# data[].attributes.headline
Financial Illiteracy is widespread among the Philippine population

# data[].attributes.subject
Financial Illiteracy is widespread among the Philippine population

# data[].attributes.body
In 2014, Standard & Poor conducted a global financial literacy survey among 150,000 respondents in over 140 countries. The survey found that only 25% of the Filipino respondents were aware of the basics of managing their money, which is much lower than the global average of 33%. Comparing this to Singapore that scored 59%, Myanmar with 52%, and Malaysia with 36%, the Philippines is among the least financially literate countries in the world.

# data[].attributes.attachment_link.readable_text
IN A FINANCIAL capability survey implemented by the World Bank in 2014 as part of a broader engagement on enhancing financial consumer protection and financial education in the Philippines, a sample of 3,000 adults were asked to answer seven questions dealing with basic calculus and financial concepts (simple interest rates, inflation, compound interest, risk diversification and the main purpose of insurance products) to gauge their financial knowledge and basic numeracy skills.
The results were dismaying. On average, the respondents were able to answer only 3.2 out of the seven financial literacy questions correctly. And 10% of them got six questions right, and only 2% managed to get a perfect score.
"A more worrisome finding is that around a fifth of the surveyed population did not answer more than one question correctly, while still a significant proportion of respondents, one out of 10 adult Filipinos, did not appear to have a sound grasp of any of the basic concepts being tested," The World Bank said in "Enhancing Financial Capability and Inclusion in the Philippines - A Demand-side Assessment," which was released in 2015.
Filipino adults also performed poorly in the 2014 Global Financial Literacy Survey by Standard & Poor's Ratings Services, in which several questions measuring four fundamental concepts for financial decision making - basic numeracy, interest compounding, inflation and risk diversification - were posed to more than 150,000 respondents in 140 countries.
To be deemed financially literate, the respondents needed to correctly answer "at least three out of the four financial concepts." The survey found that only 25% of adult respondents in the Philippines were financially literate, a figure lower than the global average of 33%.
It's evident from these surveys that the financial literacy of the Filipinos is lacking, and it should be a cause for great concern. "Financial literacy is a necessary life skill. The simplest human activity requires financing and life brings with it various risks. At the individual level, financial literacy, and its eventual translation into financial capability, enables us to save, prepare for the future, and manage economic/financial shocks," Pia Bernadette Roman-Tayag, managing director of the Inclusive Finance Advocacy Office and the Financial Consumer Protection Department at Bangko Sentral ng Pilipinas (BSP), told BusinessWorld in an e-mail.
Mario A. Deriquito, President of Banco de Oro Unibank, Inc. Foundation (BDO Foundation), the corporate social responsibility arm of one of the biggest banks in the country, shares the sentiment. "Financial literacy enables people to manage their resources efficiently and responsibly, thereby ensuring a more stable future. Financially literate people have knowledge of financial products and services which enables them to make well-informed decisions," he said in an e-mail.
Financially learned citizens with the ability to understand, select and use financial services that fit their needs can also be more effective partners of BSP in maintaining stable prices and ensuring a stronger, safer banking and payment systems and can productively contribute to the economy, Ms. Roman-Tayag noted.
Everyone needs financial education, regardless of their social status and age. But there are several groups that require a financial education tailored to their needs, and one of those groups comprises overseas Filipinos (OFs) and their beneficiaries. "OF remittances continue to provide support to the country's economy as a major driver of domestic demand. The 2017 level of OF personal remittances accounted for 10% of GDP. Yet anecdotal evidence and general public knowledge indicate that many OF families struggle to meet their needs, when the OFs return home," Ms. Roman-Tayag said.
The unbanked, low-income households, farmers, fisherfolk and micro, small and medium-sized enterprises are also an important financial education target. Ms. Roman-Tayag said they lack not only adequate awareness, but also appreciation and knowledge of formal financial transactions, particularly their benefits and risks. "To effectively on-board them in the formal financial system, and enable them to make prudent financial choices, they would need enhanced financial literacy and improved financial capability," she added.
There's one more group that needs a financial education that suits them - the youth. In the 2014 book Financial Education for Youth: The Role of Schools, the Organization for Economic Cooperation and Development notes that incorporating financial education into the formal school curriculum is one of the most efficient and fairest ways to reach a whole generation on a broad scale. "In addition, since the curriculum spans several years and can start as early as kindergarten, it is unique means to inculcate and nurture a sound financial culture and behaviors amongst future adults," the organization adds.
To enhance the financial literacy of the Filipinos, BSP started an initiative called the Economic and Financial Learning Program (EFLP), which consists of 10 learning programs designed for specific audiences: children, college students, the working sector, investors, overseas Filipinos, and select unbanked sectors.
"We have developed about 46 learning materials, videos and brochures. We continue to share them with participants, with our partners, and on social media platforms," Ms. Roman-Tayag said. "As of end-2017, we have conducted more than 30,000 learning programs in 79 out of 81 provinces, reaching 2.2 million participants. EFLP participants have rated the programs with an average of 4.7, with 5 as highest possible score. Based on the annual organizational scorecard of the BSP, we have always met targets in terms of program completion and participation rates."
More recently, the central bank, the Department of Education (DepEd) and BDO Foundation joined forces to develop financial literacy materials for an estimated 24 million students and around 700,000 teaching and non-teaching personnel in more than 47,000 public schools nationwide.
"These materials, consisting of short videos, lesson plans, and discussion guides, are expected to make teaching and learning financial literacy more fun, interesting and engaging. They cover topics such as saving, investing, responsible use of credit, personal budgeting and financial management, and sharing," Mr. Deriquito said.
"Although it is too early to talk about the project's impact, BDO Foundation is excited about the project because of DepEd's commitment to use the materials in regular classroom instruction and in regular teacher training programs, making its rollout rapid and wide-reaching," he added.
The partnership forged by the three institutions can be a model for the kind of collaboration that the government and the private sector should have to better tackle the financial literacy issue. "BSP provides overall direction through its National Strategy for Financial Inclusion. BSP also contributes to the content and materials development. DepEd, on the other hand, handles the pedagogical aspect by incorporating financial literacy into the curriculum, contributing ideas into the development of the videos, developing the lesson plans and discussion guides, and actually rolling them out within the entire public school system. BDO Foundation, for its part, lends its expertise and financial resources to the project and handles overall project management," Mr. Deriquito explained.
The National Strategy for Financial Inclusion he mentioned was launched in 2015 to optimize collective efforts toward financial inclusion in the Philippines. It provides a platform for the private sector to support the government in improving the financial literacy of the Filipinos through financial education. A tenet of the initiative is that a well-informed and adequately protected public is critical to realizing financial inclusion.
"We think that financial education, financial inclusion as well as consumer protection should be a collective responsibility. This is an issue which requires all hands on deck," Ms. Roman-Tayag said. A hand from the media is certainly welcome.
"By simply proliferating financial education messages (e.g. prudent personal finance management), informing the public about their rights as financial consumers, and warning them against financial fraud and scam - the media can already impact the lives of Filipinos. The media may likewise take proactive roles by developing specific programs on financial literacy, for example soap operas, ads or other innovative programs that promote fin-ed messages," Ms. Roman-Tayag said. - FATV

# data[].attributes.attachment_link.title
Toward a more financially literate nation - BusinessWorld Online

# data[].attributes.attachment_link.description
IN A FINANCIAL capability survey implemented by the World Bank in 2014 as part of a broader engagement on enhancing financial consumer protection and financial education in the Philippines, a sample of 3,000 adults were asked to answer seven questions dealing with basic calculus and financial concepts (simple interest rates, inflation, compound interest, risk diversification and the main purpose of insurance products) to gauge their financial knowledge and basic numeracy skills.

# data[].attributes.headline
Economic and Financial Learning Program by the BSP

# data[].attributes.subject
Economic and Financial Learning Program by the BSP

# data[].attributes.body
The Bangko Sentral ng Pilipinas (BSP) runs the Economic and Financial Learning Program (EFLP), its flagship initiative for financial education. The program is meant to promote awareness and understanding of key economic and financial issues with the goal of helping Filipinos develop skills to make sound financial decisions.

The program consists of learning sessions aimed at different audiences. One of their programs is the Financial Education Expo, which targets students and teachers. The expo's goal is to show and educate its audience about the availability and accessibility of financial education programs, increase personal financial consciousness, and inform them of the available financial tools.

Another program under the EFLP is the Financial Learning Campaign for Overseas Filipinos and their Beneficiaries, which aims to educate its participants on the importance of using remittances to build up savings and direct them to prudent investments and business ventures.

# data[].attributes.attachment_link.readable_text
The Philippines has a financial literacy problem. Citing a 2015 survey by the World Bank, the Bangko Sentral ng Pilipinas (BSP) noted in a statement last year that Filipino adults could answer only three out of seven financial literacy-related questions correctly. These questions were about basic numeracy, computing compounding interest, fundamentals of inflation, and investment diversification. Furthermore, a measly 2% of Filipino adults could answer all seven correctly.

"The study also showed that Filipinos lack specific knowledge to make informed financial decisions. However, the same study indicated that money management habits formed in childhood stay into adulthood. Those who began saving as children display better attitudes to saving, and tend to outperform their counterpart group who did not develop the habit early in the areas of choosing financial products and services, monitoring expenses and planning for retirement," the BSP said.

