Focus on financial literacy program
Amid the pandemic, more people were encouraged to invest in bonds and stocks, while several institutions offered free financial literacy online
Policymakers should focus on pushing financial literacy amid the prevailing Covid-19 pandemic, as a veteran financial analyst suggested.
Jonathan Ravelas, a stock market veteran who recently joined e-Methods for Business Management Corp. as financial services and strategy consultant, advised policymakers to include financial literacy programs for underserved and unbanked Filipinos so “they can achieve financial inclusion.”
Citing the digital payments adopted by some financial institutions, Ravelas said investors are now more encouraged to do equity trading.
“I guess the trading floor closure always added a functional unification ever since, so I think the only difference now is that people can trade more freely because of technology — so it encourages more of the younger generation to try investing,” Ravelas, who guested in Daily Tribune’s Straight Talk online show, said.
Ravelas sees that the technology calls for greater efficiency in the stock market trading and provides seamless and flawless transactions.
“We have these such financial payments. These are payments happening — thanks to the likes of GCash, BDO, Paymaya (etc.) that people are more encouraged to do equities trading, and hopefully, we’re not just trading, but real investment,” he said.
Amid the pandemic, more people were encouraged to invest in bonds and stocks, while several institutions offered free financial literacy online.
Ravelas sees that strengthening the partnership between the government and the private sector to elevate Filipinos’ financial education and literacy can be beneficial amid the efforts to revive the entire Philippine economy hit hard by the pandemic.
The latest e-payments data of the Bangko Sentral ng Pilipinas (BSP) showed that the share of digital payments to total retail payments volume in the Philippines rose to 30.3 percent in 2021 from 20.1 percent in 2020.
Former BSP Governor and now Finance Secretary, Benjamin Diokno, cited the need to boost financial literacy further, especially now that digital transactions have increased.
Diokno likewise highlighted the advantage of pushing financial literacy programs for individuals and the country’s economy.
“A financially resilient citizen can be more productive and contribute meaningfully to nation-building,” Diokno previously said.
Based on the BSP Financial inclusion survey, around 48 percent of Filipino respondents said “they have savings, but this increased to 53 percent in 2019. About 18 percent of the respondents said they place their savings in banks, which increased to 21 percent in 2019.
Diokno cited the 2015 World Bank survey on adults’ financial literacy, showing that Filipinos’ financial literacy lags at 25 percent compared to 59 percent in Singapore, 52 percent in Myanmar, and 36 percent in Malaysia, among others.
In December last year, the House of Representatives approved on its second reading a measure promoting financial inclusivity and literacy — especially for those living in rural and underdeveloped areas to ensure equitable access to financial technology.
House Bill 10582, or the “Rural Financial Inclusion and Literacy Act,” aims to upgrade the lives of the marginalized sectors, including farmers, fisherfolk, and informal workers — by addressing the considerable gap in financial inclusivity.
It also seeks to establish a financial system “benefitting all Filipinos, regardless of socio-economic status, and thereby contributes to inclusive growth and development, especially within rural and provincial areas.”
Ang Probinsyano Partylist Representative Alfred de los Reyes, author of the bill, said the measure addresses issues on financial awareness, trust, inclusion, and access.