MANILA, Philippines -- Eight out of ten working, middle class Filipinos believe they face a bleak retirement, and more than half expect to be supported by their children in their old age, results of a Citibank survey showed.
The Philippines is one of 11 countries where Citibank conducted a survey called Citi Fin-Q to measure financial intelligence among consumers. The Philippines is the third country to come out with the survey results after Indonesia and Australia. The rest of the results will be released in March.
Citibank interviewed 400 respondents living in the Philippines who either had a bank account or a credit card. Respondents earned P30,000 per month on the average and two-thirds of them were below 40 years old.
They were asked to answer questions on their outlook for their financial future, their approaches to budgeting and saving and whether they have a formal financial plan, among others.
The survey revealed that only 36 percent of working, middle class Filipinos save regularly every month while 51 percent “save when they can.” Nine out of 10 attempt to follow a budget, but only 33 percent stick to it.
“Based on the Fin-Q results, only one out of 10 Filipinos is consciously saving up for retirement. The rest have some savings but don't know if it will be enough, others have no idea at all on how much they need or have not started planning," said Agustin Davalos, retail bank director of Citibank Phils.
Respondents had on the average only nine weeks worth of savings they could live on in case they lost their jobs or fell ill. This was much lower compared with Indonesia’s 11 weeks.
“Nearly seven out of 10 own insurance but only half of this number feel that the coverage is enough to protect them and their families," Davalos said.
However, figures from the survey showed that Filipinos believe in the value of saving for the future. On a country-wide basis, Filipinos got a score of 47.8.
“While the Fin-Q score may be disappointing, the good news is that more than half of the surveyed population believe on the importance of saving. The problem lies in having the discipline to do so, which could be due to lack of resources or financial know-how," said Davalos.
The survey results apply only to middle class Filipinos, and not to half of the country’s population living below the poverty line. But while the Philippine middle class is a small segment of the entire population of 84 million, Davalos believes that focusing on helping educate the middle class may help lift more Filipinos from poverty.
“As you help the middle class by providing education, health services, more jobs etc., you also lift up those below,” Davalos said.
Both the private sector and the government have been increasing efforts to improve financial literacy among Filipinos.
The Bangko Sentral ng Pilipinas and the Department of Education, Culture and Sports have signed agreements to teach financial literacy in public high schools.
Private corporations have lately been including financial literacy campaigns among their corporate social responsibility programs. Citibank, for instance, has a bi-lingual “Use Your Credit Wisely” website, publications like “Make More Money” and personal finance campaigns published in newspapers and online publications like INQUIRER.net, or aired on television and radio.
With eight million OFWs and an estimated P14.3 billion in remittances in 2007, economists have said that overseas Filipino workers are the emerging middle class in the country. Efforts to educate OFWs on financial planning are expected to shift more private funds into savings and investments away from consumption.
Other survey results:
• 64 percent of respondents are satisfied with their life
• 77 percent are optimistic about their financial future
• Only 33 percent stick to a monthly budget while 58 percent have a budget but don’t stick to it
• Only 36 percent save monthly, while 51 percent save when they can
• 40 percent pay their credit card balances in full monthly, while 38 percent pay “more than the minimum”
• 22 percent pay only the minimum amount due in their credit card statements
• Only 24 percent own their own homes; 18 percent pay a mortgage, 8.0 percent live rent-free, while 27 percent stay rent-free at their parent’s home
• 20 percent are paying rent
• 32 percent feel they have enough insurance, while 36 percent have life insurance only, and 32 percent have no insurance
• 43 percent think they know exactly what to do if they had money to invest, 53 percent think they have a “good idea” on where to invest, while 5.0 percent think they have no idea how to invest
• only 13 percent know that they need to retire well; 42 percent are not sure how much they need but have started saving; 17 percent have no idea how much they need; while 28 percent have not started planning at all
• 84 percent have no formal financial plan
• 96 percent don’t have a fomal will
Related Sites:
Citibank
MoneySmarts
