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Shocking facts about saving and investing for Filipino

households
We recently released an infographic called Shocking Facts! Filipino Households Saving & Investing and
it has caught fire on social networks, particularly Facebook, where it has been liked, commented on, and
shared by hundreds of Filipinos truly shocked by the stats.
Below is the press release of the BSP on their first Consumer Finance Survey, on which most of the data
in the infographic was based on.
BSP Releases Results of First Consumer Finance Survey in the Philippines
The Bangko Sentral ng Pilipinas has released the results of the first Consumer Finance Survey (CFS) in
the Philippines. The CFS generates data on the financial conditions of households, including what they
own (financial and non-financial assets) as well as from whom and how much they borrow (sources of
credit and level of indebtedness). It also generates data on the income, spending and insurance coverage
of households. The survey results also provide a breakdown of respondents residing in the National
Capital Region (NCR) and in Areas Outside the National Capital Region (AONCR).
The survey has a sample size of 10,520 households consisting of 3,872 households (36.8 percent) from
the NCR and 6,648 households (63.2 percent) in AONCR, specifically Regions 1, 7, and 11. The overall
response rate was 89.4 percent.
Reference periods for the data collected from the survey vary. For data pertaining to demographics,
assets and liabilities, and preferences and behaviors, the reference period was the date the household
was interviewed (i.e., within the period from November 2009 to January 2010), while for data on work,
income and expenditures of households, the reference period was the full year 2008. The survey
respondent is the member of the household that is most knowledgeable about the households finances.
The survey respondents were predominantly female (59.8 percent), in the working age bracket of 21-64
years old (85.7 percent), and were high school or college graduates (55.2 percent).

CFS results indicate a significant increase in the countrys labor force over the next decade
The Philippines has a young population. The age distribution of household members showed that 21.5
percent were 5-14 years old, while those who were about to retire or were close to compulsory
retirement (aged 55-64 years old) and the elderly (65 years old and over) accounted for 6.9 percent and
5.4 percent of the household members, respectively, at the time of the survey. These figures also
indicated that a significant increase in the countrys labor force could be expected over the next decade
given that a much bigger number of young people could enter the labor force every year compared to the
number of older people who leave the labor force working age group. Thus, the age dependency ratio,
currently estimated at 0.6, could further drop to 0.5, translating to about two working age household
members for every one non-working age household member.
Home appliances, own residence and retirement insurance are the most common types of assets
owned by households
The three most common assets held by households were home appliances (87.1 percent of all
households), their own residence (68.8 percent) and retirement insurance (42.7 percent). A smaller
percentage of households owned motor vehicles (24.3 percent), deposit accounts (21.5 percent), other
real property apart from respondents residence such as land, house and lot, and farm (16.2 percent) and
precious objects (14.9 percent). Only a very small percentage of households owned securities and
investment accounts such as stocks, bonds, mutual funds and unit investment trust funds (0.4 percent).
Household liabilities are in the form of consumer and real property loans
With respect to liabilities, few households had outstanding loans on their residence (3.7 percent) and
other real property (5.8 percent). A bigger percentage of households had outstanding consumer loans
such as motor vehicle loans (13.5 percent); personal, salary, all purpose loans (20.9 percent); and credit
card loans (3.9 percent).
The main sources of funds of households vary by type of loan. These included government housing
institutions and money lenders for real estate loans; in-house financing for motor vehicle and appliance
loans; banks for credit card loans; and money lenders and cooperatives for other loans.
Seven in ten households own their homes

For many households, the main asset that they hold is their home. About 68.8 percent of households
were homeowners (38 percent own/co-own their house and lot and 30.8 percent own/co-own their house
only). The rest (31.2 percent) were broken down as follows: renting (13.0 percent), neither owned nor
rented their housing unit (18.0 percent), and did not respond (0.2 percent). This indicated that a significant
number of families lived with relatives or were part of extended families.
Housing is acquired largely through cash payment or inheritance and a small percentage through
borrowings
Most households that owned their house/house and lot acquired the property through cash payment and
inheritance/gift. A small percentage of households acquired their residential property through the
Comprehensive Agrarian Reform Program (CARP). Only 6.7 percent borrowed money for their housing.
Government institutions are the primary source of housing loans
Government institutions were the most popular providers of housing loans, followed by cooperatives and
money lenders. Other sources of credit were rural/cooperative banks, commercial banks, former owner of
the property, financing institutions, savings and thrift banks and company/employer loan.
Seven in ten households pay an annual interest rate of ten percent or lower on housing loans
In terms of lending rates, majority of households (73.4 percent) paid an annual interest rate of 10 percent
and below on their housing loans while 14.1 percent were charged interest rates of 11-20 percent per
annum. The remaining households were charged with an interest rate ranging from 21 percent up to 60
percent.
One in two households with outstanding housing loans pay ahead or on schedule
Almost one-half of households with outstanding loans paid their monthly amortization either ahead of or
on schedule, while the other half were behind schedule.
One in six households owns other real property
About 16.2 percent of households owned at least one other real property aside from their residence.
Money lenders are the primary source of loans for other real property acquisitions

