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A survey
conducted by a bank late last year revealed that only
one out of 10 Filipinos makes an effort to save and that
the average Filipino’s savings will only last nine weeks
if they lose their jobs tomorrow or get sick and unable
to work.
About a
third said their savings would run out in less than four
weeks. The survey also showed that seven out of 10 are
not confident of their financial future and unsure if
their needs during retirement will be covered
adequately.
The
disturbing figures confirmed what has long been known:
that Filipinos have very low financial IQ.
The
survey bared this out: more than half of the respondents
feel they have average or poor overall understanding of
personal finance and money management. What is more
disturbing about the poor statistics is that those who
participated in the survey have an average monthly
income of P30,000. That can only mean one thing:
millions of ordinary Filipinos at the lower-income
brackets are in a far worse financial condition.
Obviously, there is a need to upgrade the knowledge of
ordinary citizens about personal finance. There are
actually many Filipinos who have the capacity to save
but, unfortunately, are unable to do so or maximize
their savings due to lack of financial savvy.
Improving people’s financial literacy can also save them
from huge losses. Investment scams carried out by the
likes of Multitel, Francswiss, Performance Investment
Products Corp. and very recently Royal Manchester Five
Trading Corp. continue to thrive because the thousands
who have been ripped off of their billions do not have
the financial smarts to identify a dubious scheme or
understand what are realistic returns on their
investments.
It’s a
good thing that the Philippine Deposit Insurance Corp. (PDIC)
has initiated the integration of financial literacy and
savings consciousness in the secondary curriculum of
some 5 million public high-school students throughout
the country.
In June
2007, PDIC turned over to the Department of Education
copies of the Teacher’s Guides in high-school values
education and economics for distribution to 5,000 public
secondary schools.
PDIC has
also tapped private-school organizations and encouraged
them to adopt the use of the Teacher’s Guides. With the
cooperation of the organizations under the Coordinating
Council of Private Educational Associations, the
financial-literacy project initiated by PDIC is expected
to benefit some 6.3 million high-school students
annually.
To
further enhance the savings consciousness among the
youth, PDIC worked with the Commission on Higher
Education and the Philippine Council of Deans and
Educators in Business to enhance the Bachelor of Science
in Business Administration curriculum in college. To be
integrated into some of the subjects are discussions on
the contribution of deposit insurance and savings
mobilization in helping maintain stability in the
financial system, as well as the importance of financial
literacy, savings and responsible banking.
With the
inclusion of the college level, the PDIC project will
reach out to a total of 7 million high-school and
college students every year.
Targeting the youth, who are effective change agents, to
learn about the basics of personal finance is a splendid
idea. Unfortunately, the youth can’t do much to improve
the economic condition of their respective families if
those who bring food to the table and pay for their
expenses have poor financial IQ.
In
tandem with integrating financial literacy into the
school curriculum, there ought to be a program which
specifically targets adults who are most in need of
financial education.
A
financial-literacy program for adults would be harder to
implement. First, adults are more stubborn to learn new
things than young ones. Second, it’s hard to find a
common venue (like a classroom) where such a program can
be carried out. Third, it’s going to cost money and a
lot of effort to reach out to a significant number of
people. Unless, those who are capable of teaching start
to share some of the things they know on their own
initiative.
I
recently launched PinoySmartSavers.com, a modest
personal finance web site that teaches ordinary
Filipinos about effective saving, expense and debt
management, retirement planning and smart investing,
among others.
Acknowledging the fact that majority of Filipinos are
not computer-literate and have no access to the
Internet, I also initiated a grassroots
financial-literacy program which is carried out through
free short talks to schools (graduating college students
and public-school teachers), nongovernment
organizations, cooperatives and assemblies in barangays.
Early
on, it became apparent that implementing the project is
not going to be easy. A few groups and individuals we’ve
talked to look at us as if we are out to dupe them of
their money or mistakenly think we’re selling them
insurance policies or offering loans. They are really
clueless on what we are trying to do.
Take the
case of a public-school district supervisor we
approached recently. We wanted to get her endorsement
for the project to make it easier for us to convince
school principals and teachers within her district to
listen to the free talk. We were brushed aside by the
supervisor, saying that teachers won’t benefit from the
talk because their income is too small.
She
could not be more wrong; she is unaware (a side-effect
of low financial IQ) of the fact that low-income earners
need the most help in managing their meager financial
resources.
We have
since changed our strategy. Instead of approaching
groups individually, we broadcast our financial-literacy
program to different organizations and just wait for
takers. It is hard to force yourself on people who feel
they don’t need any assistance; it is equally difficult
to teach people who don’t want to be taught.
We
resolved to offer our free talks only to organizations
that show a keen interest in helping their members learn
about money management and care about their financial
future.
If you
wish to participate in this grassroots
financial-literacy program, feel free to contact us
through our e-mail address or at (0917) 502-3149. We
also welcome volunteer speakers and sponsors.
To make
a significant impact, we need more people to teach and
groups to organize talks in different localities. If Jun
Lozada can make the rounds in universities to speak
about corruption in government, I don’t see any reason
why a volunteer team can’t go around preaching the value
of saving and money management to all those who care to
listen.
****
Alvin T. Tabañag is a registered financial planner and a
member of the RFP Institute and the Association of RFPs
in the Philippines. He is the founder and training
director of AdvantagePlus Consulting and creator of
www.PinoySmartSavers.com, which is dedicated to
promoting a culture of savings among Filipinos through
financial education. Comments and questions about the
article and other queries may be e-mailed to
message@pinoysmartsavers.com.
Join the 10th RFP Program (April 12 to May 31, 2008).
Visit www.rfp-philippines.com or inquire at info@rfp-philippines.com/Tel.
No. 634-2204. |
