J. Albert Gamboa l August 30, 2022 l Manila Bulletin
SINGAPORE – This city-state of 5.8 million people has the highest financial literacy rate in Southeast Asia based on the 2019 Finder study titled “Unlocking Financial Health in Asia: Creating a Financial Health Index.”
The study was conducted by Australian fintech company Finder ROW Pty. Ltd. to gauge the financial wellness of Asian economies based on three major components: financial literacy, financial inclusion, and financial security.
Singaporeans topped the Asia Pacific region in terms of financial health. They ranked highest across the board with scores of 78% for financial literacy, 60% for financial security, and 51% for financial inclusion – thus earning a financial health index score of 68%.
Saving is a top priority for Singaporeans, with almost 80% of survey participants saving their money in a bank account. According to the study, their major motivators to save are retirement, financial independence, and emergencies.
Compared to respondents from Indonesia, Thailand, and Hong Kong, Singaporeans ranked as more self-reliant due to a lack of social support in case of income loss. Thais and Indonesians have a stronger financial cushion to support them, whereas Singaporeans expect to rely only on themselves.
This explains why 55% of Singaporeans prioritize savings and emergency funds for which they can live off for six months or more in case of income loss, vis-à-vis 44% of Thais and 37% of Indonesians.
Back home, when Finance Secretary Benjamin Diokno was still the Bangko Sentral ng Pilipinas (BSP) Governor last year, he cited a 2015 World Bank survey on the financial security of adults in the ASEAN region. Survey findings showed that Filipinos lagged behind their Southeast Asian neighbors with a financial literacy rate of 25% compared to 59% for Singaporeans, 52% for Burmese, and 36% for Malaysians, among others.
Diokno said Filipino respondents scored low on inflation, interest rate computation, and simple division. They were able to correctly answer only three out of the seven financial literacy questions. Such dismal results were mirrored in related BSP surveys showing five out of 10 adult Filipinos still keeping their savings at home and taking out loans from informal money lenders.
“One in every 100 Filipinos has been victimized by investment scammers, amounting to a total loss of over P25 billion. These experiences tell us that there is still a long way to go, with many Filipinos delaying saving, mismanaging credit, bypassing legitimate investment opportunities, or falling victim to investment scams,” he lamented.
Now that digital transactions have increased exponentially as an offshoot of the COVID-19 pandemic, Diokno highlighted the need to further boost Filipinos’ financial literacy. He encouraged the private sector to elevate the level of financial education among Filipino students and adults in collaboration with the government.
By way of response, the Financial Executives Institute of the Philippines (FINEX) is partnering with a Filipino-owned thrift banking company, Citystate Savings Bank (CSBank), to establish a financial literacy program designed for the C, D, and E socio-economic demographics. CSBank will be the program’s presenter while FINEX shall provide the content coming from materials developed by its various committees. The program will have multiple platforms with resource persons using the vernacular to be able to reach out to the masses.
It is worthy to note that CSBank started in 1997 as a partnership between the Manila-based Fortune Insurance Group and the Citystate Management Group Holdings Pte. Ltd. of Singapore. This explains the thrift bank’s roots and its use of the Singaporean merlion as part of its logo.
CSBank is celebrating its 25th anniversary this year, when it plans to synergize digital and branch transformation in order to provide easier access and enhance customer experience. Its collaborative efforts with FINEX in advocating for financial inclusion would synchronize with its mandate to enable Filipino entrepreneurs, consumers, and households to achieve financial health.
*** J. Albert Gamboa is a Life Member of the Financial Executives Institute of the Philippines (FINEX). He is the Chairman of the FINEX Media Affairs Committee and the Editor-in-Chief of FINEX Digest. The opinion expressed herein does not necessarily reflect the views of these institutions and the Manila Bulletin. #FinexPhils www.finex.org.ph