It added, "A growing body of literature also reveals that a financially-literate population is able to make better financial decisions, has higher levels of savings and diversified investments, and is more competent in managing debt."

Government institutions like the BSP and private-sector players like banks have mounted their respective efforts to improve the financial literacy of Filipinos, particularly students, overseas Filipino workers (OFWs), and disadvantaged people like farmers.

BSP runs "Economic and Financial Learning Program" (EFLP), its flagship initiative for financial education. According to the central bank, this is in line with its drive to promote greater awareness and understanding of essential economic and financial issues that will help the Filipino public acquire the knowledge and develop the skills to make well-informed economic and financial decisions and choices.

The program is composed of learning sessions aimed at different audiences. One is the Financial Education Expo, which is designed for students, teachers, and other members of the academe, as well as employees and professionals from the public and private sectors. It's a two- to three-day long affair offering various financial education activities.

"The expo aims to instill awareness about the availability and accessibility of financial education programs, increase personal financial consciousness on the values and benefits of being financially empowered, and inform the public about available financial tools that can help in the promotion of their financial well-being," BSP said.

Another project under the EFLP is the "Financial Learning Campaign for Overseas Filipinos and their Beneficiaries," which aims to educate participants on the importance of using remittances to build up savings and also direct these into investments in financial products and/or business ventures.

BSP, in partnership with BDO Foundation, the corporate social responsibility arm of BDO Unibank, Inc., launched another program for OFWs and their families last February called "PiTaKa or "Pinansyal na Talino at Kaalaman." Through this program, it is hoped that OFWs will develop the abilities to better manage their remittances, get out of debt, set aside savings and make prudent investments. It also aims to help the families of OFWs realize the temporary nature of overseas employment and to learn how to spend wisely, save regularly, and look for ways to augment their income.

In November last year, BSP conducted the first-ever Financial Education Stakeholders Expo that brought together key stakeholders, decision makers, influencers, and representatives from public and private institutions. This two-day expo included talks on financial stewardship and plenary discussions on the financial education landscape in the country and around the world. It was the beginning of an annual tradition in which the central bank, DepEd, and other key financial education stakeholders could engage, build connections and pave the way for more productive and impactful partnerships in financial education.

Last March, BSP and BDO Foundation turned over a set of financial tools - five videos and 18 lesson plans about such topics as financial planning, debt management, entrepreneurship, investing, insurance and scam prevention - to the Department of Education (DepEd). The tools were produced under the three entities' "Financial Literacy Program for Schools" that aims to support the integration of financial literacy education into the K to 12 curriculum.

"Studies show that those who develop the habit of saving outperform their peers in choosing financial products and services, monitoring expenses, managing debt, and planning for retirement. Financially-literate individuals are known to better able to protect themselves from unsound financial practices, fraud, and scams. School children who understand financial concepts have the capacity to influence their families and their communities - creating a multiplier effect. Thus, it is imperative to ingrain lessons on wise money management and healthy financial behaviors in the basic education system," the central bank said in a statement about the donation.

Early this year, BDO Foundation forged a partnership with National University (NU) to develop simple accounting and bookkeeping modules for farmers nationwide. The faculty members of the university will train farmers in communities chosen by the foundation in these modules. Through this initiative, the foundation aims to give farmers the chance not only to grow their business but also to alleviate their poverty. It also hopes to improve financial literacy and inclusion in the country.

"Countless farmers still experience financial hardship partly because they lack financial education. They are skilled in crop production but they are not able to grow their business because they don't know much about the financial side of farming. They do not know how to budget or differentiate between disposable income and what should be plowed back to production. Because of this, they are always in need of fresh funds and become victims of predatory lending," Mario A. Deriquito, president of BDO Foundation, was quoted as saying in a statement. "With the help of NU, farmers will learn simple accounting, bookkeeping, and even budgeting and financial planning."

Besides the faculty members, select senior students from NU's College of Business and Accountancy will participate as observers during the training and researchers who will monitor the progress of the farmers and the effectiveness of the training. "This collaboration is meant to further develop the education that we provide our students, as it cuts across not just academics, but also research, and community engagement," Renato Carlos H. Ermita, Jr., president of National University, said in a statement.

# data[].attributes.attachment_link.title
Boosting Filipinos' financial literacy, one program at a time - BusinessWorld Online

# data[].attributes.attachment_link.description
The Philippines has a financial literacy problem. Citing a 2015 survey by the World Bank, the Bangko Sentral ng Pilipinas (BSP) noted in a statement last year that Filipino adults could answer only three out of seven financial literacy-related questions correctly. These questions were about basic numeracy, computing compounding interest, fundamentals of inflation, and investment [...]

# data[].attributes.body
There still remain millions of Filipinos without easy and clear access to education meant to improve their financial literacy skills. Most of these Filipino are the less educated, of lower income classes, unemployed, and those belonging to the younger generation. Other under-served Filipinos include senior citizens, persons with disabilities, and indigenous people.

# data[].attributes.body
Previously, financial literacy mainly involves the basic personal money management, budgeting and investment. However, the scope of the challenge directly expands in proportion to the changes in financial markets. For example, with the advancements in technology, people now have a much wider selection of financial products to choose from, making financial decisions much more different and complex than in the past (Lusardi, 2019).

This is exemplified by the rise of financial technology (fintech) that has greatly transformed how we pay, save, and borrow money, as well as how we manage financial risk (Bakkar, n.d.). From cryptocurrencies backed up by blockchain technology, to mobile banking and electronic trading, technology is continuously revolutionizing the financial landscape.

With the unceasing advancement of financial services, the challenge of financial illiteracy broadens even further as more and more individuals would be left behind should steps to improve financial literacy not be administered.

# data[].attributes.body
Financial literacy has become part of the K-12 curriculum where family budget pie charts are discussed in Grade 6 and concepts such as unemployment being tackled in Grade 11. However, the resources of certain schools are not enough to assure effective and efficient learning (Chua, 2020). As such, there is a need for schools to pursue collaborations with existing programs and organizations that promote financial literacy. For example, BSP and Prudence Foundation’s Cha-Ching has videos on financial education which can be part of a school’s teaching materials. Experts from their organization may also be invited or asked for advice for more effective curriculums.

Additionally, as mentioned prior, solutions involving modules must make sure to include simulations and not just theoretical concepts. With the limited role of financial education in equipping individuals with the ability to evaluate and apply complex financial concepts, partnering with FinTech organizations in creating programs may be the more effective method of promoting financial literacy. This is because the combination of theory and practice from financial tools compensates for the limitations of traditional learning.

# data[].attributes.attachment_link.readable_text
Filipino high school students ranked last among 80 countries in reading, and second to the last in math and science in the 2018 Programme for International Student Assessment (Pisa), given by the Organization of Economic Cooperation and Development.

Many factors contributed to our poor performance (see "Pisa: What it really takes," December 12, 2019). Pisa also included an optional test on financial literacy, which we did not take.

Young people in many countries fared badly. About 94 percent learn about money matters from their parents and 73 percent buy online (possibly more now, given the pandemic).

That same year, a World Bank study revealed only 2 percent of Filipinos could answer questions on interest, inflation and investments. Teachers fared no better.

Financial literacy has become part of the K-12 curriculum. Saving money is discussed in Kinder, family budget pie charts in Grade 6 and unemployment in Grade 11. But more thoughtful resources are needed.Recently, I revisited Prudence Foundation's Cha Ching Kid$ at Home, an online program for parents to help grade school children understand the cycle of earn-save-spend-donate.

I was already familiar with Cha Ching when in 2013, Pru Life UK asked me to talk about financial literacy to its clients, mostly parents. Last Sept. 12, I headed a video conference with their clients and gladly discovered that aside from parents, teachers and Department of Education officials (particularly in the Visayas, where Cha Ching is adopted by schools) tuned in as well.

Online materials have tripled and videos (airing on Cartoon Network worldwide) have been translated into Filipino. The activities have also been adopted to be of use beyond the target ages of 7 to 12.

Take my favorite activity-differentiating needs from wants, which is even more urgent now in this pandemic.

"Financial distress is a reality for many Filipino families," said Bangko Sentral ng Pilipinas Governor Benjamin Diokno last July.

"The failure to save for specific goals such as an emergency fund, or the unnecessary expenses that lead to overindebtedness, can compromise the health, harmony and happiness of families," he added.

In the video "Spend your money wisely, my friend," Prudence and her friends are hungry, but decide to cook their own noodles at home rather than dine out and spend five times the amount. In another video "Practice delayed gratification," Pepper is a shopaholic but comes to her senses when she discovers she does not have enough money for what she truly desires.

"Self-control is an essential skill to achieving goals in life," says the parent guide. "To master the skill of self-control, one must reduce the impulse for immediate gratification and practice delayed gratification."

Easier said than done. And so, parents are guided to discuss with their kids questions such as: Do I really need the item or is it just something I want? If I get this item now, will I miss out on something else later? Do I need or want it enough to spend my money on it? If the purchase is totally thought out and planned for, am I getting it at the best price?

Cha Ching provides children with colorful, downloadable worksheets: a personal budget planner to classify needs and wants, with corresponding costs; a grocery list with estimated and actual costs; a pocket money tracker to analyze target savings vis-à-vis allowance.

