In my recently concluded study, I determined factors that have a significant influence on a person’s decision to invest in the stock market. Using statistical analysis, I found financial literacy as the most significant factor (followed by monthly family income) in explaining the decision to invest in stocks.
Financial literacy has long been a topic of interest for many financial advocates, as well as the government. In fact, the National Economic and Development Authority (NEDA) is mandated by Republic Act No. 1922 of 2016, or “An Act Declaring the Second Week of November Every Year as Economic and Financial Literacy Week,” to convene key partners and lead in the nationwide Economic and Financial Literacy Week (EFLW) celebration.
The law also directs other agencies such as the Bangko Sentral ng Pilipinas (BSP), Department of Finance (DOF), Department of Education (DepEd), Commission on Higher Education (CHED), National Youth Commission (NYC), Philippine Information Agency (PIA), Presidential Communication Development and Strategic Planning Office (PCDSPO), Philippine Economic Society (PES) and the Department of Interior and Local Government (DILG) to hold activities in line with the celebration of the EFLW.
This is in response to the growing economy and financial system, which has become highly complex, compared with many years ago, when we only needed to know the difference between a saving and a checking account.
Now, consumers must also be able to differentiate a wide range of financial products and services (such as mutual funds, unit investment trust funds, insurance, balanced funds, fixed income and equities) and be able to shop among the best providers.
In addition, financial institutions have presented solutions to close the gap between the users and investors of funds by offering online platforms where Filipinos can invest in real time for as low as P5,000. Previously, you had to contact a stockbroker to place orders. Now available online to serve you directly are Citigroup’s COL (Citisec Online) Financial, Bank of the Philippine Islands’ BPI Trade and, recently launched, Banco De Oro’s BDO Nomura. These platforms not only allow you to invest on your own but they also teach you some strategies on making sound financial decisions. Information available includes which companies to invest in, charts, researches, historical prices, financial statements, future prospects and the latest news about companies of interest to you.
Some independent groups such as Traders Apprentice Pilipinas give guidance to investment newbies through orientation seminars on stock investing. From time to time, they post relevant information about companies whose shares have the potential to appreciate in value over time.
The Commission on Higher Education (CHED) recently issued guidelines (CMO 17, s. 2017) for the Bachelor of Science in Business Administration curriculum, giving educational institutions leeway to add subjects that may be deemed necessary. This is good news since business schools can now offer students required or elective subjects related to financial literacy.
In conclusion, in the same way that basic education helps us to develop good life-long dietary and hygiene habits, good financial education should also equip us with the right skills and the habits necessary for us to participate sensibly in the financial markets. With all the support given to us by different sectors of society, now is the time to invest.
Dr. Azenith Hababag is an assistant professorial lecturer in the Management and Organization Department of De La Salle University. She teaches corporate social responsibility and good governance. Email: firstname.lastname@example.org