MANY FILIPINOS are suffering from “apparent financial insecurity” stemming from the lack of financial literacy, which is hampering their ability to cope during a “once-in-a-lifetime pandemic,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

“Aside from lack of budget, lack of awareness and perceived high costs are often cited by respondents as key reasons for not opening an account, not saving, not using e-payments and not getting insurance,” Mr. Diokno said in an online speech delivered at the Financial Literacy Summit organized by The Global Financial Investors Saturday.

Mr. Diokno cited survey data which show Filipinos have little understanding of compound interest, the effect of inflation on buying power, and investment risk.

He also noted that research showed Filipinos scored low in daily money management and long-term financial planning despite having forward-looking attitudes.

“This limitation is highlighted in unexpected situations such as the pandemic, where, more than ever, preparedness for the proverbial rainy day is brought to the fore,” Mr. Diokno said.

World Bank data in 2017 indicate that only 34.6% of adult Filipinos have an account with a formal banking institution while the rest of the population rely on non-banks to obtain financial services.

The BSP hopes to bring this up to 70% by 2023.

Mr. Diokno said more than a third of Filipino adults struggle to meet their regular spending needs and resort to loans when emergencies arise.

“The most vulnerable sectors have no bank accounts where social assistance can be quickly channeled,” Mr. Diokno said.

Mr. Diokno also said only 18% have insurance while 3% have invested in financial instruments.

“Nearly half of adults (48%) have savings, but 68% of them keep savings at home,” he added.

During the pandemic, more Filipinos used digital payments. Mr. Diokno has said the volume of transactions on InstaPay and PesoNet surged 57% and 325%, respectively in April and May.

In 2018, volume and value of digital payments totaled 10% and 20% respectively, of all transactions, according to a report from Better-Than-Cash Alliance. This compares with 1% and 8% by volume and value in 2013.

The central bank hopes to have 50% of all payments by volume and value coursed through electronic means by 2023. Mr. Diokno has said the pandemic surge in such payments could help it hit the target earlier.

“As we shift to the new economy, fostering financial education within the family — from grandparents, parents and children — is essential for the well-being of citizens especially in times of crisis,” Mr. Diokno said. — Luz Wendy T. Noble