Families are challenged to spend less. Besides the worksheets, a family budget manager is also available for download in PDF and Excel.

Cha Ching resources can be used as a springboard for further learning. For instance, students can apply the 50-30-20 rule of thumb for budgeting, as popularized by US Sen. Elizabeth Warren. The rule means 50 percent of our money can go toward needs, 30 percent toward wants, and 20 percent toward savings.

Visit chaching.cartoonnetworkasia.com.

Queena N. Lee-Chua is with the board of directors of Ateneo's Family Business Center. Get her book "All in the Family Business" at www.lazada.com.ph. Contact the author at [email protected]

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

For feedback, complaints, or inquiries, contact us.

# data[].attributes.attachment_link.description
Filipino high school students ranked last among 80 countries in reading, and second to the last in math and science in the 2018 Programme for International Student Assessment (Pisa), given by the Organization of Economic Cooperation and Development. Many factors contributed to our poor performance (see "Pisa: What it really takes," December 12, 2019).

# data[].attributes.headline
Pinansyal na Talino at Kaalaman (PiTaKa)

# data[].attributes.subject
Pinansyal na Talino at Kaalaman (PiTaKa)

# data[].attributes.body
In partnership with BDO Foundation, the BSP launched PiTaKa, a program meant to help OFWs develop the ability to better manage their remittances, get out debt, make investments, and set aside savings. Additionally, the program also assists the families of OFWs to understand the temporary nature of remittances and learn how to save regularly, spend wisely, and look for other sources of income.

Reference:
https://www.bsp.gov.ph/Inclusive%20Finance/Tools/PiTaKa_trainers_manual.pdf

# data[].attributes.attachment_link.readable_text
The Philippines has a financial literacy problem. Citing a 2015 survey by the World Bank, the Bangko Sentral ng Pilipinas (BSP) noted in a statement last year that Filipino adults could answer only three out of seven financial literacy-related questions correctly. These questions were about basic numeracy, computing compounding interest, fundamentals of inflation, and investment diversification. Furthermore, a measly 2% of Filipino adults could answer all seven correctly.

"The study also showed that Filipinos lack specific knowledge to make informed financial decisions. However, the same study indicated that money management habits formed in childhood stay into adulthood. Those who began saving as children display better attitudes to saving, and tend to outperform their counterpart group who did not develop the habit early in the areas of choosing financial products and services, monitoring expenses and planning for retirement," the BSP said.

It added, "A growing body of literature also reveals that a financially-literate population is able to make better financial decisions, has higher levels of savings and diversified investments, and is more competent in managing debt."

Government institutions like the BSP and private-sector players like banks have mounted their respective efforts to improve the financial literacy of Filipinos, particularly students, overseas Filipino workers (OFWs), and disadvantaged people like farmers.

BSP runs "Economic and Financial Learning Program" (EFLP), its flagship initiative for financial education. According to the central bank, this is in line with its drive to promote greater awareness and understanding of essential economic and financial issues that will help the Filipino public acquire the knowledge and develop the skills to make well-informed economic and financial decisions and choices.

The program is composed of learning sessions aimed at different audiences. One is the Financial Education Expo, which is designed for students, teachers, and other members of the academe, as well as employees and professionals from the public and private sectors. It's a two- to three-day long affair offering various financial education activities.

"The expo aims to instill awareness about the availability and accessibility of financial education programs, increase personal financial consciousness on the values and benefits of being financially empowered, and inform the public about available financial tools that can help in the promotion of their financial well-being," BSP said.

Another project under the EFLP is the "Financial Learning Campaign for Overseas Filipinos and their Beneficiaries," which aims to educate participants on the importance of using remittances to build up savings and also direct these into investments in financial products and/or business ventures.

BSP, in partnership with BDO Foundation, the corporate social responsibility arm of BDO Unibank, Inc., launched another program for OFWs and their families last February called "PiTaKa or "Pinansyal na Talino at Kaalaman." Through this program, it is hoped that OFWs will develop the abilities to better manage their remittances, get out of debt, set aside savings and make prudent investments. It also aims to help the families of OFWs realize the temporary nature of overseas employment and to learn how to spend wisely, save regularly, and look for ways to augment their income.

In November last year, BSP conducted the first-ever Financial Education Stakeholders Expo that brought together key stakeholders, decision makers, influencers, and representatives from public and private institutions. This two-day expo included talks on financial stewardship and plenary discussions on the financial education landscape in the country and around the world. It was the beginning of an annual tradition in which the central bank, DepEd, and other key financial education stakeholders could engage, build connections and pave the way for more productive and impactful partnerships in financial education.

Last March, BSP and BDO Foundation turned over a set of financial tools - five videos and 18 lesson plans about such topics as financial planning, debt management, entrepreneurship, investing, insurance and scam prevention - to the Department of Education (DepEd). The tools were produced under the three entities' "Financial Literacy Program for Schools" that aims to support the integration of financial literacy education into the K to 12 curriculum.

"Studies show that those who develop the habit of saving outperform their peers in choosing financial products and services, monitoring expenses, managing debt, and planning for retirement. Financially-literate individuals are known to better able to protect themselves from unsound financial practices, fraud, and scams. School children who understand financial concepts have the capacity to influence their families and their communities - creating a multiplier effect. Thus, it is imperative to ingrain lessons on wise money management and healthy financial behaviors in the basic education system," the central bank said in a statement about the donation.

Early this year, BDO Foundation forged a partnership with National University (NU) to develop simple accounting and bookkeeping modules for farmers nationwide. The faculty members of the university will train farmers in communities chosen by the foundation in these modules. Through this initiative, the foundation aims to give farmers the chance not only to grow their business but also to alleviate their poverty. It also hopes to improve financial literacy and inclusion in the country.

"Countless farmers still experience financial hardship partly because they lack financial education. They are skilled in crop production but they are not able to grow their business because they don't know much about the financial side of farming. They do not know how to budget or differentiate between disposable income and what should be plowed back to production. Because of this, they are always in need of fresh funds and become victims of predatory lending," Mario A. Deriquito, president of BDO Foundation, was quoted as saying in a statement. "With the help of NU, farmers will learn simple accounting, bookkeeping, and even budgeting and financial planning."

Besides the faculty members, select senior students from NU's College of Business and Accountancy will participate as observers during the training and researchers who will monitor the progress of the farmers and the effectiveness of the training. "This collaboration is meant to further develop the education that we provide our students, as it cuts across not just academics, but also research, and community engagement," Renato Carlos H. Ermita, Jr., president of National University, said in a statement.

# data[].attributes.attachment_link.title
Boosting Filipinos' financial literacy, one program at a time - BusinessWorld Online

# data[].attributes.attachment_link.description
The Philippines has a financial literacy problem. Citing a 2015 survey by the World Bank, the Bangko Sentral ng Pilipinas (BSP) noted in a statement last year that Filipino adults could answer only three out of seven financial literacy-related questions correctly. These questions were about basic numeracy, computing compounding interest, fundamentals of inflation, and investment [...]

# data[].attributes.headline
A Disconnect between Theory and Application 

# data[].attributes.subject
A Disconnect between Theory and Application 

# data[].attributes.body
Financial literacy among Filipinos is important and can be addressed through educational materials and classes, but that may also not be enough. There needs to be a connection or link between theory learned and real life experiences with the proper behavior to fully grasp and develop financial skills. Financial literacy must be accompanied with the proper behavior to put the information learned into good use and develop good savings and investing habits.

To illustrate this, research has shown that scenarios and other forms of experiential learning are more effective in honing a person’s financial capability. For example, when students were assigned the task of creating household budgets for certain life situations, they were found to be better at making financial decisions in adulthood (Carlin & Robinson, 2010). In relation to this, Carpena et al. (2020), has also found that familiarizing individuals with the available financial tools may be more effective in enhancing financial knowledge than financial education.

Thus, in the digital age, FinTechs or digital finance solutions are ideal for tackling the issue of financial illiteracy. The application and platforms developed by FinTech companies can cultivate healthy financial education and practices.

# data[].attributes.attachment_link.readable_text
THE PHILIPPINES has recently been plagued with fraudulent and unethical online lending behavior. This has prompted fintechs in the country to take much needed measures to combat issues related to financial literacy - like introducing industry standards for responsible lending following a circular by the Securities and Exchange Commission (SEC).

Industry players holding themselves to a higher standard is a drastic effort to address the mushrooming fraudulent organizations breeding in the Philippines, but it's also a symptom to a problem that has long plagued the ecosystem.

UNDERSTANDING FINANCIAL LITERACY
Many Filipinos have low income. According to the World Bank, less than 10% of the population could be considered middle class in 2015 - a figure that has remained fairly stagnant since 2002.

Part of the reason the poor stay poor is a lack of financial literacy.

Even the most responsible Filipinos are placed at greater risk when attempting to access credit needed to rise above poverty or go up in social class, as the majority of Filipinos have or will take on debt. According to a survey conducted by the Bangko Sentral ng Pilipinas (BSP) in 2015, only 19.1% of adults do not borrow at all. And those who borrow greatly prefer informal sources over banks; 61.9% of them borrow from friends and family, and 10.1% borrow from informal lenders.

Furthermore, a World Bank survey in 2015 discovered that Filipinos who are knowledgeable about financial matters are more likely to report that they have money left after paying for basic necessities, and less likely to say that they've borrowed beyond their means.

