BSP to plug more gaps in financial education

Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said they have a long way to go to equipping every Filipino with enough financial literacy to contribute to the expanding domestic financial system.

“There is much to be done… financial education is a powerful tool. It supports not just individual wellbeing, but also economic growth. With the ability to understand, select, and use financial services, individuals can take advantage of opportunities, and gain maximum benefit from participating in the formal financial system,” he said during the launching of the Financial Literacy Program for Schools and memorandum of agreement signing of the BSP with the Department of Education and the BDO Foundation.

Espenilla cited global studies that indicated the lengths that the BSP and the financial industry had to do to promote financial education in the country.

Based on a World Bank review, Filipino adults on average are only able to an- swer three out of seven financial literacy questions. These are questions on basic numeracy, computation of compounding interest, fundamentals of inflation, and investment diversification.

“Only two percent of Filipino adults have a grasp of these questions,” said Espenilla. “The study also showed that Filipinos lack specific knowledge to make informed financial decisions, particularly with respect saving and borrowing.”

He noted that the study and its results “suggest substantial gaps in financial education. But they highlight clear areas of opportunity.”

“We must take hold of these opportunities as those who develop early habit of saving tend to outperform others in choosing financial products and services, in monitoring their expenses and in planning for retirement,” said Espenilla.