Capacity Building for Research & Design of a New Program for Financial Education at the University of Makati (UMak)

Abstract

There exists a major (and even urgent) need to build up the financial education of the poor, especially the youth. The Filipino youth hardly learn about personal finance in elementary and high school including the importance of saving, thrift values, and other financial habits such as expense tracking, wise spending and the concept of budget planning. More than 50% of the country’s population is under the age of 23.  Despite increased income after graduation, the cycle of poverty in the country continues due to a large extent to the youth’s lack of financial education and acumen about better financial management.

 The Central Bank of the Philippines reported that less than 5% of Filipino youth regularly saved. The Philippines has one of the lowest savings rates in South East Asia, despite similar GDP per capita and Purchasing Power Parity levels to countries like Indonesia and Thailand. Out of 100 Filipinos who get sick, more than 50% will borrow money from family members and relatives because their savings are not enough.

 In general, Filipinos poorly manage their money and don’t see the importance of nurturing good financial habits. Lack of financial education is a major cause why ordinary Filipinos encounter financial struggles.

 This “financial education gap” directly impacts on the readiness of the poor to take on financial services responsibly and with greater accountability.  The University of Makati (UMak) is cognizant of said gap. Thus, the creation of financial education modules and training of dedicated trainers were conceptualized.

 The initial targets of the program were low income Senior High School Students (grades 11 & 12) and low income college youth. These represent the groups who are constantly confronted with the multitude of economic and social woes.  The program is essential to help them navigate the increasingly complex financial challenges in life, starting with the acquisition of the knowledge, skills, and attitudes which will ultimate lead to their improved financial health and will later on provide them with financial empowerment.  This is the same vein which, in the future, could transcend to the country’s economic prosperity.

 By the end of the 12-month study period, UMak received substantive inputs about how to develop a financial education program for low income senior high school and college students.  Two (2) new Financial Education Modules with the appropriate delivery channels to bring about positive change in the financial behavior of students were developed.  Ten teachers and 100 students (50 from senior high school and 50 from college) have been trained and from this pilot training, a minimum of 50% of the participating low income youth or the teachers have adopted positive financial behavior by accumulating and preserving assets equivalent to 10% of their total monthly allowance/income.