MANILA, Philippines – Six out of 10 Filipinos with either a bank account or credit card consider themselves better off than their parents and are secure in their current jobs, reflecting a generally upbeat view of their financial future, according to the latest annual financial intelligence quotient study by American banking giant Citigroup.
The results of the latest Citi Financial Quotient (Fin-Q) Survey released by Citibank Philippines on Friday showed, however, that Filipino consumers’ overall financial quotient or well-being still needs to improve from 48.9 versus to the maximum score of 100. The latest score, which was based on a 2010 survey, showed a slight dip from the score of 49 in 2009 but was much better than 46.6 in 2008 and 47.8 in 2007, when the survey was launched.
The Citi Fin-Q for the Asia-Pacific region based on the latest survey was 54.6, up from 52.3 and 50 in the two preceding years, respectively.
Citi carried out this latest survey through global research firm Big Picture Research (formerly CXC Research). The latest leg surveyed 5,500 people across 11 countries, including the Philippines. In each of the participating countries, including Australia, China, Hong Kong, India, Indonesia, South Korea, Malaysia, Singapore, Taiwan and Thailand, 500 interviews were conducted. All respondents were over 18 years of age with either a bank account or a major credit card.
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 40 questions and covered a range of topics closely related to financial decision-making and smart financial habits.
Based on the survey, 65 percent believed they were in better financial footing than their parents and this sentiment was significantly stronger among those earning P700,000 of more annually. At the same time, 62 percent claimed to be secure in their jobs.
The bank thus noted that the latest results reflected Filipinos’ “very positive sentiments on their quality of life, financial future and retirement savings.”
More than 71 percent of those surveyed said they were “very satisfied” and “satisfied” about their overall quality of life, a double-digit increase from the previous year’s results. Optimism about one’s financial future also improved to 82 percent. On retirement savings, 56 percent said they knew how much they would need and had some savings set aside.
According to the survey, Filipinos’ positive outlook could be credited to a better understanding of money management. Of total respondents, 57 percent felt they had a “good” or “very good” understanding of money management and personal finances.
With better access to financial education, Citibank said Filipinos were able to manage their current finances and have become even more conscious about saving for the future. This is evident even in light of the Filipinos’ top three financial concerns: building savings back up after the global financial crisis, meeting monthly expenses, and doing a better job of saving for retirement, the bank said.
“The earlier consumers understand the importance of planning their financial future, the closer they can get to reaching their financial goals. At Citi, we have been reaching out to a wide variety of audiences, not just to our clients, to promote financial literacy,” Citi country officer Sanjiv Vohra said.
“We engage them in an array of discussions from making a budget and sticking to it, to understanding the many investment options available to setting up retirement funds now and not later,” Vohra added.
Vohra also pointed out that based on this research, Filipinos were becoming “more determined to take charge of their money and are responsible users of credit.”
The survey showed that 69 percent of Filipinos had said their credit card was playing an important role in helping them manage their finances while 48 percent indicated that they were paying off their full outstanding credit card balance every month.
On the other hand, 41 percent of Filipinos believe they have enough insurance to protect them and their families and 40 percent are confident they have built up enough savings that would last them three months or more. On average, Filipinos reported having nine weeks of savings in reserve.
The benchmark for a comfortable buffer in case of a sudden sickness or loss of job is to maintain liquid savings equal to three to six months worth of current earnings.
“Across all metrics, we saw an improvement in behavior and attitude toward financial planning, products and services,” Vohra said. “We will continue to do our part in promoting financial literacy, working with the right partners around the country to engage more Filipinos across all walks of life.”