Financial literacy, unfortunately, is a double-edged sword. One has to have disposable income to learn how to use it. But to have disposable income, Filipinos need to apply financial knowledge.

Breaking this cycle is, in parts, why BSP launched the "Economic and Financial Learning Program" (EFLP), a flagship initiative to introduce financial education to students, working adults, overseas workers, and unbanked populations.

HOLDING CLASSES IS NOT ENOUGH
That's all fine as a first step, but as pointed out in a January column in the Manila Times, focusing solely on education won't work to curb the underlying issues in financial literacy.

"Passing a financial literacy class does not make you a good money manager. The one major reason why so many of us are so bad with handling our finances is not because we are financially illiterate but because of the way we behave. So, ultimately, getting better with our money is about changing our behavior."

While I agree with the premise, I would like to adjust that line of thinking slightly. The term "financial inclusion" shouldn't just focus on imparting knowledge, but inoculating behaviors as well.

Marketing experts Daniel Fernandes, John G. Lynch, Jr., and Richard Netemeyer found that increasing financial literacy only had a measly 0.44% impact on subsequent financial behavior in their meta analysis looking at over 200 studies on financial literacy.

The results may be surprising at first glance, but they clear up upon critical consideration. Financial education is often imparted in courses and seminars covering multiple topics at once. When participants get back home, they face the herculean task of having to put all of these lessons into practice at once. It is much easier for them to fall back into poor habits that have been built over time. Without supervision, without immediate gratification, and without practice, people will forget what they learned in these courses and seminars.

WHERE FINTECHS PLAY A PART
Behavior change is exactly where fintechs shine. Fintechs are able to cultivate healthier financial education in a more practical sense, and without bogging down users with too much information in one go.

Teaching users as they go is the best way to encourage "stickiness," and simultaneously teach users financial literacy in a more practical sense.

There are fintechs, for example, that enable consumers to pay for household goods in installments, which indirectly allows Filipinos to build the habit of honoring their short-term loans every month before they make higher-stake commitments like auto loans.

The experience of taking out a loan, receiving reminders about timely payment, and better products and repayment terms as a result of good repayment behavior are some ways fintechs help to set in motion a true financial education experience for users.

Fintechs can't succeed in isolation, however. The ecosystem needs to play its part to bolster the fintechs' role.

Policymakers and regulators need to mandate financial inclusion as a national interest and introduce policies with that vision. Activists and NGOs often serve the lowest income populations, and need to play a key role in financial literacy. Entrepreneurs and fintechs need to offer solutions with consumer protection at its core, and banks need to utilize modern advancements to open up financial services to underserved markets.

The magic happens when we talk to each other. All of these disparate voices need to be heard by all industry participants so that we can better service our particular piece of the financial education puzzle.

Contributing to their end of the puzzle, fintechs should place consumer protection at their core and implement an internal Code of Ethics. The digital lending industry needs to operate within a set of acceptable global standards, and advocate for upfront, transparent and responsible lending practices.

AsiaKredit, for example, adopts Code of Ethics standards such as the Smart Campaign for responsible lending by the globally recognized Center for Financial Inclusion (CFI) at Accion. In developing their own Code of Ethics, fintechs should look to the Smart Campaign's Client Protection Principles such as prevention of over-indebtedness, need for transparency, fair and respectful treatment of customers, data privacy management, and complaint resolution mechanisms. We assign each of these principles to a specific member of the executive team, where he/she "owns" the principle and its execution. The team meets monthly to review the principles and report on the initiatives that have been launched, are in development, or are to be developed, with the end goal of reaching 100% execution of the principles, which are, not to mention, tied to their individual performance review.

I should note that these measures outlined for Philippine industry players aren't set in stone. For example, the central bank and NGOs can always tweak their methods to exemplify more behavior-changing methods instead of just imparting knowledge.

However, I would like to highlight its importance.

According to the World Economic Forum, the Philippines' middle class is on track to outspend Italy's by 2030. We have a growing tech-savvy population, a snowballing digital economy, and a robust regional trading network. Financial literacy is crucial to ensure that those who rise in their economic status don't slide back into poverty.
Michael Singh is the CEO and co-founder of AsiaKredit.

# data[].attributes.attachment_link.title
Let's do more for financial literacy in the Philippines - BusinessWorld Online

# data[].attributes.attachment_link.description
THE PHILIPPINES has recently been plagued with fraudulent and unethical online lending behavior. This has prompted fintechs in the country to take much needed measures to combat issues related to financial literacy -- like introducing industry standards for responsible lending following a circular by the Securities and Exchange Commission (SEC).

# data[].attributes.body
Digital solutions such as exposure to FinTech products and services are considered as another way to promote financial literacy effectively. This is because FinTech products aid consumers in paying bills, instantly viewing their account balances, and settling personal debts swiftly, all at a cheaper price (Grote, 2020). However, while the supply side of these technologies are more than ready, the demand side is not.

For one, consumer financial services have often neglected people included in the lower-income classes when it comes to marketing, targeting, and customer service. As such, there is a prevalent lack of awareness and trust among the low-income communities regarding FinTech products, thereby causing their slow adoption rates. Thus, those in the lower and middle income classes who stand to benefit the most out of these products are deprived of the opportunity to use them (Grote, 2020).

Thus, there is a need to bridge this gap by spreading awareness on the benefits of FinTech to these low-income communities. Moreover, financial products and services should also be designed and delivered in a way that is pro-poor. Some features that may be added to enforce this are alerts that help consumers avoid fraud, timely and detailed transaction histories, and the waiving of additional transaction fees for special circumstances (Grote, 2020). In this way, lower income consumers would be encouraged to use the technology and consequently build their financial skills.

# data[].attributes.headline
Lack of Financial Literacy in the Philippines

# data[].attributes.subject
Lack of Financial Literacy in the Philippines

# data[].attributes.body
Filipinos suffer from “apparent financial insecurity” stemming from the lack of financial literacy which is hampering their ability to cope during the pandemic. It may also affect their financial recovery and economic mobility in the new normal.

One of the many problems faced by Filipinos is their lack of budgeting and the lack of understanding of the differences between low and high costs. They fail to meet their daily basic living needs and resort to loans during personal or financial emergencies. Furthermore, Filipinos have an inadequate understanding of compound interest, effect of inflation on buying power, and investment risk. These are a few of the reasons why Filipinos fail to save, make prudent investments, accumulate debt, and are unaware of how to use electronic banking and payment services.

Additionally, according to the World Bank data in 2017, only 34.6% of adult Filipinos have an account with a formal bank, while the remaining 65.4% rely on non-banks to acquire financial services. Meanwhile, only 3% have investment in financial instruments. The root of these problems faced by Filipinos lies in their inability to save, which is a prerequisite for investing and maintaining a healthy financial standing.

# data[].attributes.attachment_link.readable_text
MANY FILIPINOS are suffering from "apparent financial insecurity" stemming from the lack of financial literacy, which is hampering their ability to cope during a "once-in-a-lifetime pandemic," Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

"Aside from lack of budget, lack of awareness and perceived high costs are often cited by respondents as key reasons for not opening an account, not saving, not using e-payments and not getting insurance," Mr. Diokno said in an online speech delivered at the Financial Literacy Summit organized by The Global Financial Investors Saturday.

Mr. Diokno cited survey data which show Filipinos have little understanding of compound interest, the effect of inflation on buying power, and investment risk.

He also noted that research showed Filipinos scored low in daily money management and long-term financial planning despite having forward-looking attitudes.

"This limitation is highlighted in unexpected situations such as the pandemic, where, more than ever, preparedness for the proverbial rainy day is brought to the fore," Mr. Diokno said.

World Bank data in 2017 indicate that only 34.6% of adult Filipinos have an account with a formal banking institution while the rest of the population rely on non-banks to obtain financial services.

The BSP hopes to bring this up to 70% by 2023.

Mr. Diokno said more than a third of Filipino adults struggle to meet their regular spending needs and resort to loans when emergencies arise.

"The most vulnerable sectors have no bank accounts where social assistance can be quickly channeled," Mr. Diokno said.

Mr. Diokno also said only 18% have insurance while 3% have invested in financial instruments.

"Nearly half of adults (48%) have savings, but 68% of them keep savings at home," he added.

During the pandemic, more Filipinos used digital payments. Mr. Diokno has said the volume of transactions on InstaPay and PesoNet surged 57% and 325%, respectively in April and May.

In 2018, volume and value of digital payments totaled 10% and 20% respectively, of all transactions, according to a report from Better-Than-Cash Alliance. This compares with 1% and 8% by volume and value in 2013.

The central bank hopes to have 50% of all payments by volume and value coursed through electronic means by 2023. Mr. Diokno has said the pandemic surge in such payments could help it hit the target earlier.

"As we shift to the new economy, fostering financial education within the family - from grandparents, parents and children - is essential for the well-being of citizens especially in times of crisis," Mr. Diokno said. - Luz Wendy T. Noble

# data[].attributes.attachment_link.title
Lack of financial literacy hindering people in dealing with pandemic, Diokno says - BusinessWorld Online

# data[].attributes.attachment_link.description
MANY FILIPINOS are suffering from "apparent financial insecurity" stemming from the lack of financial literacy, which is hampering their ability to cope during a "once-in-a-lifetime pandemic," Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

# data[].attributes.body
There are still limited financial tools and services that are easily accessible for Filipinos, which reinforce their financial literacy and explain the steps of accessing and using financial services and products. Part of the reasons why access to financial tools and education is the lack of infrastructure that creates stable internet connection, increases the availability of smart devices and degree of digital literacy.

