Household savings in the country are improving in general, as shown by the latest data from the Bangko Sentral ng Pilipinas (BSP).
According to BSP’s Consumer Expectation Survey, the number of local households with savings grew to 31.6 percent in the last quarter of 2015 from 25.7 percent in the fourth quarter of last year.
While the number of those who save may be increasing, however, the average savings of Filipino households declined as survey respondents who said they could save up to 10 percent of their regular income decreased to 36.2 percent from 38 percent in the previous quarter. This drift may be attributed to the way Filipino allocate larger portion of income to food, household expenses and education.
Further, in another survey, BSP said fewer remittance-receiving families want to save money, as basic commodities remained the most pressing concern for families of overseas Filipino workers (OFWs).
Of the 563 households, only 38.2 percent said some part of the money from OFWs would be set aside for savings, an 11.5-percent decline from 45.4 percent in the previous survey.
The drop was the biggest since the second quarter of 2010, when the amount of savers declined from 50.4 percent to 38 percent.
While recent trends on the savings behavior of Filipinos may be seen as setbacks to the banking industry’s efforts toward financial inclusion, the BSP and the rest of the sector will remain firm to promote their goal of nationwide financial accessibility.
Rural banks, for their part, offer saving accounts for children 12 years old and below. Based on the Rural Bankers Association of the Philippines member-bank profiling, about 30 to 40 percent of rural banks offer the product intended for children to start their own savings early.
Savings platform targeting the young encourage kids to save early on and carry this behavior up to adulthood. This prepares young people for a solid financial future.
The BSP also learned that school children in the public schools have big cash allowances or “baon.” These kids are the focus of financial literacy programs that aim to teach children to save instead of spending money to unnecessary expenditures.
Meanwhile, the association’s technical arm, the Rural Bankers Research and Development Inc., is set to launch its financial literacy program that aims to reach high school students, young adults and young professionals. The program is in compliance with the central bank’s consumer protection framework.
BSP-Supervised Financial Institutions, which include rural banks, are guided by the central bank’s framework to come up with tools that shall ensure that customers are able to make an informed judgment of different products and services.