9 out of 10 Filipinos short of cash in past year, says poll
MANILA, Philippines—Nine of 10 Filipino adults experienced being short of funds in the last 12 months, due mainly to rising basic living expenses such as food and shelter and the increasing cost of their children’s education, according to a survey conducted by Social Weather Stations (SWS) in partnership with insurance firm Sun Life of Canada (Philippines) Inc.
When asked to identify the major expenses that led to their financial shortage in the past 12 months, 74 percent cited household expenses, such as rent, utility bills and food, while 41 percent cited school expenses for their children.
Twenty-five percent pointed to expenses for medical treatment, and another 25 percent encountered difficulties due to debt servicing or loan payments.
Seven of 10 Filipinos also noted the rising prices of commodity prices as the culprit behind their financial woes, while two of five respondents blamed their reduced earnings. Three out of 10 blamed unexpected expenses.
The survey results presented Thursday also revealed that financial difficulties were felt not just by the lower-income segments but also by the upper-income classes, suggesting the lack of financial planning across the population.
The survey was conducted with the First Quarter 2014 Social Weather Survey of SWS, which was based on face-to-face interviews of 1,200 adults nationwide from March 27 to March 30 this year. It is part of Sun Life’s annual personal finance research called Study of Lifestyles, Attitudes and Relationships (Solar), which analyzes how Filipinos handle money.
Based on the 2014 Solar survey, one of five Filipinos said that what he or she earned was not enough to cover expenses, said Sun Life Financial Philippines president Riza Mantaring.
Based on the latest Solar results, 39 percent of Filipino adults said they were trying to save regularly but only 32 percent of respondents actually stuck to the habit.
On the other hand, 10 percent saw no need to save at all since their income was “not enough anyway” while 5 percent would save up only for things they wanted to buy.
Anticipate inflation
“Money is enslaving Juan (a name typically used to represent the common Filipino) in a cycle of shortage, worry and financial dependency,” Sun Life chief marketing officer Mylene Lopa said at a briefing on Thursday.
“The numbers show that most Filipinos experience a financial shortage, or to use a common term we have for such a state, ‘kinakapos.’ The price increase and unexpected expenses definitely have an effect on finances, but these can be countered by proper financial planning,” Lopa said.
“Inflation occurs every year and is something that we can anticipate, so we should prepare ahead of time as much as we can. This way, the impact is softened and is easier to handle, as compared to seeking a solution when the problem is already there.”
Tightening belts
When asked about the steps they had taken or intended to take to address financial shortage, seven of 10 respondents said they would tighten their belts or reduce expenses.
“Just as the age-old saying goes, ’pag maiksi ang kumot, matutong mamaluktot (which literally means, when the blanket is too short, learn to curl up under it),” Mantaring said. “But why insist on making a small blanket work when you can find a bigger blanket, so to speak,” Mantaring said.
While most would cut costs, the same survey showed two in five Filipino adults said they intended to look for—or have found—additional sources of income.
Others addressed or intended to address their financial woes by borrowing from relatives, friends/neighbors or money lenders, or even selling or mortgaging properties.
On the brighter side, Lopa said one of two Filipinos said he or she was willing to learn more about managing finances.
“It’s time to change money habits so we can break free from the bondage of financial shortage, debt, worry and the cycle of financial dependency,” Lopa added.
RELATED STORIES
‘Making money is not in the genes, but in the circumstances’
