Save, build and protect


Savings among Filipino households have reached an all-time high of 33.9 percent in the 2nd quarter of 2015, according to the BSP Consumer Expectations Survey released last June. The report further cited that the savings were intended for emergencies, education, health and hospitalization, retirement and business capital and investment.

While the report tells us that there is an increasing understanding of the importance of savings, it also tells us where the survey respondents mostly allocate savings. Clearly, there is appreciation of how savings can help them cope with emergency expenses, health, hospitalization cost and retirement.

Various financial products and services are now available in the market for consumers to improve their capability to save and build their assets. They can deposit their savings in banks to earn interests. They can put their savings in cooperatives to earn dividends. Or they can invest long-term in mutual funds, stocks, bonds and securities.

But aside from these products, insurance policy is another financial tool that can maximize a person’s savings capability. Insurance policy shall provide protection from expenses related to death of a family breadwinner, health and hospital-related costs and property damage from fire or natural calamities.

And this tool is no longer confined to the middle and upper income-earning households and individuals. Low-income individuals can now save through insurance, too.

Several rural banks across the country now offer microinsurance. These banks extend insurance to low-income sector at an average of 30 pesos per month depending on the coverage and the benefits. Application also requires minimum client information with a photo-bearing identification card or an acceptable substitute document. On some instances, a barangay certification may be acceptable.

With the introduction of microinsurance in the low income and informal sector, unexpected expenses caused by risks such as death and losses of assets will be curbed. This policy will protect and prepare them against unforeseen untoward events with minimal impact on their financial position.

Rural banks and microfinance institutions are important channels for the low-income sector to have access to microinsurance in the countryside. While microinsurance aims to protect small units of the community, it also impacts the country as a whole. With most of our farmers, fisherfolk and small merchants living in the rural areas, it is our goal to keep them from risks in order to also protect the whole agriculture industry.

Players in the financial sector may capitalize on this positive trend in the savings behavior of financial consumers to offer a holistic approach for an effective management of their access to financial products and services, that is, to save, build and protect.


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