Filipino consumers have improved their financial quotient (Fin-Q), or financial well-being, as more and more citizens now understand the value of budgeting, retirement planning and saving, a new Citibank research showed.
Nine out of 10 Filipino adults with access to banking services—or those with a bank account or a major credit card—said they make a budget on a monthly basis and most of them (65 percent) know the importance of sticking to their budget.
As they prepare for retirement, 63 percent said they were on track with their retirement savings or had already started to set aside some savings for it.
Citi—which has been running an online poll since 2007 to estimate the financial well-being of consumers across the region—reported Monday that for the second straight year, Filipinos’ overall Fin-Q score surpassed the 50-point mark and scored a record high of 53 out of a possible 100 points.
Although rising from a relatively low base, this record score for the Philippines is well within the 53.2 Fin-Q average across Asia-Pacific as indicated by the study. It also came up from Filipinos’ 52.6-point score in the previous survey.
Before the turnaround two years ago, Filipinos’ Fin-Q level always fell short of the 50-point mark. When Citi launched the annual Fin-Q survey in 2007, for instance, Filipinos scored 47.8 points, which dipped to 46.6 points in 2008 before inching up to 49 in 2009. The last time the country’s Fin-Q score was below 50 was in 2010 at 48.9 points.
The improved score in the last two years was driven by increased awareness among respondents on the importance of managing their personal finances, owning financial products such as investments and insurance, and having a general optimism on their financial future, Citi said in a statement.
The latest figures suggested that Filipinos were now more conscious of their budget and seemed to be on the right track in preparing for their future. “In fact, it was a record year in terms of their confidence in their insurance coverage, with nearly eight out of 10 saying they owned insurance products or enjoyed income protection,” the bank said.
In the latest survey, respondents were scored on 11 different questions closely related to financial well-being for a maximum possible score of 100. The questionnaire consisted of over 80 questions and covered a range of topics related to making smart financial decisions and having good financial habits. All respondents were over 18 years of age.
“Citi is always on the lookout for opportunities to reach out to a wide range of audiences and go beyond our client base to promote financial literacy. When consumers are engaged in discussions on saving, budgeting and investing, it raises awareness on the importance of being able to make smart financial decisions for their future,” Citi country officer Sanjiv Vohra said.
In December, Citi hosted the 2012 Citi-FT Financial Education Summit in Manila which drew some 300 delegates from over 30 countries to address the urgent need to bridge the financial capability gap in Asia.
Citi said the financial literacy efforts seemed to be paying off. According to the latest survey, building savings topped the financial concerns of Filipinos. It was also found that six out of 10 said they knew a fair bit or knew exactly their current net worth.
The survey was conducted through research firm Big Picture Qual and Quant Research in late 2012 and the results were released this year. The survey covered 3,500 online respondents across seven countries, including the Philippines. Five hundred interviews were conducted in each of the participating countries that included Australia, India, Indonesia, Korea, Singapore and Taiwan.
Optimism was also at a high across the region with 67 percent saying they were somewhat or were very optimistic about their financial future.
“Apart from the encouraging results of this latest survey, we are also seeing how Filipinos are taking a more active role in managing their finances and planning their future. Citi is proud to take part in this initiative and we hope to continue the conversation with consumers through more financial literacy programs this year,” said Vohra.
Originally posted: 3:59 pm | Monday, February 4th, 2013