Filipino adults were among the least knowledgeable about their personal finances, presenting a major constraint to equitable economic development.
Standard & Poor’s ranked 140 countries in terms of financial literacy and found that adults in Asian countries knew the least about monetary ideas, including risk diversification, inflation and compound interest.
While the survey established regional differences in knowledge between East Asia, South Asia and Southeast Asia, the percentage of financially literate adults across the continent was lower than the global average. Two-thirds of adults worldwide were financially illiterate, according to the survey.
The Philippines was one of the 30 least financially literate countries in the world, with only 25 percent of adults aware of the basics of managing their money.
The list was topped with European countries’ Denmark, Norway and Sweden. S&P said 71 percent of adults in those countries were financially literate. The bottom three were Yemen (13 percent), Albania and Afghanistan (both 14 percent).
“We are committed to creating stronger financial markets all over the world,” said Courtney Geduldig, executive vice president of public affairs at McGraw Hill Financial, parent of S&P Ratings. “We believe there are correlations between financial literacy, financial access and the strength of markets. Addressing financial literacy is a key strategy in building stronger, more accessible and sustainable markets around the globe.”
The survey results come from interviews of more than 150,000 adults in more than 140 countries who were tested on their knowledge of four basic financial concepts: Numeracy, risk diversification, inflation and compound interest (saving and debt.)
The data were collected in 2014 by Gallup as part of the Gallup World Poll and analytical support was provided by researchers at the World Bank and the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University.
Singapore is home to the highest percentage of financially literate adults (59 percent) in Asia, while only 18 percent of Cambodian and Nepalese adults were able to correctly answer the questions on basic financial concepts.
The survey also uncovered information about varying levels of consumer knowledge about financial products. In China, 63 percent of adults who own a credit card were financially illiterate. Overall, 28 percent of Chinese adults were financially competent.
Significantly, the survey found younger Asians more likely to be financially adept than older respondents. In Hong Kong, 58 percent of residents between the ages of 15 and 34 were financially literate, compared to 31 percent of residents over 55. In Taiwan, the 15-34 age group was almost twice as likely to be financially literate as the over-55 group.