in the market, but only a handful would actually go, open an account, and invest.
To end, let me share with you the result of SunLife Philippines’ “It’s Time” Study on retirees. It says that out of 100 Filipinos that are past retirement age:
- Only 2% are financially independent
- 45% depend on their relatives for support
- 30% rely on charity
- 22% continue to work
When you reach 60 years old, where will you belong?
Be part of the 2% by subscribing to Ready To Be Rich.
Oh by the way…
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