Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr., Department of Education (DepEd) Secretary Leonor-Magtolis Briones, and BDO Foundation (BDOF) President Mario Deriquito will sign a Memorandum of Agreement (MOA) on 28 May 2018 to advance financial education in the Philippines. The MOA covers the development of videos as tools to teach basic financial literacy concepts like saving and money management in public schools. These videos, designed for learners as well as educators, are accompanied by teaching guides to further equip and support the DepEd in mainstreaming financial education in the K12 curriculum. These learning tools are targeted to reach around 700,000 teachers and non-teaching personnel, and 24 million students in more than 47,000 public schools nationwide.
This partnership is forged under the National Strategy for Financial Inclusion (NSFI), particularly the pillar on Financial Education and Consumer Protection (FECP). The NSFI provides a platform for the private sector to support the government’s work in promoting the shared objective of enhancing the financial literacy of Filipinos through financial education.
Financial education is indeed an imperative, considering the country’s low financial literacy levels. A demand side survey shows that Filipino adults can correctly answer only three (3) out of seven (7) financial literacy related questions covering basic numeracy, computing compounding interest, fundamentals of inflation, and investment diversification. Only two percent (2%) of Filipino adults answered all questions correctly. The study also showed that Filipinos lack specific knowledge to make informed financial decisions. However, the same study indicated that money management habits formed in childhood stay into adulthood. Those who began saving as children display better attitudes to saving, and tend to outperform their counterpart group who did not develop the habit early in the areas of choosing financial products and services, monitoring expenses and planning for retirement.1
A growing body of literature also reveal that a financially-literate population is able to make better financial decisions, have higher levels of savings and diversified investments, and are more competent in managing debt .
These data suggest that the best way to nurture sound financial culture and behavior among future adults is to start practical financial management lessons at a young age. There is global recognition that embedding financial education in a school setting, thru a formal curriculum, is among the most efficient ways of improving financial literacy of Filipino youth. The value of saving and wise use of money is a critical life skill necessary to prepare them to become productive citizens and successful future leaders.
Governor Espenilla, Jr. noted that, “The BSP believes that a financially-learned citizenry can be more effective in productively contributing to the Philippine economy. To date, financial education remains a formidable task, one that requires coordinated multi-stakeholder action. With DepEd onboard in this partnership, the commitment of our educators, and private sector support, we can collectively influence every child who goes through the Philippine educational system to strive towards a healthy financial future.”
The BSP will remain a strong supporter of financial education initiatives, and ready to partner with like-minded public and private sector stakeholders. The BSP believes that a financially-literate citizenry able to understand, select and effectively use financial services that fit their needs can significantly benefit from participating in the financial system as depositors and investors. They can better protect themselves from fraud and harmful financial practices, and be more effective BSP partners in maintaining price stability and ensuring a strong, safe and efficient banking and payment system.
1 World Bank (2015). Enhancing Financial Capability and Inclusion in the Philippines: A Demand-Side Assessment