How do Filipinos rank in financial literacy?

Shadz Loresco
The Philippines ranks 8th among 16 Asia-Pacific countries covered by the latest MasterCard Index of Financial Literacy

FINANCIAL LITERACY. The Philippines ranks 8th out of 16 Asia-Pacific countries covered by the MasterCard survey on basic money management, financial planning and investing. Photo by AFP

MANILA, Philippines – The Philippines recorded 68 index points and ranked 8th among 16 Asia-Pacific countries covered by the latest MasterCard Index of Financial Literacy.

The Philippines’ score in MasterCard’s 4th annual survey is almost the same as the Philippines’ index score of 68.2 in 2011.

“This Index of Financial Literacy is a good measure of whether and how people in the Asia/Pacific region are making informed decisions around their home finances,” said Georgette Tan, MasterCard’s group head of Communications, Asia/Pacific, Middle East & Africa.

The recent survey, released on July 3, was conducted with 7,756 respondents aged 18 to 64 from Asia/Pacific markets between April and May 2013.

Three major components are considered in the calculation of the final index score: basic money management (50% weight), financial planning (30% weight) and investment (20% weight). Regional Aggregates had been calculated via the average of the components of individual countries before these weights were applied.

Philippine respondents rounded up 67 index points for basic money management, 74 index points for financial planning and 58 index points for investing.

The ability to manage money involves skills such as day-to-day budgeting, paying up bills, handling credit commitments and saving up for big purchases. Investment proficiency includes understanding bank statements and complex investment concepts.

New Zealand remained at the top of the list, with 74 index points, and also in matters related to fundamental money management skills. China has come out as the most proficient in investment, Myanmar in financial planning.

Japan fell at the bottom of the chart with its overall financial literacy at 57 index points.

“There are divides across our markets that reflect the gap between the developed and the developing. Financial literacy is a concern where a large proportion of society are without the support and education that is taken for granted in the developed world,” Tan added.

A developing country, the Philippines was the sole market from the list to have low levels of financial literacy from the demographic of 30-year-olds who are married at the same time. Becoming financially savvy is more pronounced with marriage and increasing family obligations, such as household expenses, education and financial commitments.

Below are the scores of the 16 countries in the survey: 

Ranking  Overall Financial Literacy Index Basic Money Management Financial Planning  Investment

1. New Zealand

  74 77 74 63

2. Singapore 

72 73 80 58

3. Taiwan

 

71 68 83 63

4. Australia

71 75 70 63

5. Hong Kong

71 71 72 67

6. Malaysia

70 67 82 62

7. Thailand

68 63 81 61

8. PHILIPPINES

68 67 74 58

9. Myanmar

66 54 88

10. China

66 58 79 68

11. Bangladesh

63 56 76 60

12. Vietnam

63 57 80 52

13. Korea

62 58 78 48

14. Indonesia

60 56 75 47

15. India

59 50 76 57

16. Japan

57 58 68 39

 

The interviews for the MasterCard Financial Literary Index, with questionnaires translated to the native language when necessary, were conducted through internet surveys, face-to-face and through telephone and Computer Aided Telephone interactions. – Rappler.com

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