With good infrastructure, employing digital financial technologies can bridge the gaps that would create better access to financial information, tools, and services, increasing the financial literacy rate among the under-served.

It is important for these solutions to reach those in rural areas or those categorized as displaced persons.

# data[].attributes.body
Times are constantly changing, and the solutions must adapt to these changes as well. In today's era of digitalization, not enough solutions take advantage of the power of social media and its influence on its users. According to World Bank (2015), except for the area of overspending, more active media users tend to score higher in nearly all measured financial competence areas. Moreover, several studies have found that especially among adolescents, social media influencers play a large role in affecting their opinions and behaviors (Castillo et al., 2022). As such, this reveals the power of social media to not only direct but also to educate—and existing solutions involving talks and videos should be posted in social media and likewise promoted by social media influencers.

Additionally, psychology must also be added to the equation. By tapping into the patterns and behavior of Filipinos, the effectiveness of digital solutions can be further improved. These can include analyzing which social media platform to post on, what time earns the most engagement, and what type of post catches the most attention.

# data[].attributes.body
The Global Filipino Investors organization offers yearly financial literacy summits and courses on investing, business, real estate, and franchising.

# data[].attributes.body
In 2019, the BSP’s Financial Inclusion Survey (FIS) examined 1,200 adults aged 15 years old and above. In this survey, it was found that:

45% of Filipino adults are not aware of the effects of inflation.

Older survey participants scored higher (those between 20 to 40 years old) than their younger counterparts (15-19 years old).

67% of the adult respondents were revealed to have little to no idea of how their savings grow.

33% of the adults had a misconception regarding inflation in which they thought that inflation is based on consumers’ choice on goods to purchase rather than the increase in prices and services.

# data[].attributes.body
In 2021, Home Credit conducted a survey among 25,000 respondents belonging to the age group of 25-39 years old. Comprised of 6 questions, the survey topics included budgeting, digital literacy, and cybersecurity. The results revealed that only 10% of the respondents obtained a perfect score and as many as 10,000 Filipinos did not apply the ideal saving formula when managing their finances. In fact, when it comes to their budget, they initially prioritize expenses and save what is left.

# data[].attributes.attachment_link.readable_text
Recently, the pandemic pushed many Filipinos to be mindful of their personal finances. However, there's still immense concern on the state of financial literacy in the country. Both the 2015 World Bank (WB) survey and Central Bank's 2019 financial inclusion survey revealed that only half of Filipino adults correctly answered financial literacy questions.

This was supported by a survey from Home Credit where only 10% of the respondents correctly answered questions that test their knowledge on various financial concepts.

The said survey was drawn from the consumer finance company's self-crafted financial literacy quiz found in the My Home Credit App. A two-part quiz, it offers users a chance to answer a series of questions involving personal finance and other financial literacy items.

To get an in-depth analysis of the quiz results, here's a breakdown of the findings for each question:
Findings of Quiz 1: Basics of Budgeting, Digital Literacy, and Cybersecurity
More than 25,000 respondents took the first quiz that covers topics on basics of budgeting, digital literacy, and cybersecurity. Within May to December 2021, the respondents mostly belong to the age group of 25-39 years old and 63% or majority are female.

From the results, only 10% got all correct answers from the six questions. When asked about managing finances, almost half (as many as 10,000) did not apply the ideal saving formula in their monthly budget; they prioritize expenses first and save what is left.

On interest computation, 57% got the correct answer and the remaining half either got the wrong computation or does not know how to answer. On a related question about inflation, respondents were asked about the impact of inflation and only 41.8% had the right understanding of its effects on their purchasing power and borrowing decisions.

Filipinos seemed to be more knowledgeable on investments and risk diversification. When asked whether they will spread their money to multiple investments or focus on just one, almost 73% chose to put it into multiple investments to limit their losses, 22.5% for one investment and 4.6% do not know the answer.

Aside from inflation and basic numeracy concepts, cybersecurity and safety are also one of the concepts that are not well-understood by the takers with only 43.4% getting the correct answer - a number slightly lower than 47.8% before the covered period.

On the flip side, most respondents aced the question on what tasks can be done using digital financial tools at 97%. The social distancing measures brought by the pandemic might be a huge factor on how well-versed Filipinos have become in using fintech tools for daily transactions.

In summary, results show that the respondents' knowledge on all financial literacy concepts mentioned above are in the intermediate level with scores falling under 3 to 4 out of 6. Basic numeracy, inflation, and cybersecurity and safety are the least understood concepts as indicated in the survey.
Findings of Quiz 2: The Basics of Budgeting, Saving and Borrowing
The second leg of the financial literacy quiz zoomed in on the basics: budgeting, saving and borrowing. Launched in September, it covers the period of launch until September., there are over 19,000 responses, with more females attempting to take the quiz and from the age group of 25-39 years old.

The first three questions concentrated on how to properly plan a monthly budget and how to compute for an emergency fund. Most quiz takers (66.8%) know that every month, they should at least make a budget plan and 88.4% know that the ideal amount of emergency fund should cover 3 to 6 months' worth of expenses. However, only ¼ of users know how to set a SMART Financial goal.

Regarding the basics of borrowing, almost all (95%) of quiz takers know that paying bills on time every month can help improve their credit score. A total of 77.1% also answered that a consumer finance company is an institution that could help them avail cash or product loans.

On the similar topic of loan application, 83% knows the concept of loan repayment but only half of respondents know what a cooling off period in a loan is about; 65% knows that there are different ways that could help them approve their loans (such as preparing requirements ahead of time, borrowing an amount that you can pay, etc).

Looking at the findings of the second quiz, majority of Filipinos have a proper understanding of the basics of some financial concepts but would need guidance on comprehending more specific terms. Regardless, the results of the second quiz show that the level of financial literacy in the country is promising and would continue to improve if taught properly.

This is where companies advocating for financial literacy come in. One of which is Home Credit Philippines, a longtime financial provider and financial educator both in global and domestic markets. Through Wais sa Home, their financial and digital literacy program, they address the concerns revealed in the survey through various initiatives and activities aimed at driving financial inclusion and raising financial literacy standards amongst Filipinos.

"Our business model and the focal point of our corporate social responsibility efforts is centered on responsible lending. We want to help create responsible borrowers and good payers through financial education and digital financial literacy," says Home Credit Philippines Chief Marketing Officer Sheila Paul.

To reach a wider audience and have a steady source of important financial and digital literacy concepts, Home Credit is launching its Wais sa Home website soon to allow more people to gain knowledge on basic money management and digital skills.
Spotlight is BusinessWorld's sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld's audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com. Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA.

# data[].attributes.attachment_link.title
Filipinos' financial literacy needs more push, Home Credit survey reveals - BusinessWorld Online

# data[].attributes.attachment_link.description
Recently, the pandemic pushed many Filipinos to be mindful of their personal finances. However, there's still immense concern on the state of financial literacy in the country.

# data[].attributes.body
Studies have revealed that money management habits formed in childhood stay into adulthood (Lucas, 2018). Particularly, World Bank (2015) has found that those who began saving as children tend to outperform their peers who did not develop the habit in their early childhood. Banko Sentral ng Pilipinas expounds on this finding and reasons that financially literate individuals are able to use their money wisely and protect themselves from various forms of fraud. Moreover, financially literate school children also have the ability to make a positive impact on their families and communities (BusinessWorld, 2019)

With this in mind, the persistently low levels of financial literacy among Filipinos can be said to stem from poor childhood education. Thus, proper financial education should be administered at a young age since several instances have also revealed that financial illiteracy does not improve after high school, but persists into college.

# data[].attributes.body
Low levels of financial literacy results in less savings, lower retirement planning, lower rates of asset accumulation, lower participation in the stock market, and higher levels of debt. Furthermore, savings which are important for the consumption of the household and the economy at a macroeconomic level is reduced due to the lack of savings accounts and proper spending habits.

A survey conducted by Philam Life found that many Filipinos are concerned about their own and their family's health, but not all of them are prepared to pay for medical costs in case of emergencies. The lack of financial literacy negatively affects their ability to financially prepare for unforeseen events. As a consequence, they seek out loans despite having unstable income to supplement their needs. However, financing your expenses through debt without a stable means of repayment results in even more financial constraints.

# data[].attributes.headline
Online Education Service: InvestaUniversity 

# data[].attributes.subject
Online Education Service: InvestaUniversity 

# data[].attributes.body
Investa, a leading financial education platform in the Philippines, created InvestaUniversity. InvestaUniversity is an online education service that provides free courses ranging from basic to advanced lessons about finances and investing to all. Their goal is to enable and assist Filipinos in their in their investing journey with the right tools, education, and technology.

They have successfully enrolled thousands of Filipinos in their free online courses, and helped them access financial products with the proper information at their disposal.

