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FILIPINOS may say they are satisfied with the quality of
their lives, but few feel they are financially secure,
with the average Filipino having just nine weeks’ worth
of savings to tide him through in the event of job loss
or disability. Majority say they are not financially
ready for retirement, and nearly half expect financial
assistance from their adult children when they retire.
These are among the highlights of a
study commissioned by Citibank on the financial
intelligence of consumers across the Asia-Pacific
region, including those from the Philippines.
The survey also scored respondents on 11
different questions closely related to financial
well-being to come up with a country financial quotient,
with a maximum possible score of 100. The
Philippines
had an average financial quotient of 47.8, with 62
percent of respondents having a score of less than 50.
This score is hardly surprising,
considering that 53 percent of res-pondents said they
have average or poor overall understanding of money
management and personal finance. In fact, while
Filipinos generally appreciate the value of saving, only
a handful or 33 percent of respondents said they are
able to save every payday as a habit. Another 51 percent
reported saving money when they can, while 14 percent
admitted to rarely saving.
Conducted by Australia-based CxC
Consulting, the Citi Fin-Q survey covered 400
respondents across the country. Respondents were between
18 and 40 years old, owned either a bank account or a
credit card, and had an average annual income of
P376,000. The survey was administered online in the last
quarter of 2007.
A troubling finding was that only 31
percent reported to having enough savings to last them
through the next three months if they continued to pay
their regular expenses, with the average Filipino having
an average of just nine weeks’ worth of savings. In
fact, 33 percent of respondents said their savings would
only last from one week to four weeks. Another 14
percent admitted they did not know how long it would
take before they ran out of money.
Alongside this was the finding that only
59 percent of respondents felt secure in their present
jobs. “If they lost their jobs tomorrow, or suddenly
fall ill and cannot work, there will be nothing to tide
them over the hard times,” said Agustin Davalos,
Citibank Philippines retail bank director.
The study also showed that only a
minority, or 33 percent of respondents, are able to
stick to a budget. Majority, or 58 percent of
respondents, revealed they made a budget but did not
follow it, while 9 percent said they did not plan their
budgets at all. Abby Limqueco-Chan, vice president for
marketing, noted that those found to being regular
savers are the same people who were able to stick to
their budgets.
As a result, managing cash flows was
shown to be an important concern, with 60 percent of
respondents reporting to be revolvers of credit card
debt. Of this number, 22 percent reported to paying the
minimum amount on their outstanding credit card bills,
while 38 percent said they paid more than the minimum
amount due. The remaining 40 percent said they paid
their card bills in full.
Long-term financial planning for
retirement and emergencies was also shown to be lacking.
Only 32 percent of respondents said they had enough
insurance cover, even if another 36 percent said they
had life insurance. Another 32 percent said they had no
insurance coverage at all.
Retirement planning was also shown to be
quite poor, with 17 percent having no idea how much they
will need to retire and another 28 percent reporting
they have not started planning for retirement at all.
Only 13 percent said they have a retirement plan and are
on track to cover their retirement needs. The remaining
42 percent said they were not too sure about what they
needed but had some savings. Moreover, only 5 percent of
the respondents had already prepared an updated will.
Still, Filipinos remained optimistic
regarding their financial future and were generally
satisfied with their quality of life. At least 77
percent had a positive outlook on their financial
future, with 19 percent saying they were very optimistic
and 58 percent claiming to be optimistic about the
future. Only 23 percent admitted to being worried, and
on cross tabulation, were shown to be the same
individuals found to be financially ill-prepared and not
regular savers. Chan noted that in general, younger
respondents were more optimistic than older ones, “which
is natural because they have less financial pressures.”
Moreover, only 36 percent of respondents
reported they are not satisfied with the quality of
their lives. These, noted Chan, were the people who had
less income, were more worried about their financial
future, and were not secure in their current jobs. At
least 58 percent said they were satisfied, while another
6 percent reported they were very satisfied with their
lives. These were the same respondents with a better
approach to expense management and savings. |
