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Boosting Filipinos’ financial literacy, one program at a time

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Expo participants having fun playing the Praxis Game. — www.bsp.gov.ph

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.

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