A survey conducted by a bank late last year revealed that only one out of ten Filipinos make an effort to save and that the average Pinoy’s savings will only last nine weeks if they lost their jobs tomorrow or get sick and unable to work. About a third said their savings will run out in less than four weeks. The survey also showed that seven out of ten 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 (PIPC) and very recently Royal Manchester Five Trading Corp (RMF) 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 Corporation (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. Last 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 (COCOPEA), 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 (CHED) and the Philippine Council of Deans and Educators in Business (PCDEB) to enhance the Bachelor of Science in Business Administration (BSBA) 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 out 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. Firstly, adults are more stubborn to learn new things than young ones. Secondly, it’s hard to find a common venue (like a classroom) where such a program can be carried out. Thirdly, 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 website that teaches ordinary Filipinos about effective saving, expense & 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 & public school teachers), NGOs, cooperatives and assemblies in the barangays.

Early on, it became apparent that implementing the project is not going to be easy. A few groups & 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 as to 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 email 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 & money management to all those who care to listen.

Posted: March 24, 2008
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