The State of Financial Literacy in The Philippines

Updated: April 19, 2015

In my previous post, I shared F. Sionil Jose’s thoughts on why Filipinos are so poor.

He mentions poverty of spirit, poor sense of nationalism and loss of ethical moorings as some of the reasons. Personally, I believe that the lack of financial literacy is also one of the major cause why Pinoys are struggling with money.

As a student, all I remember ever learning about personal finance in elementary and high school were the importance of saving, thrift values and how the love of money is the root of all evil.

I believe that these are not enough and other financial habits such as expense tracking, wise spending and the concept of budget planning should also be taught to children as early as possible. As for me, if it weren’t for my parents and some personal initiative to improve my finances, I wouldn’t have made effort to study and learn about these things.

In line with this, I tried to do a little research on the state of financial literacy in the Philippines. Interestingly, I found several studies conducted by financial agencies and business institutions. Here are some of the facts I’ve gathered from the reports:

Overseas Filipino Workers and Their Families

  • 32% of Filipino households have family members abroad
  • Among these OFW-supported families, 48.6% are investing
  • 31.4% of these households earmarked money for bank savings

This is essentially good news as the numbers have grown from the past year. However, what concerns me most with these results is how the money is actually being invested. It’s been reported that most of these families have bought assets which later turned out to be liabilities.

Furthermore, who could forget the billions of pesos that was scammed from Filipinos by various pyramiding schemes such as Multitel. If the victims only had due diligence to check the legalities of these companies, then they could have prevented themselves from being conned into these programs.

Moreover, in an exclusive interview, one OFW shared that Filipinos abroad often burn money in buying clothes, bags, laptops and other techie gadgets that they never get to use. When asked if her fellow Pinoy crewmates have the habit of saving money, she clearly answered that they don’t, and this is the reason why they come back year after year.

I’ve seen this personally from a friend who came back from working in Japan two years ago. She showered her family with gifts and even bought them a new house. She invested in several real estates and started a business with her brother. She thought that all would be well and good until early this year when she realized that her savings are slowly being depleted by the indolence and lavishness of her family.

Her investments are not earning high enough to sustain their expenses and her brother, lacking the entrepreneurial mindset, is mismanaging the business. She is now busy preparing to go back to Japan by the end of the year.


The Middle Class Filipino

  • 80% of working, middle class Filipinos see a bleak retirement and more than half expect to be supported by their children in their old age
  • Only 10% of Filipinos are consciously saving up for retirement
  • Among the middle class, 36% save regularly every month while 51% only “save when they can”
  • 90% attempt to follow a budget, but only 33% stick to it
  • 40% pay their credit card balances in full monthly, while 22% pay only the minimum amount due in their credit card statements
  • When asked about investing, 43% think they know exactly what to do if they had money to invest, 53% have a “good idea” where to invest, while 4% have no idea how to invest
  • 84% of the working, middle class have no formal financial plan

Although these reports may be disappointing, there is actually some good news. One financial agency reported that in a population survey, they’ve discovered that more than half of Filipinos believe on the importance of saving.

However, the real problem lies in having the discipline to implement their financial goals. Many attribute such deficiencies to the lack of resources and financial know-how.

Indeed, I’ve seen much of my corporate friends who try their best to improve their finances but later on fail to become consistent and persistent with their efforts.

There is a need for change if we want the Philippines to become a first world country someday. I believe that it should begin within us and it should begin now.

How about you, where do you belong in these statistics? How financially literate are you?

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Dumlao, Doris. “More OFW families save, invest money sent to them”. 15 June, 2008.
Duplito, Salve. “Are OFW-supported families starting to save and invest?“. 17 June, 2008
– – -. “8 out of 10 Filipinos worry about bleak retirement“. 17 January, 2008
Quebal, Articer. “Expanding Financing Literacy To The Barangays And Schools”. 2004

Photo courtesy of aquino.paolo


  1. Very true, Fitz. Most Filipinos do not know how to handle money properly. Unfortunately, some of us sacrifice themselves and leave their families here just to earn good money.