Money lenders were the most popular providers of other real property loans. Other major sources of loans
were the Pag-IBIG/HDMF, NHA and rural/cooperative banks.
One in every four households owns a motor vehicle
The survey showed that about a quarter (24.3 percent) of households owned at least one vehicle. Among
those households who owned vehicles, 54.9 percent owned motorcycles, followed by
cars/AUV/SUV/vans (32.2 percent of households), tricycle (19.4 percent) and other vehicles for
agriculture-related use such as motorized boats (4.1 percent), kuligligimprovised motorized vehicles
(1.9 percent), and tractors (0.8 percent).
One in seven households borrow to finance their motor vehicle purchases
About 13.5 percent of households that owned motor vehicles had outstanding loans on their vehicles.
In-house financing was the most popular mode/source of motor vehicle loans.
Majority of households own various types of appliances
Majority of households (87.1 percent) owned various types of household appliances. On average, six
different types of appliances can be found in any household. The most common appliances found in
households were: television set, electric fan, cellphone/telephone, VCD/DVD player, gas stove, and
refrigerator.
Eight in ten households are unbanked
Eight in ten households (78.5 percent) did not have a deposit account. Among those with no deposit
accounts, the main reason cited by 92.8 percent of households for the absence of a deposit account was
that they did not have enough money for bank deposits. Other reasons mentioned by the remaining 7.2
percent of households were: do not need a bank/cash account (1.7 percent), cannot manage an account
(1.5 percent), minimum balance is too high (1.2 percent), do not like to deal with banks/financial
institutions (1 percent), and others not specified (1.8 percent).
Eight in ten deposit accounts are placed in commercial banks
The most popular type of depository institution among households were commercial banks (77.3
percent). The remaining 22.7 percent were: rural/cooperative banks (8.0 percent), savings/thrift banks

(5.3 percent), multipurpose/credit cooperatives (4.9 percent), microfinance banks (2.2 percent), savings
and loan associations (1.3 percent), paluwagan (0.5 percent) and others (0.5 percent).
Only six in ten deposit accounts pay interest
Not all deposit accounts were interest-bearing. Only 6 in 10 households had interest-paying deposit
accounts. This indicated that a significant number of deposit accounts had an average daily balance
below the required amount to earn interest or had earned a negligible amount of interest.
Forty-three percent of respondents have one or more retirement plans
The survey showed that 42.7 percent of the total respondents had at least one retirement or insurance
plan from both/either the government and/or private companies. A large proportion (93.9 percent) of
respondents was covered solely by government insurance, such as SSS, Government Service Insurance
System (GSIS), Armed Forces of the Philippines Savings and Loan Association Inc. (AFPSLAI), and
others (e.g., Pag-IBIG, Public Safety Mutual Benefit Fund, and the Philippine Veterans Affairs Office); 4.5
percent by both the government insurance and private insurance companies; and 1.6 percent exclusively
by private companies. Of the total insured not currently receiving pension benefits, 36.4 percent were
paying their premiums while the remaining 63.6 percent were not.
Results of the survey showed that 44.9 percent of respondents spouses had at least one retirement or
insurance plan from both/either the government and/or private companies. Among respondents spouses,
SSS had the highest coverage among government insurers with a total of 91.9 percent, followed by the
GSIS at 9.9 percent, and provident funds and other government insurers (e.g., AFPSLAI and Pag-IBIG)
accounting for 8.7 percent of the total respondents spouses covered by insurance. Of the total insured
not currently receiving pension benefits in the employment-based insurance, 52.5 percent were currently
paying their premiums while the remaining 47.5 percent were not paying their premiums.
Three in ten household members are covered by health insurance
Only 3 in 10 household members (29 percent) were covered by health insurance. Of those covered, 93.6
percent were under Philhealth insurance, 4 percent under private health insurance and 2.4 percent under
both private health insurance and Philhealth. These results indicated that Philhealth was able to cover
less than one-third of household members and that the majority of the population has yet to be covered
by health insurance.

