Financial awakening in the Philippines
The Philippines has indeed experienced continuous growth since the start of the millennium
WHILE only a small segment of Filipinos are serious and dedicated about planning their finances, there is a growing consciousness for the need to do so. After all, there is the reality of dying too young or living too long and in between are financial obligations and responsibilities we simply cannot ignore, let alone escape from.
This realization, in effect, is a financial enlightenment. The Philippines is experiencing its own financial renaissance.
The drive for financial literacy has never been more prevalent than today. Wealth-management courses are being offered to educate the public on the basics of financial planning and professional courses are also conducted for those who are willing to pursue this career.
Publications and books are fast becoming best-sellers while the Internet boasts of blogs and forums for professionals to impart their knowledge to those ready to learn and earn.
Financial institutions have been scrambling to develop new investment instruments that will take advantage of these opportunities. There has been an influx of innovations in the market and each new one that comes out claims to be the first of its kind. The tug-of-war for new clients and their money is becoming more competitive.
Financial gurus like Robert Kiyosaki and Warren Buffett received a following. The former has various organizations promulgating his teachings of getting out of the rat race while the latter has people dedicated to studying his investment approach and even called themselves Buffettologists.
All these breakthroughs in the financial industry were to address the massive growth in the wealth of the Filipinos and to answer the challenge of growing it even further. The phenomenon perhaps has never been more evident than our taipan compatriots steadily climbing up the chart of Forbes’s wealthiest people.
But what could have triggered this?
The Philippines has indeed experienced continuous growth since the start of the millennium. Economic indicators such as the gross domestic product, foreign reserves and remittances reached historic highs and these have well been advertised and bannered.
While that wealth has yet to trickle down to the least privileged, two segments are enjoying the new-found prosperity. They are the overseas Filipino workers (OFWs) and employees of business-process outsourcing (BPOs).
The salaries of OFWs can easily reach hundreds of thousands of pesos a month and this money, fortunately for us, finds its way back to Philippine soil. For the families, this means buying things they previously cannot afford, providing comfort and pleasure all too easily.
But as the adage goes, “Easy come, easy go” holds true and to the horror of some, their savings prove never better than before they left the country. The money that could provide future comforts was spent instead on present luxuries that leave no value at all.
Learning from these mistakes, the next generation of OFWs has become financially conscious lest they follow their predecessors’ footsteps, a nightmare they wouldn’t want to slip into. Whereas before, expenses take the first chunk out of the remittance; now, it is the savings.
Some even took a more proactive approach, attending financial seminars whenever they can to learn where to invest their hard-earned money and educating their fellow OFWs about its importance and thus, starting a chain of financially savvy individuals.
The BPO employees may not be earning as much as OFWs do, but their income is nothing to sneeze at. A fresh graduate can fetch a decent P20,000 a month and with no responsibilities binding him, a big chunk of that salary can be set aside for investing.
At the other end of the spectrum, there are those who succumb to the cultural pressure of working in the BPOs and the realization of the importance of debt management triggers an awakening.
Additionally, the aftermath of the Asian financial crisis dealt a serious blow on the interest on bank deposits and with rising inflation (although somehow has tapered off), it prompted us to look for higher-yielding instruments.
Money previously locked in bank vaults make their way to the capital markets and potentially earn more but with the corresponding risks. With headline stories about stock traders making a killing, there is the reality of money growing exponentially and we just have to join the bandwagon.
Although our savings rate collectively is still low compared to other Asian nations, it has increased over the years. Formal financial planning is still in its infancy, but has more than enough room and resources to grow. Young professionals have become more conscious about saving and investing. On many occasions, agents no longer need to hard-sell just to get them to buy, which they will if they find value in it and not because the agents say so.
This enlightenment can only work wonders for our country. New breeds of multi-millionaires have benefited from riding on this trend and more are soon to join. So should you.
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Kenrick Chua is a Registered Financial Planner of RFP Philippines. He is a Financial Adviser and holds the qualification Certified Investment Consultant. He is also regular host of Chinoy TV.
Source: http://businessmirror.com.ph/index.php/en/business/banking-finance/17839-financial-awakening-in-the-philippines
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