Ideas & Opportunities

There is a saying that goes, "a penny saved is a penny earned."  Knowing how to save and handle your money is a life skill often overlooked in schools. The Bangko Sentral ng Pilipinas released results of the first Consumer Finance Survey (CFS) in the country that gives a snapshot of how Filipino households manage their hard-earned money.

The CFS generates data on the financial conditions of households, including what they own (financial and non-financial assets) as well as from whom and how much they borrow (sources of credit and level of indebtedness). It also generates data on the income, spending and insurance coverage of households. The survey tallies the answer of 10,520 households with 36.8 percent from the NCR and 63.2 percent from Regions 1, 7, and 11.

Appliances

The three most common assets held by households were home appliances (87.1 percent of all households), their own residence (68.8 percent) and retirement insurance (42.7 percent).  A smaller percentage of households owned motor vehicles (24.3 percent), deposit accounts (21.5 percent), other real property apart from respondent’s residence such as land, house and lot, and farm (16.2 percent) and precious objects (14.9 percent).  Only a very small percentage of households owned securities and investment accounts such as stocks, bonds, mutual funds and unit investment trust funds (0.4 percent).

Bank accounts

The  survey found that majority or eight in ten households did not have a deposit account. Among those with no deposit accounts, the main reason cited by 92.8 percent of households for the absence of a deposit account was that they did not have enough money for bank deposits. Other reasons mentioned by the remaining 7.2 percent of households were: do not need a bank/cash account (1.7 percent), cannot manage an account  (1.5 percent), minimum balance is too high  (1.2 percent), do not like to deal with banks/financial institutions (1 percent), and others not specified (1.8 percent).

Housing

 When it comes to homes, Filipinos are big on housing with many considering their home as their main asset. About 68.8 percent of households were homeowners (38 percent own/co-own their house and lot  and 30.8 percent own/co-own their house only). The rest (31.2 percent) were broken down as follows: renting (13 percent), neither owned nor rented their housing unit (18 percent), and did not respond (0.2 percent). This indicated that a significant number of families lived with relatives or were part of extended families.

Housing is either acquired through cash payment or inheritance and a small percentage through borrowings.

Most households that owned their house or house and lot acquired the property through cash payment  and as an inheritance or gift.   

Loans

When it comes to loans, money lenders are the primary source of loans for other real property acquisitions. Money lenders were the most popular providers of other real property loans. Other major sources of loans were the Pag-IBIG/HDMF,  NHA and rural/cooperative banks.

Deposits

The most popular type of depository institution for Filipinos were commercial banks  at 77.3 percent. The remaining 22.7 percent were: rural/cooperative banks (8 percent), savings/thrift banks (5.3 percent), multipurpose/credit cooperatives (4.9 percent), microfinance banks (2.2 percent), savings and loan associations (1.3 percent), paluwagan (0.5 percent) and others (0.5 percent).

 Not all deposit accounts were interest-bearing though. Only 6 in 10 households had interest-paying deposit accounts. This indicated that a significant number of deposit accounts had an average daily balance below the required amount to earn interest or had earned a negligible amount of interest.

Overall, the survey found that there is a pressing need for an inclusive financial system that reaches to those who are otherwise "unbanked." Second, the BSP must continue to educate Filipino households on the advantages of saving in banks and investing in financial instruments.

To read the full report, click here.