The quest for financial education

Allow me to veer away from the usual question-and-answer format of this column as I felt the need to share something that is very important to me.

I just delivered last week the opening remarks of the 1st Financial Advisors Congress, which was organized by the Registered Financial Planner Philippines.

I must admit that it was one talk that I was really passionate to deliver in the hopes that the over 300 participants of the congress will have an even bigger passion to advocate for financial education for Filipinos.

It has been a known fact that Filipinos are lagging behind many Asian countries with regard to financial literacy. Facts and figures such as savings, insurance, investments and other data will show how far we are behind countries like Singapore, Thailand, Hong Kong and Malaysia.

Previous studies also point out that Filipinos do not prepare for retirement and are not keen on investing their money properly.

That was then, this is now.

Global financial services conglomerate Citi runs an annual survey called the “Fin-Q Survey.”  What is this survey about? According to Citi, the “financial quotient” is a measure of the financial well-being of respondents—the respondents were all over 18 years old and either owning a bank account or holding a credit card.

Previous surveys showed the Philippines below the passing mark for the region and well below some Asean members. But in 2011, the results of Citi’s Fin-Q Survey show that things have improved for the Filipinos. The survey has a ‘passing’ score of 50 and the Philippines was able to register an all-time high of 52.6—the first time we breached the 50 mark.

While 50 is hardly a hurdle we should be happy about, I am ecstatic that our numbers are indeed improving. The survey is a sampling of 500 individuals.

Sanjiv Vohra, Citi’s country officer for the Philippines, said “the survey numbers in the Philippines are indeed very encouraging. The results show that Filipinos are becoming more determined to take charge of their finances and are responsible users of credit.”

Further, Vohra also said “Filipinos are also looking at investments in the form of cash, real estate and insurance to ensure a comfortable retirement.”

Some interesting figures from the 2011 Fin-Q Survey of Citi for the Philippines:

1) Retirement savings is up by 11 percent and 42 percent of the respondents claim they save money every payday.

2) Sixty percent of respondents said they paid their credit card outstanding balances in full every month.

3) Seventy percent of the respondents said they have used the Internet or their mobile phones while 52 percent of them prefer electronic transactions over personal visits to their branch—the highest among all the countries surveyed.

4) Over 60 percent of the respondents felt they were in a better financial position in 2011 compared to 2010.

5) Eighty percent of the respondents are more optimistic about their financial standing in the future.

The average score of the region covered by Citi’s Fin-Q Survey was at 54.5 percent, a few points up from the previous year’s 53.2 percent score.

The countries covered by Citi’s 2011 Fin-Q Survey were the Philippines, Australia, India, Indonesia, Korea, Singapore, Taiwan and Thailand.

Sanjiv Vohra said that the improvement in the Filipinos’ score (and other Asia-Pacific countries) in financial quotient (or literacy) is a result of efforts to promote financial literacy.

I am ecstatic that the attention on financial education has been increasing and it is interesting to note that personal finance is getting into mainstream media and social media. ANC now airs a daily show called “On the Money” while a magazine called Moneysense has reportedly been increasing in circulation; and radio shows like 92.3 FM’s Oplan Asenso and Chink+ regularly discuss financial matters. A host of other columns and blogs have been proliferating as well as quite a number of forums and Facebook groups discussing issues of personal finance and investing.

While I am ecstatic that we are showing improvements, we must aim at a much higher rate—maybe 60-70 percent if we are to really experience sustainable prosperity. Further, a bigger challenge is to bring financial literacy to the masses and we need to do this as quickly as we can. How? We need more dedicated advocates and we need to be more passionate about championing this cause.

Are we going to see a much higher financial quotient for the Pinoy? Yes and we will get there—I pray and believe we will get there. Stewardship and education are all we need.

Catch my investments seminar titled “No Nonsense Seminar on Finance: How to Invest for the Future” this Saturday, Sept. 22, 2012, at the Legend Villas Hotel. For inquiries please send an e-mail to [email protected] or call/sms 0927-873151. You may also visit https://www.randelltiongson.com/how-to-invest-for-the-future/.

(Randell Tiongson is an advocate of life and personal finance. He is registered financial planner of RFP Philippines. To learn more about personal financial planning and how to become RFP, attend our FREE talk on financial planning on September 25, 7 p.m. E-mail [email protected] or call 480-1997. Limited slots only.)