Pinoys more optimistic about their finances

Manila, Philippines – Filipinos are now more optimistic about their financial future but continue to get a low score in terms of financial intelligence quotient, a survey conducted by American banking giant Citibank.

In its latest Financial Quotient (Fin-Q) survey, Citi said Filipinos got a financial intelligence quotient of 48.9 or less than half the maximum score of 100. The annual Citi Fin-Q Survey is designed to measure the Financial Quotient or well-being of consumers.

The financial intelligence quotient of Filipinos in this year’s survey was slightly lower than 2009’s 49 but much better than 2008’s 46.6 and the baseline score of 47.8 back in 2007 when the survey was launched.

Respondents were scored on 11 different questions closely related to financial well-being for a maximum possible score of 100. The questionnaire consisted of over 40 questions and covered a range of topics closely related to financial decision-making and smart financial habits.

Citi country officer Sanjiv Vohra said the survey results validate the American banking giant’s commitment to financial education.

“The earlier consumers understand the importance of planning their financial future, the closer they can get to reaching their financial goals. At Citi, we have been reaching out to a wide variety of audiences, not just to our clients, to promote financial literacy,” Vohra stressed.

He pointed out that the bank engages clients and non-clients in healthy discussions to improve their financial literacy.

“We engage them in an array of discussions from making a budget and sticking to it, to understanding the many investment options available to setting up retirement funds now and not later,” he said.

However, the survey showed that more than 71 percent of the respondents were very satisfied and satisfied about their overall quality of life, a double digit increase from the previous year’s results.

Furthermore, the survey also showed that optimism on one’s financial future is also up from last year at 82 percent while 56 percent confirmed they know how much they would need and have some savings set aside.

Citi said the positive outlook of Filipinos could be credited to a better understanding of money management.

The bank pointed out that 57 percent of the respondents feel they have a “good” or “very good” understanding about money management and personal finances.

Furthermore, about 65 percent of the respondents believed that they are better off today than their parents were at the same age, and this sentiment is significantly stronger with those earning P700,000 of more annually.

“With better access to financial education, Filipinos are able to manage their current finances, and have become even more conscious about saving for the future,” the Citi survey said.

The survey said major financial concerns of Filipinos involve building savings back up post the global financial crisis, meeting monthly expenses, and doing a better job of saving for retirement.

The latest leg conducted through global research firm Big Picture Research surveyed 5,500 people across 11 countries including the Philippines. About 500 interviews involving 18 years and above with either a bank account or a major credit card were held in each of the participating countries that include Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, Singapore, Taiwan, and Thailand. All respondents were over 18 years of age with either a bank account or a major credit card.

For the third consecutive year, the Citi-sponsored research revealed a year-over-year increase in the Citi Fin-Q Score or financial well-being of Asian consumers. The Citi Fin-Q for the region currently stands at 54.6 out of a possible 100 points, up from 52.3 in 2009, and 50 in 2008.

About 75 percent of respondents in the Asia Pacific region including the Philippines showed increased satisfaction in their current quality of life. An equal number, 75 percent were “very optimistic” or “optimistic” about their financial future.

The survey showed that 65 percent of respondents expressed confidence that their retirement savings would lead to a comfortable life in retirement.

The survey also marked an increase in the perception of the respondents’ personal financial situation, as half of them said they are “much better off” or “somewhat better off” compared to one year ago.

Vohra said 69 percent of the respondents in the Philippines said their credit card plays an important role in helping them manage their finances, and 48 percent indicated that they pay off their full outstanding credit card balance on a monthly basis.

“The survey numbers in the Philippines show that Filipinos are becoming more determined to take charge of their money and are responsible users of credit,” he explained.

Likewise,the survey showed that 41 percent believe they have enough insurance to protect them and their families, and 40 percent are confident they have built up enough savings that would last them three months or more.

However, Filipinos continued to have only nine weeks of savings in reserve on the average.

“Across all metrics, we saw an improvement in behavior and attitude towards financial planning, products and services. We will continue to do our part in promoting financial literacy, working with the right partners around the country to engage more Filipinos across all walks of life,” the Citi official said.

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. –Lawrence Agcaoili (The Philippine Star)