The free online courses are easily accessible, and the simple yet educational videos are easy to follow and understand.

https://www.facebook.com/Investagrams/posts/ansabe-ng-mga-investauniversity-students-weve-been-receiving-overwhelmingly-kind/1638837046285078/

# data[].attributes.attachment_link.readable_text
{{trade.Name}}

By {{trade.AuthorString}}

{{trade.LessonList.length > 1 ? trade.LessonList.length + ' Lessons,' : (trade.Durations || trade.Slides || trade.QuizCount > 0 ? trade.LessonList.length + ' Lesson,' : trade.LessonList.length + ' Lesson')}} {{trade.Durations && trade.Slides || trade.QuizCount > 0 ? trade.Durations + ', ' : trade.Durations }} {{trade.Slides && trade.QuizCount > 0 ? trade.Slides + ', ' : trade.Slides}} {{trade.QuizCount}} Quiz

View All

{{classlist.Name}}

By {{classlist.AuthorString}}

{{classlist.LessonList.length > 1 ? classlist.LessonList.length + ' Lessons,' : (classlist.Durations || classlist.Slides || classlist.QuizCount > 0 ? classlist.LessonList.length + ' Lesson,' : classlist.LessonList.length + ' Lesson')}} {{classlist.Durations && classlist.Slides || classlist.QuizCount > 0 ? classlist.Durations + ', ' : classlist.Durations }} {{classlist.Slides && classlist.QuizCount > 0 ? classlist.Slides + ', ' : classlist.Slides}} {{classlist.QuizCount}} Quiz

View All

{{classlist.Name}}

By {{classlist.AuthorString}}

{{classlist.LessonList.length > 1 ? classlist.LessonList.length + ' Lessons,' : (classlist.Durations || classlist.Slides || classlist.QuizCount > 0 ? classlist.LessonList.length + ' Lesson,' : classlist.LessonList.length + ' Lesson')}} {{classlist.Durations && classlist.Slides || classlist.QuizCount > 0 ? classlist.Durations + ', ' : classlist.Durations }} {{classlist.Slides && classlist.QuizCount > 0 ? classlist.Slides + ', ' : classlist.Slides}} {{classlist.QuizCount}} Quiz

View All

{{classlist.Name}}

By {{classlist.AuthorString}}

By {{classlist.AuthorString}}

{{classlist.TaglineLesson}}

View All

{{carousel.Description}}

{{carousel.CtaButtonLabel}}

{{LearnDashboard.UnivData.FeaturedForYou.FeaturedCourse.Name | stringDisplayLimit:50}}

By {{author.DisplayName}}{{author.Separator}}

{{classes.Name | stringDisplayLimit:50}}

By {{author.DisplayName}}{{author.Separator}}

{{classes.ExpertiseLevel }}

Go to InvestaDaily

1. a

2. a

3. a

Discover More Classes

# data[].attributes.attachment_link.title
InvestaUniversity | All Sources. One Platform.

# data[].attributes.attachment_link.description
trade.Name}} By {{trade.AuthorString}} {{trade.LessonList.length > 1 ? trade.LessonList.length + ' Lessons,' : (trade.Durations || trade.Slides || trade.QuizCount > 0 ? trade.LessonList.length + ' Lesson,' : trade.LessonList.length + ' Lesson')}} {{trade.Durations && trade.Slides || trade.QuizCount > 0 ? trade.Durations + ', ' : trade.Durations }} {{trade.Slides && trade.QuizCount > 0 ?

# data[].attributes.headline
BSP, DepEd, and BDO Foundation partner up. 

# data[].attributes.subject
BSP, DepEd, and BDO Foundation partner up. 

# data[].attributes.body
The BSP, DepEd, and BDO Foundation agree that the best way to foster financial literacy among future adults is to start practical financial managements lessons at a young age.

They signed a memorandum of agreement to advance financial education in the Philippines.

Under the agreement will be the development of videos as tools of educating young students about basic financial literacy concepts (e.g. saving, budgeting)

# data[].attributes.attachment_link.readable_text
The financial literacy level of the average Filipino remains alarmingly low-a problem that begins with poor childhood education that persists until their adult years, according to the country's financial regulator.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said Filipino adults could correctly answer only three out of seven financial literacy-related questions covering basic numeracy, computing compounding interest, fundamentals of inflation and investment diversification.

Citing the results of a study by the World Bank, the BSP said only 2 percent of Filipino adults answered all questions about financial literacy correctly.

"The study also showed that Filipinos lack specific knowledge to make informed financial decisions," the central bank said, stressing that financial education was an "imperative," considering the country's low financial literacy levels.

The same study indicated that money management habits formed in childhood stay into adulthood.

Those who began saving as children display better attitudes to saving, and tend to outperform their peers who did not develop the habit early in the areas of choosing financial products and services, monitoring expenses and planning for retirement, the central bank said.

"The BSP believes that a financially-learned citizenry can be more effective in productively contributing to the Philippine economy," BSP Governor Nestor Espenilla Jr. said. "To date, financial education remains a formidable task, one that requires coordinated multistakeholder action."

The central bank pointed to a growing body of literature indicating that a financially literate population was able to make better financial decisions, have higher levels of savings and diversified investments, and were more competent in managing debt.

These data suggest that the best way to nurture sound financial culture and behavior among future adults is to start practical financial management lessons at a young age.

As such, the BSP, the Department of Education (DepEd) and BDO Foundation will sign today a memorandum of agreement to advance financial education in the Philippines.

The agreement covers the development of videos as tools to teach basic financial literacy concepts like saving and money management in public schools.

These videos, designed for learners as well as educators, are accompanied by teaching guides to further equip and support the DepEd in mainstreaming financial education in the K-12 curriculum.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

For feedback, complaints, or inquiries, contact us.

# data[].attributes.attachment_link.title
Many Filipinos seen still 'financially illiterate'

# data[].attributes.attachment_link.description
The financial literacy level of the average Filipino remains alarmingly low-a problem that begins with poor childhood education that persists until their adult years, according to the country's financial regulator. In a statement, the Bangko Sentral ng Pilipinas (BSP) said Filipino adults could correctly answer only three out of seven financial literacy-related questions covering basic numeracy, computing compounding interest, fundamentals of inflation and investment diversification.

# data[].attributes.headline
Pairing Financial Education with hands-on experiences to Build Financial Literacy

# data[].attributes.subject
Pairing Financial Education with hands-on experiences to Build Financial Literacy

# data[].attributes.body
With a low turn-out of high schoolers taking financial literacy classes before they graduate, the organization Next Gen Personal Finance, pushes forward the urgency for a financial literacy mandate in more states through its goal "Mission: 2030" which aims to ensure that all students take a one-semester personal finance course before graduating from high school by the year 2030.

Zing (2020) iterates that financial literacy is not enough, and hence, students must also be exposed to hands-on experiences to further build their financial capability. In this manner, early intervention through well-thought out opportunities is the key to further engage children and tackle/catalyze generational wealth.

Moreover, the solution is not going to end at just providing financial literacy education. With the situation as it is amidst these crises, people must also be taught to utilize the safety nets that are accessible to them. Zing (2020) concludes that by providing the necessary resources and tools, more people would be both literate and financially capable.

Furthermore, the onset of the COVID-19 pandemic has stimulated and further increased the demand for online and mobile financial solutions. Hence, moving forward, the online and mobile space must also be secured to ensure the future of financial literacy and education.

# data[].attributes.attachment_link.title
Closing the Financial Literacy Gap | Teach For America

# data[].attributes.attachment_link.description
Educators and academics expose equity gaps in financial literacy education and offer solutions for ensuring all students have access to personal finance.

# data[].attributes.headline
DepEd expands financial education in K to 12 to improve literacy of Filipinos 

# data[].attributes.subject
DepEd expands financial education in K to 12 to improve literacy of Filipinos 

# data[].attributes.body
The Department of Education (DepEd), through the Bureau of Curriculum Development (BCD), has expanded and intensified the integration of financial education in the K to 12 Basic Education Curriculum to improve the financial literacy and capability of its learners, teachers, and personnel which will enable them to acquire financial health and financial inclusion.

DepEd issued its Financial Education Policy under DepEd Order No. 022, Series of 2021 which aims to help learners and teaching and non-teaching personnel to make sound financial decisions by making Financial Education an essential part of school lessons and activities for learners and provision of capability building opportunities for teaching and non-teaching personnel.

Students under the program are taught key financial concepts and skills on earning, saving, spending, budgeting, donating, investing, planning, consumer protection and entrepreneurship. They will also be taught how to open a savings account and help them manage their resources.

# data[].attributes.attachment_link.title
DepEd expands financial education in K to 12 to improve literacy of Filipinos | Department of Education

# data[].attributes.body
A collaboration between Manulife and Corazon Sanchez Atayde Memorial Foundation (CSAMF), this program aims to equip elementary students with Peso Smart learning kits that includes modules teaching children the basics of saving, budgeting, and investing. In addition, Manulife employees will train volunteer teachers and parents so they can guide the students’ learning progress (Manulife, 2020).

# data[].attributes.body
As evidenced by the 2018 PISA results, 80% of 15-year-old Filipino students did not reach the minimum level of proficiency in reading and had low scores in mathematics and science (Tomas et al., 2021). This outcome reveals the substandard general education in the Philippines which could significantly hinder individuals from maximizing the gains of financial education and other relevant efforts to promote financial literacy.

