Filipinos good short-term savers, but rank high in debt – poll

Chrisee Dela Paz
Filipinos good short-term savers, but rank high in debt – poll
Despite being cautious in managing their finances, around 4 in 10 Filipino investors carry debt

Manila, Philippines – Filipinos are among the best in Asia in terms of their short-term savings and expense tracking behaviors, but they are also the second most indebted in the region, the latest Manulife Investor Sentiment Index (MISI) survey revealed.

The survey showed that many Filipino investors are unable to effectively invest their savings for the long term, with more than 80% of them having high levels of personal debt.

Designed to track investor attitudes towards financial planning across 8 markets in the region, the survey found that almost all Filipino investors surveyed (99%) track their expenses regularly and manage to save part of their income each month – both of which are key indicators of good financial discipline.

The survey showed that Filipinos are effective savers, with 46% of investors starting to save before 30.

This explains why an overwhelming majority of investors (91%) claim they will have sufficient savings to meet their financial needs in 5 years time, Manulife said in the survey.

But despite this strong record in financial management, the survey revealed relatively high levels of personal debt. 

Second to Malaysia

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. 

INDEBTED. Data from latest Manulife Investor Sentiment Index (MISI) survey

A third of respondents cited daily living expenses as the main factor contributing to their debt, indicating that investors’ ability to save regularly may rely on the use of credit to pay for daily living expenses.

Apart from daily living expenses, a large share of the debt is driven by outlays for children’s education, medical expenses, and discretionary expenses, the survey showed.

Sought for better financial discipline

While the survey suggests that Filipino investors have good financial management, “80% of them wish they had done better investment planning.”

A third of investors wish they had done more research on their investments, while a quarter regretted holding too much cash instead of investing, Manulife said in its latest survey.

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 said Filipino investors park 26% of their savings in deposits or in investments with no specific purpose.

“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,” Manulife Philippines president and CEO Ryan Charland said in a separate statement.

“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,” Charland added. 

Fieldwork for the study was conducted from October 20, 2015 to November 11, 2015 in Metro Manila and Cebu with a sample size of 500. –

$1 = P46.87

Worried man holding a credit card photo from Shutterstock

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