By Abigail Marie P. Yraola, Deputy Research Head

IN THE LATTER PART of 2023, Cagayan de Oro City Rep. Lordan G. Suan proposed House Bill (HB) No. 9162 or the Financial Literacy Education Bill to incorporate financial literacy into the senior high school education curriculum.

In the bill’s explanatory note, he said that the proposed measure aims to equip students with knowledge, skills, and attitudes necessary for managing personal finances, making informed financial decisions, and contributing to the economic development of the nation.

If enacted, students will learn the basics of personal finance, including budgeting, saving, investing, credit and debit, insurance, taxes, and how to apply them in real-life situations.

The HB mandates the Department of Education (DepEd), in consultation with the Department of Finance (DoF) and Bangko Sentral ng Pilipinas (BSP), to develop a financial literacy curriculum.

“This bill recognizes the role of the youth in nation-building and its role in molding citizens with values that will enable them to become assets of the country,” the Education department said in a Viber interview.

“The DepEd will also provide educational materials for teaching financial literacy and conduct training programs for teachers who will deliver this instruction,” it added.

The central bank reiterated this commitment, with public and private institutions to integrate financial literacy lessons into the basic education system.

Robert Dan J. Roces, chief economist at Security Bank Corp., said that this is a welcome development for financial literacy.

“The ability to budget, save, manage debt responsibly, and avoid predatory products sets them up for lifelong success, fostering economic participation and contributing to national stability,” he said.

For BDO Network Bank, it is indeed crucial to build financial literacy in one’s formative years.

The Sy-owned rural bank said that this is critical to help families rise above and overcome economic challenges and achieve their aspirations.

Being financially responsible is a lifelong pursuit that must start early, the bank said.

“We have improved but are still lagging behind our neighbors in the region in assessing financial literacy of young Filipinos,” the bank said.

Multisectoral effort has been invested in educating overseas workers and their families. Additionally, the central bank, banks, and other financial technology companies have increased awareness and education among the banked population particularly in digital banking.

The Education department said that the bill’s passage aligns with its curriculum reform and its Financial Literacy Policy in DepEd Order No. 22 s. 2021, which makes the initiative strategic and prompt as financial literacy is already integrated into the K-to-12 curriculums, not just in senior high school.

Through this policy, learners should be taught the essential concepts of financial literacy to help them handle their finances. As early as it could be, they should be introduced to the difference between wants and needs, the value of money, and how it is used.

These are stepping stones for individuals with essential financial skills which will be a solid foundation for becoming responsible financial decision makers.

The Education department also cautioned of the challenges it could bring when the House bill is enacted into law. Financial concepts, it said, must be taught effectively and consistently.

“The Department considers capacity building among its teaching force as one of its challenges and the development of instructional resources is seen to be a major challenge,” it said.

Despite its potential benefits, the House bill’s effective implementation may face common hurdles such as challenges in its initial deployment, interagency collaboration, and monitoring and impact evaluation.

“Addressing these challenges will require collaboration between DepEd, the academe, teachers, and other stakeholders to ensure the successful implementation of these initiatives,” the central bank said in an e-mail.

Careful planning is needed to implement and resource the curriculum effectively, ensure teacher competency, and counter external misinformation, Mr. Roces said.

The central bank said that the emergence of social media influencers discussing financial management and providing advice is a positive development.

However, it should be considered that there are disparities in the use of technology based on socioeconomic backgrounds, highlighting unequal digital learning opportunities.

Therefore, it is crucial to recognize that technology alone can have negative consequences if not carefully considered. It is essential to use social media as a platform to communicate information that is genuinely beneficial for everyone.

“Content creators are embracing the responsibility of promoting financial literacy and recognizing the escalating need for such knowledge in present-day society,” BSP said.

According to studies, social media is not only used for communication but also for looking for and sharing financial knowledge, BSP further explained.

The trend is further amplified by the emergence of social media influencers, who are driven by the competitive landscape. To engage more “netizens,” they need to generate various catchy but relevant content for their respective platforms.

So, the credibility may already be questionable for one.

Amid the proliferation of financial advice online, it is essential to critically assess content creators’ ability and trustworthiness before relying on their advice, the BSP warned.

For Mr. Roces, social media provides convenience, diverse content, and interactive learning, limitations exist but warned that misinformation may come along with it.

It is crucial for consumers to critically assess information and use social media as a starting point and not as a definitive source.

Marga Sayo, a financial consultant, said social media is one of the most effective mediums to deliver information to the public but one of its risks is the accuracy of the information being delivered.

She pointed out that fact-checking and media literacy is also something that a lot of Filipinos lack.

“With the number of investments and scams becoming more public knowledge, Filipinos are looking to experts to help them understand the difference, and social media is the most accessible way to reach people who can discuss topics like this.”

Mr. Roces said that banks can be the prime financial mentors in using social media. This could be done by using it to develop high-quality, targeted financial educational content, partnering with credible and somehow, reputable financial influencers, and promoting responsible financial behavior.

“Measuring success through user engagement and more importantly real-world outcomes allows for continuous improvement and evolution,” he said.

For Ms. Sayo, financial institutions must always keep up with what their customers need, including understanding the types of social media content that work best on different platforms.

Knowing what content to make and how to deliver it to its target audience is key to achieving efficiency, she explained.

For the central bank, social media platforms are powerful tools for banks to effectively communicate and educate consumers about personal financial management.

Banks can capitalize on social media to promote financial literacy by providing informative and engaging content. They can create educational content, such as videos, infographics, and articles to simplify complex financial concepts and offer practical tips for handling personal finances.

The BSP suggested other efforts such as banks should engage with their customers through social media by organizing live Q&A sessions, webinars, and virtual workshops on financial literacy.

This interactive approach will allow consumers to ask questions, seek personalized guidance, and gain a better understanding of their financial situations.

“The level of progressiveness in these efforts will depend on the bank’s commitment and adaptability to emerging social media trends,” BSP said.

With these efforts, banks can promote financial empowerment and contribute to a financially literate society.

Learners can reach financial independence at an early age by learning about earning, saving, spending, budgeting, donating, investing, and protecting funds. In turn, this would also make them careful of their purchases and create plans accompanied by suitable financial actions.

Ms. Sayo said she listens to clients’ needs and offers multiple options rather than just advice.

She said that managing finances is a personal and independent decision, and the only way to ensure compliance is if the individual comes up with the solution on their own.

“Learning the value of money and how to manage your expenses should be taught as early as when a child is given money to spend,” Ms. Sayo said.

“The concerning issue with children not understanding the importance of money is that it can make them disconnected from reality, which in turn can lead to a sudden shock when they eventually must face financial responsibilities in the future,” she added.

For the central bank, recognizing the significance of being well-informed about managing finances, savings, and related areas is key to nurturing our financial well-being.

“Recognizing the value of financial literacy and its impact on financial health motivates individuals to engage in continuous education through diverse channels [which will help them] strive toward achieving their financial objectives,” BSP said.