# data[].attributes.body
We have read news articles and journals discussing financial literacy in the Philippines.

We have enrolled and tried the online courses offered by InvestaUniversity.

A group member attended a financial literacy summit and listened to BSP Gov. Diokno's keynote speech.

The group is currently emailing Investa and members of the FinTech Alliance in hopes of understanding the challenges and solutions regarding financial literacy.

# data[].attributes.body
1. Representatives of the BSP who have delved into the topic of financial literacy to ask about the BSP's goal and plans regarding the issues and solutions.

2. Other Financial advocacy groups.

3. Professionals and entrepreneurs in the Fintech space.

# data[].attributes.body
From personal experience, we have observed that many young Filipinos have jumped straight into investing in very risky assets (i.e., cryptocurrency, derivatives, and NFTs) without fully grasping what exactly it is they are buying. Furthermore, there have been stories and posts about individuals using their life's savings as starting capital, which never ends well for most of them.

# data[].attributes.body
Interview and survey the target demographic: This will enable us to understand what our target demographic is thinking; how they perceive financial tools and how they make financial decisions. Conducting interviews and surveys will help us create effective solutions.

Try and test out current solutions in hopes of identifying gaps: To ensure that the needs of the young are addressed we should find out if the  solutions are effective. If not, we have to keep innovating so that more are informed about the value of money.

# data[].attributes.headline
Behavioral Influences on Financial Decisions

# data[].attributes.subject
Behavioral Influences on Financial Decisions

# data[].attributes.body
In order to build effective financial literacy programs, there is a need to understand how Filipinos think and behave when it comes to financial matters. According to Lusardi & Oggero (2017), there are individuals who prefer instant gratification which overrides their urge to put money away in a savings account. There are also many people who prefer living for today with lack of regard for their future.

In the case of the Philippines, Ledesma (2021) notes that most Filipinos have an easy-go-lucky attitude in which they leave their future to fate. This included parents who mostly rely or expect their children to take care of them when they get old. Furthermore, the YOLO mentality is also evident among Gen Zs and Ys. With this mindset, the younger population are more inclined to to spend on things or experiences that would make them happy. Hence, putting the idea of saving and investing at the bottom of their priority list.

This attitude of Filipinos towards money and their behavioral tendencies would lead to ineffective programs if not properly considered.

# data[].attributes.body
In line with utilizing the power of social media to entice younger Filipinos in learning more about financial education, a bigger impact can be made when the mode of instruction is delivered  by someone from their own age group. Because young people listen to their peers more than adults, a peer-to-peer strategy is beneficial, and the collaborative approach enables the youth to  become change - makers in their own communities. As such, NEDA (2018) proposes to empower adolescents to take charge and be the mode of delivery when it comes to teaching younger Filipinos about the importance of financial education.

# data[].attributes.body
According to the PISA 2018 results, about 94% of 15-year-old students often speak in a different language other than the english language at home. The country also scored low in reading and mathematics. Given that English is used as a medium of instruction for most existing efforts and FinTech products, some Filipinos would not be able to keep up with the educational initiatives or use the services due to their lack of comprehension (OECD, 2019).

# data[].attributes.headline
Over 2,400 teacher certified to provide financial education in primary schools 

# data[].attributes.subject
Over 2,400 teacher certified to provide financial education in primary schools 

# data[].attributes.body
Cha-Ching is an online interactive platforms which promotes and teaches children about earning, saving, spending, and donating. Together with Pru Life UK and Junior Achievement (JA) Philippines, they created the Cha-Ching curriculum. The curriculum uses the Cha-Ching Money Smart Kids materials integrated in the Edukasyon sa Pagpapakatao subject of Grade 4 students.

They have certified over 2,400 teachers to teach financial education under the 2022 Cha-Ching Curriculum Financial Accreditation (CCFA) program for the school year 2021-2022.

The program provides teachers with structured lesson plans, which is meant to ensure good learning outcomes such as the integration of financial literacy for students. Furthermore, they created an online assessment tool that accredits and recognizes teacher for effectively teaching the program's curriculum.

Between 2016 and 2021, the organization Cha-Ching was able to connect with 500,000 Filipino students and gather 11,910 teachers to teach the curriculum.

# data[].attributes.attachment_link.readable_text
Teachers from around the Philippines recognized in accreditation program developed by Pru Life UK, Prudence Foundation, and JA Philippines

Pru Life UK, together with its community investment arm in Asia and Africa, Prudence Foundation, and Junior Achievement (JA) Philippines, have certified over 2,400 teachers to teach financial education under the 2022 Cha-Ching Curriculum Financial Accreditation (CCFA) program for the school year 2021-2022.

Cha-Ching was introduced back in 2011 as an online, interactive platform to promote and teach children about the four money-smart concepts-Earn, Save, Spend, and Donate. In 2016, Pru Life UK partnered with JA Philippines to have the Cha-Ching Curriculum, using the already successful Cha-Ching Money Smart Kids materials, integrated in the Edukasyon sa Pagpapakatao (Values Formation) subject of Grade 4 students, in coordination with the Department of Education (DepEd).

The objective is to provide an organized approach and structured lesson plans for teachers to ensure good learning outcomes for the students. It is also meant to adopt timely and proactive measures to intensify the integration of financial literacy in the K to 12 basic education system curriculum in the country.

In order to supplement the financial education curriculum implementation, the CCFA, an online assessment tool, was created. This tool is to accredit and recognize the hardworking teachers for their mastery in teaching the money-smart lessons of the Cha-Ching Curriculum.

"The idea of earning money, having to save, having to have a budget, having expenses, and understanding what expenses are versus savings, these are issues that affect all of us. By the age of seven, basic concepts related to financial behavior will have already been formulated or developed," says Marc Fancy, executive director at Prudence Foundation.

"Our goal is to reach even more Filipino students and teachers in this continuing commitment for financial education and inclusion. It is our fervent hope that the Financial Education Policy will usher greater momentum for Cha-Ching to help more Filipino children and their families get the most out of life," says Emeren Vallente, SVP and chief legal and government relations officer at Pru Life UK.

By the age of seven, basic concepts related to financial behavior will have already been formulated or developed.

"We at JA are in the business of empowering young people and what better way to do this than recognizing outstanding teachers and outstanding teaching?" says Maziar Sabet, president and CEO of JA Asia Pacific.

As the highlight of the celebration, various top and special awards were handed over to Cha-Ching teachers and institutions who have shown exemplary commitment, dedication, and brilliance in teaching Filipino youth the value of financial literacy. About 40 CCFA exam topnotchers from the Philippines were chosen to attend the first-ever regionwide Cha-Ching Financial Literacy Conference on Feb. 18 and 19.

Cha-Ching will continue in its drive to foster financially literate youth, alongside teachers and partners in the education sector, through ceaseless improvements and innovations, toward expanding its reach beyond the current 170,000 student beneficiaries this year.

Between the years 2016 and 2021, Cha-Ching was able to connect with close to 500,000 Filipino students. Additionally, just in 2021, Cha-Ching was able to garner 6,747 educators to teach the Cha-Ching Curriculum in participating schools in the Philippines, bringing the cumulative number to 11,910 teachers from 2016 to 2021.

SIGN UP TO DAILY NEWSLETTER

CLICK HERE TO SIGN-UP

# data[].attributes.attachment_link.title
Over 2,400 teachers certified to provide financial education lessons in primary schools

# data[].attributes.attachment_link.description
Teachers from around the Philippines recognized in accreditation program developed by Pru Life UK, Prudence Foundation, and JA Philippines Pru Life UK, together with its community investment arm in Asia and Africa, Prudence Foundation, and Junior Achievement (JA) Philippines, have certified over 2,400 teachers to teach financial education under the 2022 Cha-Ching Curriculum Financial Accreditation (CCFA) program for the school year 2021-2022.

# data[].attributes.body
According to a study by Yates and Ward (2014) high school students who took a personal finance course did not report better financial behavior several years later in contrast to those who did not take it. However, this is not the only issue as policymakers and educators put less value on personal-finance courses which was found as a main contributor to the US' poor financial literacy status (Iacurcu, 2019).

Having said that, this may be a contributor to the lack of financial literacy among Filipinos as those with access to financial resources do not take it seriously.

# data[].attributes.headline
Financial Illiteracy and the Filipino students

# data[].attributes.subject
Financial Illiteracy and the Filipino students

# data[].attributes.body
Most students fail to develop financial literacy skills at a young age because most are financially dependent and do not make any important financial decisions, leaving it to their parents or guardians (Razafimahasolo et al., 2016). Increasing the financial literacy skills (e.g., saving) would help them make informed financial decisions, which develops into a lifelong skill as they grow older.

The first chance many students begin to make financial decisions on their own is when they enter college. However, they are rarely prepared to face big and important financial decisions. Their mistakes at this stage, although not detrimental, are still enough to negatively affect them mentally and financially. Furthermore, during the COVID-19 pandemic, more youths and millennials have become more aware of their financial situation and investing opportunities. Although there are many financially savvy Filipinos, there are still those who are not and are unaware of many basic financial concepts and procedures, which makes them susceptible to scams.

This lack of financial literacy skills are found to be one of the reason why students are not personally and academically successful and why they do not seek higher education.

