Reflect

O ne's level of financial literacy affects one's quality of life significantly. It determines o ne’s ability to provide basic needs, attitude toward money and investment, as well as one’s contribution to the community. Financial literacy enables people to understand and apply knowledge and skills to achieve a lifestyle that is financially balanced, sustainable, ethical, and responsible. Increased personal financial literacy affects one's financial behavior. These changes in behavior pay dividends to society as well. People who work, spend, save, borrow, invest, and manage risk wisely are less likely to require a government rescue. Financial literacy does not totally eliminate the need for a social safety net because even the most prudent individual can encounter financial difficulties. But taking responsibility for one’s financial life cultivates proper decision-making skills and discipline. Most of the responsibility for managing financial matters rests with the individual. That responsibility is easier for adults to bear when they have learned the basics of personal finance in their youth.

Financial Literacy in the Philippines

In his article “State of Financial Education in the Philippines," Go (2017) indicated several findings of researches with regards to the state of financial literacy in the country including the following: • World Bank study in 2014 estimated 20 million Filipinos saved money but only half had bank accounts. • Asian Development Bank (ADB) study in 2015 revealed that PH does not have a national strategy for financial education and literacy. • In 2016, Bangko Sentral ng Pilipinas (BSP) released the national strategy for financial inclusion, stating that while institutions strive to broaden financial services, financial literacy should also complement such initiatives.

• As per Standard & Poor's (S&P) Ratings services survey last year, only 25% of Filipinos are financially literate. This means that about 75 million Filipinos have no idea about inflation, risk diversification, insurance, compound interest, and bank savings. • Ten years after discovery of the stock market, still less than one percent of PH population is invested in it. • More than 80 percent of the working middle class have no formal financial plan.

Because of these findings, public and private sectors alike have recognized the need to strengthen financial education in the country. Last November 27-28, 2018, more than 1,000 leaders, decision-makers, influences, and representatives from public and private institutions, civic society, and the academe gathered for the first ever Financial Education Stakeholders Expo organized by BSP. The Expo is designed to build an organized network of players that share the vision of a financially literate citizenry and cohesively implement a variety of initiatives to achieve this vision. This is in line with the BSP advocacy for financial education and supports the BSP mandates of maintaining price stability, financial stability, and efficient payments system. It is the BSP’s conviction that a financially educated Filipino is an empowered Filipino who is able to make wise financial decisions that positively impact personal financial circumstances, and, consequently, contribute to inclusive and sustained economic development.

The Expo supports Republic Act No. 10922 which designates second week of November as Economic and Financial Literacy Week. It is also aligned with the objectives of the Philippine National Strategy for Financial Inclusion, particularly the pillar on Financial Education and Consumer Protection.

Developing Personal Financial Literacy

O ne’s attitude about money is heavily influenced by the parents’ attitude and behavior about money. The attitudes you formed early in life probably