Filipinos are optimistic but low on financial IQ — says Citibank survey

Despite being more optimistic about their financial future, Filipinos continue to get a low score when it comes to financial intelligence quotient, according to a survey by American banking giant Citibank NA. Filipinos got a financial intelligence quotient of 48.9, or less than half the maximum score of 100, Citi said in its latest Financial Quotient (Fin-Q) Survey. The annual survey measures the Financial Quotient or financial well-being of consumers. While the financial intelligence quotient of Filipinos in this year's survey was a bit lower than 2009's 49, the score is much better than the 46.6 in 2008 and the 47.8 baseline score in 2007 when the survey was launched. Respondents were scored on 11 different areas closely related to financial well-being for a maximum possible score of 100. The questionnaire consisted of over 40 questions and covered a range of topics closely related to financial decision-making and smart financial habits. The survey results validate the American banking giant's commitment to financial education, Citi country officer Sanjiv Vohra said. “The earlier consumers understand the importance of planning their financial future, the closer they can get to reaching their financial goals," Vohra said. "We engage them in an array of discussions from making a budget and sticking to it, to understanding the many investment options available to setting up retirement funds now and not later," he said. However, the survey showed that more than 71 percent of the respondents were very satisfied and satisfied about their overall quality of life, a double digit increase from the previous year’s results. The survey also showed that optimism about one’s financial future is also up from last year at 82 percent while 56 percent confirmed they know how much they would need and have some savings set aside. Optimism is up The positive outlook of Filipinos could be credited to a better understanding of money management, the bank said. It pointed out that 57 percent of the respondents feel they have a “good" or “very good" understanding about money management and personal finances. About 65 percent of the respondents believed that they are better off today than their parents were at the same age, a sentiment that is significantly stronger for those earning P700,000 or more annually. "With better access to financial education, Filipinos are able to manage their current finances, and have become even more conscious about saving for the future," Citi added. The major financial concerns of Filipinos involve building savings back up in the aftermath of the global financial crisis, meeting monthly expenses, and doing a better job of saving for retirement, according to the survey Across 11 countries Conducted by global research firm Big Picture Research, it surveyed 5,500 people across 11 countries including the Philippines. About 500 interviews involving those 18 years and above, with either a bank account or a major credit card, were held in each of the participating countries that include Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, Singapore, Taiwan, and Thailand. About 75 percent of respondents in the Asia Pacific region showed increased satisfaction in their current quality of life. Another 75 percent were “very optimistic" or "optimistic" about their financial future. The survey showed that 65 percent of respondents were confident that their retirement savings would lead to a comfortable life. An increase in the perception of the respondents’ personal financial situation was also noted, as half of them said they are “much better off" or “somewhat better off" compared to a year ago. Vohra said 69 percent of respondents in the Philippines said their credit card plays an important role managing their finances, and 48 percent said that they pay off their full outstanding balance on a monthly basis. “The survey numbers in the Philippines show that Filipinos are becoming more determined to take charge of their money and are responsible users of credit," he explained. The survey likewise showed that 41 percent of respondents believe they have enough insurance to protect them and their families, and 40 percent are confident they have enough savings to last for three months or more. However, Filipinos on average have only nine weeks of savings in reserve. “Across all metrics, we saw an improvement in behavior and attitude towards financial planning, products and services. We will continue to do our part in promoting financial literacy, working with the right partners around the country to engage more Filipinos across all walks of life," the Citi official said. — VS, GMA News