Financial management is a skill that relates to individual growth (Razafimahasolo et al., 2016). It also helps them to develop good spending and saving habits and understand investment risks. Without the necessary skills in financial decision making, they face higher financial strains and problems.

# data[].attributes.body
Contact Details: maria.fe.dabbay@dlsu.edu.ph

Verified on: May 25, 2022

Comments:

It is a worldwide problem (regardless if developed or not), in which the Philippines is not an exemption.

Three main aspects of financial illiteracy in the Philippines would be unsound financial decisions on spending, borrowing, and investing (including susceptibility to financial scams).

The main problem in the Philippines is saving, which is a pre-requisite for investing

There is still a lot to research on financial literacy in the Philippines. It’s still untapped but we do recognize that this problem is important to address.

# data[].attributes.body
Low levels of financial literacy have been correlated with low financial capability, high debt, and inefficient spending (Lusardi, 2019). While financial illiteracy affects us on an individual level, the poor financial decisions attributed to this lack of knowledge spills over to households and the rest of the economy (Mitchell & Lusardi, 2015).

# data[].attributes.body
According to the Bangko Sentral ng Pilipinas (BSP), the Philippines has one of the lowest savings rate in Southeast Asia. Filipinos struggle to form consistent savings habits that increases the probability of being unable to pay for their needs during emergencies or sickness. That also implies Filipinos could fall into debt as they try to use loans to cover their expenses.

These are the five most common reasons cited by Filipinos for not saving:
1. They do not have money left for saving. The lack of budgeting expenses and the practice of "paying yourself first" are two possible causes for having no savings.
2. They believe in leaving things to fate, thinking that things will work out in the end. They fail to realize that only when you save regularly, budget properly, make prudent investments, and be financially proactive they can become financial secure.
3. They do not know how to save. It is possible that they have a difficulty in understanding financial services and practices.
4. They have accumulated debt. They argue that they are unable to save because of all the loans that must be paid off first.
5. They think that it is too late for them. A way of thinking that would have been addressed with the proper financial information and education, especially at a young age.

# data[].attributes.attachment_link.readable_text
Did you know that the Philippines has one of the lowest savings rates in Southeast Asia? According to a Bangko Sentral ng Pilipinas survey in 2014, only 1 in 4 Filipino households has savings.

This is worrying, as it means that in the event of an emergency or sickness, majority of Filipinos have no means to fund their needs. This also implies that they could fall into debt or worse, not be able to cover their emergency needs.

What keeps most Filipinos from saving? Unfortunately there is no one answer. It's been argued that the Filipinos' fatalistic or easy-go-lucky attitude prevent many from getting into the savings habit. There is also the lack of discipline and commitment to stay on the savings path. After all, building up savings starts with giving up a portion of your regular income and having the discipline to do this continuously, while resisting the urge to dip into these funds for whimsical reasons.

Let's look at the 5 most common reasons cited by Filipinos for not saving, and, if it applies to you, we also share the steps you can take to address this.

Reason #1: Not having enough money left for savings. This is the most common reason cited by people for not saving. However, if you take this as an excuse, then you will never be able to save at all. The first commandment in personal finance is: Pay Yourself First. Make it a habit to save first before spending the rest of your income. You have to be disciplined and bite the bullet if need be, giving up some expenses in order to make way for savings.

Reason #2: Leaving things to fate. Trusting that destiny will take care of our finances is one of the most dangerous things that you can do. Although it may appear that things sometimes straighten themselves out, the truth is that you have to do your part to make sure that you have some savings left. When you've figured out how much you can regularly save, make arrangements to have a savings account you cannot easily access, and make sure you put funds into this account regularly. Being proactive in building up your savings is always safer than simply leaving things to fate.

Reason #3: Not knowing how to save. No diploma required to learn how to save - just your commitment to improve your financial situation. There is a wide range of savings accounts or instruments today, depending on your time horizon and risk appetite. Consult a financial professional on the options that are available for you. Getting started on the savings route can be hard, and staying on it too. But look towards the future and the peace of mind having a nest egg can bring, and that's your best motivation.

Reason #4: Being buried in debt. Those who have loans to pay often argue that they could not save because they have to pay off their loans first. However, this mindset will keep you from being able to save any money at all, especially if you have a huge loan to pay off. Even as you set aside funds to pay for your debt, do set aside an amount that would go into your savings. This ensures that you will not find yourself unprotected should an emergency happen.

Reason #5: It's too late for me. It's never too late, and for that matter, never too early either. To save, it is important to plan for how you will save and to make it a part of your budget. This is why it is important to have a budget that will guide you with your spending, and that will help you to minimize extraneous expenses, hopefully to have more money to add to your savings. This entails planning what to spend for in advance, and setting realistic limits for yourself. Having a simple spreadsheet or a list will help you keep your budget in check.

Saving is the first step towards ensuring your financial health. This is why you have to put an end to the endless excuses and get into the savings habit now. Try not to think of saving as a chore and don't think of it as something you can do in the future when you have more money. Remember, the money you save now ensures a more secure future for you and the people you love.
Grow Your Money is an editorial partnership between News.abs-cbn.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances. Visit www.citibank.com.ph for more information.

# data[].attributes.attachment_link.keywords[]
5 reasons filipinos don't save money | abs-cbn news

# data[].attributes.attachment_link.description
Did you know that the Philippines has one of the lowest savings rates in Southeast Asia? According to a Bangko Sentral ng Pilipinas survey in 2014, only 1 in 4 Filipino households has savings. This is worrying, as it means that in the event of an emergency or sickness, majority of Filipinos have no means to fund their needs.

# data[].attributes.body
In relation to the poor quality of early education in the Philippines, during the years 1999, 2003 and 2019, Filipino students aged 14-15 participated in the In the Trends in International Mathematics and Science Study (TIMSS). The results revealed that the mathematical abilities of Filipino students are below the global average and have been significantly declining. Even in the OECD's 2018 Programme for International Student Assessment (PISA) for 15-year-olds', the Philippines second lowest in mathematical literacy. This deteriorating performance poses a challenge to solving financial illiteracy as mathematics and reading are among the basic foundations of financial literacy (Baron, 2015).

# data[].attributes.body
Based on the 2019 OECD/INFE Report on Financial Education, all 17 economies that responded in the OECD survey have implemented financial programs delivered through traditional channels-  printed materials, money museums, national student competitions, entrepreneurial and finance courses and TV programmes to name a few. All economic but except 1 have also use digital tools and platforms as their channel,

Apart from that, countries like Hong Kong, China  Indonesia, Mexico, Philippines and Thailand have financial initiatives that will cater to groups such as children, students, parents, women, school teachers etc.

As for financial education in schools, only Brunei Darussalam and Japan teach financial education in all education levels. At the lower secondary level, only 15 economies have integrated education in their school curriculum/standards/learning objectives . 14 have included it in the curricula at the  upper secondary and the primary education level. Meanwhile, majority of the economies have not incorporated financial education at tertiary, post-secondary non-tertiary, and the early childhood education  (OECD, 2019)

Several of the APEC economies are at the advanced stage of strategy development on financial education. However, we have to continuously monitor and evaluate the financial education initiatives to develop innovative solutions as there are gaps that still needs to be addressed. For instance, Financial education should be introduce at the early childhood education level so that children develop good financial habits.

.Apart from that, the government must continue collaborating with private sectors e.g financial institutions, new media and private schools, to raise awareness and create effective initiatives.

# data[].attributes.body
With all of that said, there have been a considerable number of programs and strategies with the aim of addressing financial illiteracy in the Philippines. However, evaluations done to test these initiatives have been severely lacking, resulting in our uncertainty of its effectiveness.

As such, tools to measure financial literacy in the country should be implemented and developed. These may be through national or private surveys that include a standardized set of questions which cover the dimensions of saving, investing, and risk management (OECD, 2019).

By knowing the impact of prior programs, we would be able to create solutions that are more targeted and effective.

# data[].attributes.body
Financial knowledge does not necessarily equate to good financial behaviors as individuals can still make irrational decisions. In a survey conducted by World Bank in 2012, it was reported that most respondents in middle income countries underperform in terms of self-discipline  particularly in budgeting, monitoring expenses and saving. Apart from this it was also seen that older people are more likely live within their means and not overspend relative to their younger counterparts (World Bank, 2014).

# data[].attributes.body
Should the problem of poor saving habits remain unaddressed, solving financial illiteracy would be even harder as savings can help people manage risks and accumulate wealth (Qazi, 2020) such that they are able to avail of financial technology and invest in their own wellbeing.

# data[].attributes.body
https://www.youtube.com/watch?v=Ciks0yHt2vI

# data[].attributes.attachment_link.readable_text
0:00 / 6:50•Watch full video

# data[].attributes.body
For low-income families, lending can be both an opportunity and a risk. For some, credit may be the path to self-reliance; however, it can also be the stumbling block. With debt having the potential to become a sinkhole, especially when one is unable to manage their debts properly, an individual is prohibited from progressing financially (Qazi, 2020)

Savings, on the other hand, is a critical tool for the poor that must be utilized to withstand financial shocks and take advantage of income-generating opportunities. This allows for the improvement of the poor's ability to manage cash flow —thereby, addressing income inequity, reducing the impact of the dry seasons. In this manner, the poor finally become more resilient in the face of shocks, as they are ultimately empowered to better their financial and personal wellbeing in the face of their communities.