Pinoys’ financial woes due to lack of planning, savings – survey

MANILA, Philippines - Most Filipinos are experiencing financial difficulties due to lack of planning and their inability to save for future expenses, a new survey conducted by the Social Weather Stations (SWS) and Sun Life of Canada (Philippines) Inc. showed.

The SWS survey showed that over the last 12 months, nine out of 10 Filipino adults experienced financial shortage on expenses such as household needs (74 percent), school fees (41 percent), medical bills (25 percent), and loan payments (25 percent).

The survey was conducted from March 27 to 30, 2014 using face-to-face interviews of 1,200 adults (18 years old and above) in Metro Manila, the balance of Luzon (areas within Luzon that are outside of Metro Manila), Visayas, and Mindanao.

Seven out of every 10 Filipino adults pointed to rising prices of commodities as the main reason behind the shortage they experienced in their budget, in which four in 10 said it was because they were earning less, and three in 10 cited unexpected expenses.

“The numbers show that most Filipinos experience financial shortage, or to use a common term we have for such a state, “kinakapos.” The price increase and unexpected expenses definitely have an effect on finances, but these can be countered by proper financial planning,” Sun Life marketing officer Mylene Lopa said.

Most of the respondents also blamed the rising inflation  for their inability to cope  with expenses.

“Inflation occurs every year and is something that we can anticipate, so we should prepare ahead of time as much as we can. This way, the impact is softened and is easier to handle, as compared to seeking a solution when the problem is already there,” Lopa said.

Asked about the steps they took or will take to address the financial shortage, seven in 10 Filipino adults said they controlled or will control their spending, while four in 10 Filipinos have resorted  or will resort to looking for additional sources of income.

The survey also indicated that others addressed or plan to address this problem by borrowing from relatives, friends/neighbors, or money lenders, or selling or mortgaging properties.

According to Lopa, being more mindful of their spending is a good practice. “It would also be good to have an emergency fund that they can dip into when emergencies come. This emergency fund can be in the form of savings or an insurance policy that provides protection for unforeseen events. It also helps to consult people attend seminars to learn about proper financial planning, as well as the different financial solutions that can address their various needs,” she said.

Another survey results showed about 39 percent of Filipinos try to save regularly, but only 32 percent of Filipinos actually have a saving habit; 10 percent see no need to save since their income “is not enough anyway”; and five percent would save up only for things they want to buy.

“On a broader scale, according to an earlier study we conducted also with SWS, this lack of financial planning has led nine of 10 Filipinos in the A to E economic classes to experience some kind of financial shortage in the last 12 months, whether it be for basic living expenses, their children’s education, or medical and health related expenses,” she said.

“This is where we (Sun Life) come in,” Lopa said. “We can provide them with the knowledge and tools they need about saving, investing and insuring themselves and their loved ones.”