The Philippines was ranked 68th globally in terms of financial literacy index, according to a study made by the Asian Development Bank (ADB).
The study on financial education in Asia indicates majority of Asian nations do not have a national strategy for financial education and literacy, or that the existing programs lag behind the rest of the world.
Citing a survey undertaken by MasterCard, the Philippines ranked 68th behind Malaysia, Thailand, Hongkong, Taiwan and Singapore.
In the Asia and Pacific region, New Zealand topped the list.
The ADB revealed in the study that the Philippines does not have a national strategy for financial education. In contrast, Indonesia introduced its national strategy in 2010, and India in 2012.
In the Philippines, only the Bangko Sentral ng Pilipinas has its public awareness campaigns on economic and financial issues. Other government agencies that limited initiatives for raising financial literacy are the Securities and Exchange Commission, National Credit Council and Insurance Commission.
The BSP has been active in developing strategies for financial education and has issued a number of circulars.
“The main focus is the economic and financial learning program to promote awareness of economic financial issues. The program targets specific audiences like schoolchildren, secondary and tertiary students, overseas Filipino workers, microfinance clients, and others,” the ADB said.
The BSP also has a Credit Surety Program, a trust fund financed by contributions of a provincial government and a cooperative in the same province to encourage financial institutions to lend to micro, small, and medium-sized enterprises (MSMEs) in the province using the surety cover as a collateral substitute.
The Consumer Affairs Group of the BSP has been in charge of programs for consumer protection, and the Monetary Board of the BSP approved adoption of the Financial Consumer Protection (FCP) Framework to institutionalize consumer protection as an integral component of banking supervision in the country.
In addition, the National Credit Council and the Insurance Commission oversee financial education covering microinsurance in collaboration with the National Anti-Poverty Commission.
The ADB said the starting point for financial education is to have a national strategy.
“But so far in Asia, only India, Indonesia, and Japan have implemented such strategies. Indonesia and the Philippines are relatively strong compared to other countries,” the study pointed out.
Without a national strategy for financial education and literacy, the present growth trend of Asia or the individual nations can not be sustained.
Asia generally has high savings rates compared to Latin America or other regions. Currently, most of these savings are deposited into banks and are not well allocated in various financial products.
“This presents barriers to financing by SMEs and start-up businesses, and consequently retards potential growth,” the ADB stressed.
Source: Philippine Star