Filipinos: Asia’s Good Short-Term Savers, Rank High in Debt

A survey by Manulife Investor Sentiment Index (MISI) revealed that among all Asian countries, Filipinos are among the best in terms of short-term savings and expenses tracking behaviors.

However, the Filipino people also ranked as the second most indebted in the Asian region. According to said survey, most Filipino investors are ineffective in terms of investing their money and savings for long term. Specifically, an estimated 80% of the population has high levels of personal debt.

Almost all Filipino investors surveyed (99%) track their expenses regularly and manage to save part of their income each month. This manages to show that Filipinos have key indicators of good financial discipline. The survey was designed to track investor attitudes towards financial planning across 8 markets in the region.

46% of Filipino investors start to save before age 30 and among those questioned in the survey, an overwhelming majority of investors (91%) claim they will have sufficient savings to meet their financial needs in 5 years’ time. Though this may show that Filipinos are effective savers and possesses a strong record in financial management, the survey revealed relatively high levels of personal debt.

Around 41% of Filipino investors carry debt – the second highest proportion in the region after Malaysia. While 41% of them have relatively small amounts of debt ranging from P5 000 ($106.68) to P24 999 ($533.36), around 7% of them have debts of P500 000 ($10 667.58) or more.

Daily expenses were the main factor contributing to their debt, as cited by almost a third of the group of respondents. This shows indication that the investors’ ability to save regularly may rely on the use of credit to pay for daily living expenses. Outlays for children’s education, medical expenses, and discretionary expenses were also cited and showed in the survey.

Manulife also said in its latest survey that “80% of them wish they had done better investment planning,” and a third of investors wish they had done more research on their investments, while a quarter regretted holding too much cash instead of investing. Another quarter of the respondents regretted not speaking to a financial planner, the survey read. The survey indicates that despite good financial discipline and regular savings habits, investors are failing to effectively invest their savings to generate returns.

Manulife Philippines president and CEO Ryan Charland also said in a separate statement, “While it’s positive that Filipinos demonstrate good financial discipline, effective financial management is about much more than just tracking your expenses and saving regularly. Investors also need to ensure they are managing their day-to-day spending to avoid falling into debt, and that they have clear plans to get the most out of their savings in the long run.”

This is in relation to the findings that said Filipino investors park 26% of their savings in deposits or in investments with no specific purpose.

Charland also added that, “It’s always important to listen to family when making important financial decisions, but investors should consider seeking advice from experts who will be able to advise on how best to maximize return on investment. There are a wide range of investment solutions to choose from and it’s important to find the right product to suit your needs.”