4 out of 10 carry non-mortgage liabilities – survey
High levels of personal debt are overshadowing Filipinos’ increasing financial discipline, a financial services firm said.
Manulife Philippines on Monday cited results from its Manulife Investor Sentiment Index (MISI) survey, which found that Filipino investors have relatively high levels of personal debt (excluding mortgages), which in turn could jeopardize their long-term financial security despite their otherwise strong day-to-day financial discipline.
“Encouragingly . . . Filipino investors are among the best in Asia in terms of their savings and expense tracking behaviors,” the firm said.
The MISI noted that almost all investors surveyed track their expenses regularly and manage to save part of their income each month–both of which are key indicators of good financial discipline.
It also found that Filipinos are effective savers, with 46 percent of investors that have set a target saving amount starting to save early, before the age of 30.
“This may explain why an overwhelming majority of investors claim they will have sufficient savings to meet their financial needs in five years time,” Manulife said.
In addition, the survey said of those who have set a target saving amount, an overwhelming 74 percent expect to meet their goal in one to four years, which could indicate that Filipino investors are setting short term targets.
2nd only to Malaysia
“However, despite this strong record in financial management, the survey revealed relatively high levels of personal debt,” the financial firm, said.
The survey showed that four in 10 Filipino investors carry debt–the second highest proportion in the region after Malaysia.
While most have relatively small amounts of debt ranging from P5,000 to P24,999, 7 percent have debts of P500,000 or more, it noted.
“A third of respondents cited daily living expenses as the main factor contributing to their debt, which could indicate that investors’ ability to save regularly may rely on the use of credit to pay for day-to-day living expenses,” it added.
In addition, the MISI noted that while Filipinos are prudent savers, more than 80 percent regret some investment decisions, suggesting they are unable to effectively invest their savings for the long term.
Manulife’s MISI survey is designed to track investor attitudes toward financial planning across eight markets in the region, in order to better understand investors’ needs and identify areas for increased financial literacy.
It is a half-yearly, proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and issues related to personal financial planning.
The Index is calculated as a net score for each asset class. The overall index is calculated as an average of the index figures of asset classes. A positive number means a positive sentiment, zero means a neutral sentiment, and a negative number means negative sentiment.
The MISI is based on 500 online interviews in Hong Kong, China, Taiwan, Japan, Singapore, Malaysia and the Philippines, and 500 face-to-face interviews in Indonesia.
Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products.