Financial Literacy of the Philippines

Along with many concerns that has evolved in the Philippines lately and has gained much consideration of a wide array of sectors is the issue of Financial Literacy or Financial Education. The factors that are surrounding financial literacy are very alarming and Filipino’s lack of financial knowledge and tools are placing them in a very unfavorable status. Ineffective functioning financial competence can affect them to make sound long-term financial goals and decisions.

Although, financial literacy programs have already made its mark in the society, the effectiveness of each programs are yet to be documented.  Generally, to evaluate the achievement of each program is to consider the occurrence of behavioral variations to the target population.  One social science subject argues that the populace is keener in learning through practical manner and functional wisdom.  It is therefore safe to say that behavioral character and learning partiality influences the effectiveness of the financial literacy programs.  The best example of this is the Filipino household.  This segment of the community does not always perform for their paramount future financial interest.  Most of them only see the situation of today and the now.  They would often times let go of the future and just put their lives under the hands of God.  Financial Literacy programs should understand and ponder this puzzle and consider this in their planning.

Market innovation, industrial revolution, increased number of non-formal lending and other undeniable issues has raised the significance of financial literacy programs.  For Filipinos, Financial literacy has not kept pace to the general population.  Most of these programs are offered at work, through employer provided seminar and structured seminars during related events.  Banking institutions also offer programs that focus on the importance of savings and credit management.  Banks and other financial institutions usually conduct seminars, workshops and other collaborative efforts to promote banking services and at the same time advertise their company. 

 These initiatives, however, presents low input to working Filipinos.  Psychology expert’s contends that the manner in which information is untaken can make or break a presentation.  The most commonly mentioned source of information about personal finance was personal experience; friends and family and mass media.  Other channels such as seminars, workshops and school courses are less considered as source of information.

The results will be helpful for experts in designing programs and developing strategies that is effective in reaching the general population.  By customizing the program’s content, the target audience will be more receptive to the objectives of the programs.

The Government, financial institutions and other concerned groups have also initiated programs to counter-act Filipino’s financial deficiency.

Books/ Seminars/ Workshops/ Non- Governmental Organizations (NGOs)

A lot of self-help books have proliferated in the country today.  The international leaders include Mr. Robert Kiyosaki’s books.  For Local Leaders we have the following:

The Personal Financial Advisers Philippines:

Mr. Efren Ll. Cruz, RFP® founded the Personal Finance Advisers Philippines Corporation (PFA) on February 20, 2006. PFA was borne out of Mr. Cruz’s passion to promote financial literacy among Filipinos through the discipline of financial planning. This passion also led Mr. Cruz to authoring the following best-selling books:

“Pwede Na! The Complete Pinoy Guide to Personal Finance”

“Pwede Na! The Complete Pinoy Guide to Retirement & Estate Planning”

These are still the only books in the country giving practical personal finance advice in a Philippine setting and with free companion financial planning software.

Main Services

Personal Finance Seminars

Comprehensive Financial and Estate Planning

Investment Advice and Monitoring

Internet and SMS enabled Portfolio Accounting and Fund Administration

PFA is a truly independent financial adviser that promotes the CDRW drivers of personal finance in the Philippine setting, namely: Cash, Debt, Risk and Wealth management. PFA’s personal finance talks provide a follow up activity and continuing education for the participants as well as feedback to the participants’ employers.*

COLAYCO FOUNDATION FOR EDUCATION, INC.

The Colayco Foundation for Education (CFE) continues to be a prime mover of the financial literacy movement in the country. In 2003, it started promoting the need for financial education among ordinary income earners, students, migrant workers and their families. CFE delivers its advocacy in all forms of media: bestseller books, seminars, workshops, TV and radio programs and the Internet. These have opened and continue to open the minds of millions of Filipinos on the need to save and grow their savings to prepare a secure future for themselves, their families and their community. This is the Foundation’s modest contribution to nation building.*

Financial Institution

Banks, as mentioned above, have programs that enhance their client’s knowledge about credit and other banking services.  One institution called CiteSecOnline(www.citiseconline.com), the country’s premiere online stock broker, promotes cooperative effort with the Philippine Stock Exchange (PSE) to foster the development of financial literacy to Filipinos about stock investing.  One of their programs is to conduct Free Seminars to Organization or institutions who seek alternative ways to invest.

Philippines Government

The Government has also initiated programs that aim to I prove the basic financial literacy of the public.

In January 2004, Bangko Sentral ng Pilipinas (BSP) has approved the creation of BSP Consumer Education Committee (CEC), which aims to address the basic financial literacy needs of the consumers of financial products and services.  One of the objectives of CEC financial literacy advocacy it to: Improve financial consumer’s ability to make informed judgments and confident decisions about financial transactions.  To pursue BSP’s commitment to financial literacy advocacy, Financial Consumer Affairs Group (FCAG) was created.  FCAG is responsible for conducting advocacy initiatives aimed at educating and supporting the interest of the public on financial literacy issues.

To develop the “best system” in the Financial Literacy advocacy, we need a consistent development and innovations to programs and survey interpretations.  Setting up the groundwork on the young age groups would be the best way to start.  This will eventually lead to adults who are financially equipped and can easily adapt to the multifaceted economic life.  The idea to become financially literate is to start now and take advantage of the financially beneficial factors that is already available to every person.

* Personal Finance Advisers Philippines Corporation 13 Masunurin Street, Sikatuna Village,       Quezon City 1101 Landline: (63-2) 216-1541  Mobile: (63-917) 505-0709, (63-917) 530-1809  Telefax: (63-2) 939-9593 Email address: info@personalfinance.ph Website: www.personalfinance.ph  eForum: www.income-tacts.com

 * COLAYCO FOUNDATION FOR EDUCATION, INC. Unit 805 8th FloorCityState Centre Condominium #709 Shaw Boulevard, Pasig City,             Philippines

*FCAG Financial Literacy Advocacy – OECD Document.doc/ www.citiseconlie.com