Filipinos are regarded as one of the highly emotional people in the world. We strongly value relationships, and I would say, we are also a friendly people. Nonetheless, in terms of perspective toward money, our attitude needs to change especially because our economy is consistently improving and we earn higher locally than did previous generations. This is made evident in the Philippine Economic Update of the World Bank in April 2016.
One of the notable Filipino attitudes toward money is that we simply don’t plan our personal finances. It is also rare that you will meet people who have their own retirement plan. Most of us spend our hard earned money spontaneously. This is the reason why most of us don’t have savings or life or non-life insurance. In fact, our country’s penetration rate currently stands at 1.7 percent, below the average 3 percent in the Asean region when it comes to life insurance. This is because many see insurance as a luxury rather than a necessity, according to Mylene Lopa, the chief marketing officer of Sun Life Financial Philippines.
Another notable Filipino attitude is our inability to say ‘no.’ When someone borrows money from us, we find it hard to refuse because we don’t want to offend that person. If we continue to live by this culture, we just don’t help our country to be more productive as we tolerate others, especially those who don’t have discipline in money. Let me ask you personally: how many of the people borrowed money from you and paid you back? I am not saying that you do not have to help others financially but we have to learn to weigh things and say no if necessary. In crucial moments, we still have to be there for our family, like contributing to hospital bills or educational expenses, which may be too expensive to them.
I am pretty sure most of you have gone to fiesta celebrations and other extravagant events. Most of the households in such communities try to accommodate every guest, to the point of spending money beyond their means, which in turn puts them in debt. In most cases, they feel it’s better to fall into debt than miss hosting an extravagant celebration or be embarrassed for failing to be a generous host. This is because we find it unfair to ourselves if we don’t do so because these celebrations are part of our culture. From my own perspective, if we want to be financially smarter, we need to change this mentality and be more rational.
We have to constantly improve ourselves in terms of financial management, especially now that the economy is growing and people have more disposable income to spend. The money generated by the Philippine labor force should be managed wisely so that we can optimize the value of our earnings and put our resources in the right places.
Luis Tan Jr. is the marketing manager of MoneyMax.ph, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products.