Photo courtesy of Insular Life
MANILA — Senator Win Gatchalian wants more Filipinos to become financially adept for their future by having savings and insurance accounts that they could tap into during times of emergencies and other unexpected financial difficulties.
Finding as “alarming” the results of the 2021 Financial Inclusion Survey conducted by the Bangko Sentral ng Pilipinas (BSP), Gatchalian filed proposed Senate Resolution No. 569, which seeks to address the gaps in Filipinos’ financial literacy through a Senate inquiry in aid of legislation.
“Congress should formulate policies for reforms that will help Filipinos have the right knowledge and decisions in handling money including savings, insurance, investments, and retirement preparation,” Gatchalian said.
“Based on the results of the survey, the lack of financial literacy prevents many of our countrymen from making good decisions for their future and protecting themselves in times of disaster and need,” he added.
The BSP survey showed that although more Filipinos have their own financial accounts and invest, fewer Filipinos had savings and insurance in 2021. Based on the survey, the share of adults with savings fell to 37% in 2021 from 53% in 2019, while the share of adults with insurance declined to 17% in 2021 from 23% in 2019.
Such a finding is consistent with the 4.6% year-on-year contraction of the total number of estimated insured lives by microinsurance products from 46.97 million as of the first quarter of 2021 to 44.81 million as of the first quarter of 2022 as per data from the Insurance Commission. The same survey indicated that borrowing was the main coping mechanism of Filipinos across all financial needs, followed by the use of savings and income.
“These results suggest that given their limited income and credit, many Filipinos are still delaying or depleting savings, mismanaging credit, or defaulting on their debts, bypassing legitimate investment opportunities or falling victim to investment scams or taking out ‘buy now, pay later’ loans from unregulated lending companies, often with high-interest rates.
Unfortunately, most of these affected Filipino households are also the same ones seeking government aid,” Gatchalian said.
Gatchalian also filed last year proposed legislation, Senate Bill 479, that will require teaching financial literacy in elementary, secondary, and tertiary levels, including technical-vocational institutions.