Filipinos still lacking financial preparedness

Many Filipinos still lack adequate overall financial preparedness despite having a clear understanding of priorities, a Sun Life Grepa Financial Inc. study found.

Majority of the respondents in the firm's 2023 Financial Readiness Survey indicated a lack of financial readiness — full preparedness was less than 10 percent — in obtaining protection for their goals and needs.

Despite having identified their financial priorities, majority of respondents said they still lack financial readiness when it comes to securing protection instruments that address their various goals and needs. Perceived full preparedness is less than 10%.

Respondents said they are fully or somewhat prepared when it comes to having funds for emergency use (34%) and for major goals (32%), personal health (32%), and investments (30%).

In terms of respondents’ top financial priorities, the latest priority rankings are consistent with the company’s 2022 survey results, although the percentages have slightly changed. Earning and saving income ranks number one at 69% (previously at 77%), followed by building wealth at 57% (from 60%), and protecting money at 39% (from 33%).

"The changes in variance can be attributed to the sustained 'new normal' or post-pandemic recovery," Sunlife Grepa said.

"Full-time jobs and other income-generating opportunities have become more stable, allowing people room to adjust their financial priorities," it added.

Health protection moved up to fourth position at 29 percent, from fifth last year. Following was child education at 26 percent, which previously held the fourth spot.

Source: Dot Daily Dose

National savings up 26.6% in 2022

The country's total savings grew by 26.6 percent last year as the government continued to reopen the economy and increase the quality of employment, sales, profits and other business activities.

The Philippine Statistics Authority (PSA) reported the total gross savings reached P4.90 trillion in 2022, up by 26.6 percent from the previous year's P3.87 trillion.

Non-financial corporations posted the highest gross savings with P4.16 trillion, followed by financial corporations with P1.54 trillion.

Meanwhile, government and households, including nonprofit institutions serving households, recorded a dissaving of P9 billion and P790 billion, respectively, during the same period.

Among the factors of production, gross operating surplus remained to have the highest share of 55.8 percent in 2022.

This was followed by employee compensation at 36.4 percent and taxes less subsidies on production and imports at 7.8 percent.

The country's gross national disposable income was estimated at P24.93 trillion in 2022, representing a 15.9-percent increase.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said that savings growth last year may be attributed to the gradual reopening of the economy and no more lockdowns taking place.

This led to increased employment, sales, earnings and other economic activities, all of which contributed to larger savings, Ricafort added.

"Higher prices and higher interest rates also partly weighed on demand and somewhat partly contributed to higher savings," he added.

In May, inflation had dropped to 6.1 percent from January's 14-year high of 8.7 percent.

"Going forward, the easing trend in inflation and eventually interest rates, as well as further recovery of the economy from the pandemic, especially hard-hit sectors such as tourism, would help support higher disposable incomes and more savings," Ricafort said.

Source: Manila Times