    While the government is trying to help the masses to save by removing their taxes, it is not sufficient enough because what we really need is financial education.

    Fiipinos are good earners, talented and world class workers but only a few of us are good businessmen.

    We are always searching for a superhero who can help us but we do not realize we are that superhero inside ourselves.


  2. great post fitz! and very true as well. most of my relatives in the province are earning well — but because they are what we call “financially illiterate”, they often find themselves in debt. they just couldn’t live within their means. they think that since they are earning from a stable job, they have the “right” to spend, spend, spend. i wish that finance be thought in school too. its definitely more important than art or music subjects! no offense to artists, LOL

  3. @guardian angel
    I agree, people should stop blaming the government, their family, etc. for their poor financial status. Change is always possible if we start within ourselves.

    Thanks for the compliment. I think DECS should seriously consider including Personal Finance as a subject in school. A friend of mine who worked there already proposed the idea years back, it was not really given consideration (too bad). In any case, I believe that it’s also important for parents to teach their kids about money as early as possible.

  4. Nice post! My 2nd time to check you website. Filipino families should start saving and increase their savings at any rate. I believe that we, Filipinos, need to spend time studying our finances carefully.

    Yeah! DepEd should include subjects such as finance in elementary and highschool. So as with CHED for college students.

    Something that should be given attention to is investment instrument/s most Filipinos are using. More power to you Fitz!

  5. Thanks for the mention, Fitz. Will be checking back in regularly to read your musings. It is very important to give proper attribution within the article as well as in the footnotes. You know, as a writer, a lot of people copy my articles and I mean lifting everything from the title to the last period. I have grown tired of teaching that real writers are not afraid to attribute anything to other fellow writers. But while I have stopped calling other bloggers’ attention to that, proper attribution has remained as one of my personal yardsticks for good writing. Regards.

  6. @Lee Angelo
    Thanks for sharing your thoughts. I hope you can help spread the word to your friends about my humble site. 🙂

    You’re welcome and I’d like to extend my gratitude too for writing such informative articles. I hope that through our writing, we can help increase the financial literacy of Filipinos.

  7. Surely, no problem! I’m sure they could find valuable information from you site. More power to you and more posts to come!

  8. The Philippine Issues Writing Project Summary, Prize Winners Announced | Filipino Voices says:

    […] – Political Abrogationism for Real, Global and Moral Democracy Oliver Geronilla – Tongue In Cheek? Fitz – The State of Financial Literacy in The Philippines JM Tuazon – Blogging Issues Coy – Video on Checkpoints During Rallies Legally Inclined – The Most […]

  9. Its nice to hear that people like you have taken steps to remedy the present state of Philippine Financial Literacy. Thanks for the wonderful articles you have share. Starting today,I will regularly visit your site and share it in my FB account. I pray that we can reach and educate more Filipinos in the coming days. Thanks again!

  10. […] Literacy”. Wikipedia “Financial Literacy”. Community Developments. June, 2011 Fitz. “The state of financial literacy in the Philippines.” Ready To Be Rich. F. Sionil Jose. “Why Are Filipinos So Poor?” Ready To Be Rich “What […]

  11. […] knowledge is the ability to see the distinction between an asset and a liability. Fitz reports in The State of Financial Literacy in the Philippines that most OFWs and their families are confused about assets and liabilities. Their hard-earned […]

  12. I firmly agree to the idea of also teaching financial education to each and every Filipino especially in school if we want to make our country progressive. We should learn how to make money work for us,not us,working for money.For that is only the way we can achieve financial freedom.I suggest you also read Robert Kiyosaki’s Book the Rich Dad, Poor Dad.It will definitely help for sure,and if it does,share it also to your loved ones.Thanks! ^_^

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