BANGKO Sentral ng Pilipinas Governor Amando Tetangco Jr. (left) and the late Philippine Deposit Insurance Corp. president Michael Osmeña believe that financial literacy education in the Philippines should be a shared advocacy of financial regulators.

TWO pillars of the country’s financial safety net are rigorously working to increase the amount of savings derived from remittances from overseas Filipino workers (OFWs).  OFWs allocate only a small percentage of their remittances for bank deposits, placements in financial instruments, or investments in small and medium enterprises (SMEs), the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. (PDIC) found out.

According to the central bank’s recent Consumer Expectation Survey, only 16 percent to 20 percent of every migrant Filipino worker’s remitted money has been directed to savings. Instead, the families of these OFWs have been spending the remittances they received on meeting their household needs. In fact, more than 50 percent of the families surveyed said they spend their remittances on education followed by debt payments and medical expenses.

For the national savings rate to improve, the BSP and the PDIC believe that it is necessary to start the advocacy with the OFWs. After all, they are the ones who keep the Philippine economy afloat.

That is why these bank regulators have launched financial literacy campaigns wherein OFWs and their beneficiaries are encouraged to venture into SMEs like minigrocery stores, multipurpose stores and bakeries, among many others. “[We want] to help OFWs make informed and responsible decisions with their hard-earned money,” the late PDIC president Michael Osmeña said. (Note: The interview was done a few days before he died.)

It was only this year that the PDIC began taking part of the financial literacy campaign of the BSP, which launched it in 2006.

Recently, the state’s insurer of bank deposits and the country’s central monetary authority went to Bacolod and Quezon City to inform OFWs and their beneficiaries the opportunities of savings and investments in business ventures.

The BSP and the PDIC have also been in various cities—San Fernando in La Union, Tuguegarao in Cagayan, Baguio in Benguet, San Fernando in Pampanga, Calamba in Laguna, Legazpi in Albay, Tacloban in Leyte, Iloilo City, Cebu City and Davao City—where they have met over 1,500 OFWs and their families with regard to their investments.

“Let us help Filipinos manage their personal finances well, transform them into net savers and help them identify options that can ultimately lead to wealth creation,” BSP Governor Amando Tetangco Jr. said.

In an earlier interview, Osmeña noted: “Best displayed by their willingness in acquiring financial literacy, vigilance of OFWs and their beneficiaries can be a useful tool in making sure that their savings and investments in banks are safer and more secured.”

Tetangco hopes that this savings ethics will cascade to their children and the next generation.

Other projects

THE central bank chief also said the financial literacy campaign has inspired the two agencies to pursue other projects.

In 2006 the BSP launched its coin-recirculation program “Tulong Barya Para Sa Eskwela” to make people conscious that coins are crucial, as well as to guarantee efficient spreading of coins that will enable the BSP to save production costs.

The PDIC, meanwhile, has been teaching the youth to save in banks, which, it believes, will help maintain confidence in the banking system. 

“Instilling the savings ethic will motivate people to save which could provide people a springboard for financial security,” said Osmeña, who passed away last month. “On the national level, savings consciousness and savings mobilization will help spur capital formation and investments.”

The efforts of the PDIC made it possible to produce teachers’ guides in values education and economics, which have been already distributed for possible adoption in all public high schools nationwide. These guides are expected to reach 5 million students in 5,500 public high schools nationwide. It is likely to reach 6.3 million high-school students every year.  

Also, the PDIC will integrate into college courses updated information on the Philippine financial system, responsible banking and saving, and information on the Financial Sector Forum, a high-level interagency group.

The BSP, on the other hand, continues to engage college students through lectures and dialogues about the economy and the financial system. It has even produced video materials, primers and books for college students.

In April the BSP, the Department of Education and the Economic Policy Reform and Advocacy developed lessons on the values of thrift, prudence and savings that will be incorporated into the public elementary-school curriculum.  “If we can turn the tide with our present crop of elementary pupils, this will have long-term benefits for them and ultimately, our country,” Tetangco said.

The BSP also uses its Money Museum at its head office to make visitors aware of the country’s economic history through the evolution of Philippine currency and to teach visitors how to detect counterfeit banknotes and coins. The Money Museum has about 60,000 visitors a year, most of them students.      

Finally, the BSP is setting up economic and financial literacy centers in its regional offices and branches all over the country to promote better understanding and appreciation of the concepts of saving, money management, economics and the financial system.

To achieve a higher degree of information dissemination on existing projects, the BSP and the PDIC have given briefings in the regions and have mapped out a number of regional briefings in the coming months.

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