Driven by fear, Filipinos saving more to prepare for COVID-19 risks — survey

Driven mostly by fear and insecurity, 77% of Filipino survey respondents said they plan to save more because of the coronavirus disease 2019 (COVID-19) pandemic. A majority of these (or 94% of 800 respondents) prefer low-interest bank deposits — prompting AIA Group Limited, the parent company of insurer AIA Philam Life, to say that Filipinos “could be saving smarter.”

The Save Smarter Study 2021, conducted by AIA Group Limited, showed that 53% of Filipinos increased their savings by up to 50% in 2021; and 29% have said that they list out their savings goals and put aside savings to meet them, higher than the 25% average of other markets.

According to AIA, this discipline in saving isn’t optimized as the “low bank interest environment threatens to depreciate savings with by far the most popular place to save being the bank with 91% using demand deposits and a massive 40% having no other form of savings at all.”

For Filipinos, the main motivation for saving is to manage uncertainties due to COVID-19, with 72% of respondents saying they put aside money for emergency spending; 65%, for financial security in case of misfortune; and 62%, for medical expenses

“With the valuable insights we’ve gathered on Filipinos’ views on savings during the pandemic, we have very clear indications on what our customers need,” said AIA Philam Life Chief Executive Officer Kelvin Ang in a press release. “This ensures we are able to provide them the best product options that will help them live healthier, longer, better lives.”

The pandemic has also led to a stronger interest in insurance, with three-fourths of Filipinos surveyed agreeing that insurance is needed for protection in case of unexpected incidents. Of those planning to raise spending on insurance, 80% intend to spend more on life insurance and 60% said they plan to spend more on medical and health insurance.

The AIA Future Builder plan, the latest addition to AIA Philam Life’s portfolio, addresses the concerns revealed by the study.

It comes with basic insurance protection for life, total permanent disability, and personal accidents as well as additional benefits through riders. It also allows the diversification of investments through either locally or globally managed funds.

The Save Smarter Study 2021 surveyed 7,400 insurance consumers over 25 years old across eight Asian markets including the Philippines. In the region, preparing for emergency spending emerged as the top savings goal (64%), followed by guaranteeing financial security (60%), and coverage for medical expenses (54%). — Brontë H. Lacsamana