The most common inheritance received by households is real estate

About 21 percent of households reported receiving an inheritance. The most common inheritance
received was real estate such as land or farm (60.3 percent) and houses, condominiums and townhouses
(23.9 percent). Households also received inheritance in cash, shares of stock and other financial assets
(2 percent) as well as businesses, vehicles, and jewelries/antiques (2.1 percent).
Four percent of households have credit cards
About four percent of households had credit cards. In terms of the number of credit cards owned, majority
of households (63.6 percent) reported having only one credit card.
About four in ten (38.9 percent) credit cards monthly bills were paid in full, another 39.8 percent were
paid only the minimum amount, 4.8 percent were paid a partial amount other than the minimum, 1.2
percent were not paid at all, and 15.3 percent were unspecified.
One in five households avail themselves of other types of loans such as personal, salary, multipurpose and business loans
Aside from real estate, housing, motor vehicle, and credit card loans, about one-fifth (20.9 percent) of
households availed themselves of other types of loans such as personal, salary, multipurpose, and
business loans. The said loans were sourced mostly from money lenders, cooperatives, financing
institutions, SSS, and Pag-IBIG. These were used primarily for business start-ups and expansion,
educational expenses, debt payment, medical, and house improvement expenses.
Wages and salaries are the main sources of household income
The main sources of household income were wages and salaries (43.2 percent of total households),
businesses including self employment (40.6 percent), financial assistance from other households (19.8
percent) and financial assistance from abroad (19.6 percent).
Four in ten households own a farm or business
About 40.6 percent of households owned a farm or business. Businesses of households were mainly in
wholesale and retail trade, and agriculture, hunting, forestry and fishing.

One in five households receives financial assistance from abroad

About one-fifth of households received financial assistance from abroad in the form of cash, gift, or other
forms of transfers in 2008. The average amount received by each of these households was P48,988 a
year, while the median amount was P12,000.
Median total income of households is P108,000
The average and median total income of households in 2008 were P188,350 and P108,000, respectively.
Food and beverage consumed at home is the main household expenditure
Food and beverages consumed at home accounted for 38.5 percent of the annual household
expenditures. This was followed by rent (18.5 percent), transportation and communication (10.7 percent),
utilities (7.2 percent), food and beverage consumed outside the home (6.7 percent), education (5.5
percent), medicine and medical services (5 percent), house repairs and maintenance (2.1 percent),
clothing (1.4 percent), travel and recreation (1.5 percent), and celebration during special occasions,
household help services, and purchase of furniture and appliances at 1 percent each.
Respondents are inclined towards saving
When asked if they have surplus money, where they will put their extra money, the top two answers of
respondents were to save in banks (39.4 percent) and save cash at home (38.8 percent). This indicates
that majority of the population has the inclination to save.
Majority of respondents are not risk takers when it comes to their income and business
Majority of respondents would not risk their income to undertake risk-taking activities that could increase
their current level of income. About 7 in 10 respondents chose to stick to their current level of sure
income of P1,500 per week rather than take the risk of investing in a new product with a 50-50 chance of
either getting P4,500 (three times their current income) or suffer a loss of P1,500 (equal to their current
income).
Survey results affirm relevance of BSPs financial inclusion and financial education initiatives

Some policy implications that can be drawn from the results of the survey are: first, the BSP should
continue to work toward a more inclusive financial system that reaches to those who are otherwise
excluded or unbanked. To this end, the BSP has already made some headway in promoting and
establishing an enabling policy and regulatory environment to increase access to financial services of the
entire populace through policy and regulatory initiatives, training and capacity building, and promotion and
advocacy activities.
Second, there is a need to continue to educate Filipino households on the advantages of saving in
financial institutions and investing in various forms of financial instruments. For more than a decade, the
BSP has been conducting financial learning seminars in different provinces all over the country. In 2010, it
formulated an Economic and Financial Learning Program to integrate its various learning programs, which
are aimed at promoting general awareness and understanding of important economic and financial issues
to help the public acquire the knowledge and develop the skills needed to make well-informed decisions
and choices.
Third, there is a need to look into shadow banking transactions and related regulatory and supervisory
approaches to monitor system-wide risk exposure to particular sectors without reducing credit
opportunities for consumers.
Finally, the BSP should liaise with government pension systems to encourage membership, and
regular/timely payment of premiums to national pension and retirement funds among household members
who are self-employed and unemployed.
The results of the survey affirm the relevance of the BSPs commitment to financial inclusionthe
provision of a wide range of financial services (credits, savings, payments, insurance) to serve the
demands of different market segments; the availability of financial products appropriately designed ,
priced, and tailor-fitted to market needs and capacities; the participation of a wide variety of strong and
sound institutions to provide financial services to more Filipinos; and the effective interface of bank and
non-bank products/delivery channels, technology and innovation to reach the financially excluded. The
survey results also attest to the importance of the BSPs advocacy for inclusive and proactive economic
and financial education among its stakeholders.