Filipinos High In Financial Quotient — Citi Survey

MANILA, Philippines — Filipinos scored an all-time high of 52.6 out of a possible 100 points in the latest Citi Financial Quotient (Fin-Q) Survey, passing the 50-point mark for the first time since the survey was launched in 2007.

The Citi Fin-Q Survey is an annual survey designed to measure the Financial Quotient or financial well-being of consumers. All respondents were over 18 years of age with either a bank account or a major credit card.

The Filipinos’ high Fin-Q score can be credited to a better understanding of money management, according to the survey. Fifty-nine percent feel they have a “good” or “very good” understanding about money management and personal finances. This also explains why 94% reported attempting a monthly budget, the highest number across all countries participating in the research.

In this latest survey, respondents were scored on 11 different questions closely related to financial well-being for a maximum possible score of 100. The questionnaire consisted of over 50 questions and covered a range of topics closely related to financial decision-making and smart financial habits.

Citi conducted the survey through research firm Big Picture Qual and Quant Research in late 2011, and results were released this year. The survey covered 4,000 people across 8 countries including the Philippines. Five hundred interviews were held in each of the participating countries that include Australia, India, Indonesia, Korea, Singapore, Taiwan, and Thailand.

According to Citi Country Officer Sanjiv Vohra, the results of the survey reaffirm Citi’s commitment to financial education. “As Citi celebrates its 200th anniversary this year, we remain focused on our efforts to help consumers understand the importance of planning their financial future, and guide them in achieving their financial goals. Citi has been reaching out to a wide range of audiences, looking beyond our clients, to promote financial literacy. We constantly look for opportunities to engage them in discussions on saving and budgeting, understanding investment options and preparing for retirement.”

More than 60% surveyed said they were “better off” compared to 2010, the highest reported level since 2007. Optimism on one’s financial future is also up, with four out of five respondents saying they are “very optimistic” or “optimistic” about their financial future. On savings, 42% reported they save money from every pay.

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.

For the fourth consecutive year, the Citi-sponsored research revealed a year-over-year increase in the Citi Fin-Q Score or financial well-being of Asian consumers. The Citi Fin-Q for the region currently stands at 54.5 out of a possible 100 points, up from 53.2 in 2010, 50.9 in 2009 and 49.5 in 2008.

Majority of respondents (74%) in the Asia Pacific region showed increased satisfaction in their current quality of life, while 70% were “very optimistic/optimistic” about their financial future.

Almost two-thirds (63%) of Asia Pacific respondents expressed confidence that their savings will lead to a comfortable life in retirement. Not a surprising fact, since almost half (46%) reported that they set aside some savings from every pay.

More than two in five Asia Pacific respondents also suggest their personal financial situation is “much better off” or “somewhat better off” compared to one year ago.

“The survey numbers in the Philippines are indeed very encouraging. The results show that Filipinos are becoming more determined to take charge of their finances and are responsible users of credit,” pointed out Vohra.

Sixty percent indicated that they pay off their full outstanding credit card balance on a monthly basis, up 12% from 2010. Filipinos are also looking at investments in the form of cash, real estate and insurance to ensure a comfortable retirement.

Average retirement savings is pegged at P1.56 million, marking an 11% increase from 2010. On the average, Filipinos reported having 10.4 weeks of savings in reserve.

Filipinos have embraced digital banking with fully 70% saying they use the Internet or mobile phone for banking transactions. Given a choice, a majority (52%) expressed a preference for banking online from a home or office computer – the highest number registered among the participating countries.

“What the numbers tell us is that Filipinos are taking a more active role in planning their finances and choosing the financial products and services according to their needs,” added Vohra. “Citi will continue to do its part in promoting financial literacy, working with the right partners around the country to engage more Filipinos from all walks of life.”

source: mb.com.ph

World Bank: 75% of poor don't have bank accounts

(CNN) -- Three quarters of the world's poor are living without a bank account, impeded by physical distance from banks and by bureaucratic roadblocks, according to a World Bank report.

In a 2011 survey of 150,000 adults in 148 countries, it found that more than 75% of adults earning less than $2 per day are "unbanked" or do not use a formal financial institution.

Of 70,000 respondents without a bank account, 65% cited not having enough money to use one as the most important reason. Other top reasons included the cost of opening a bank account being too expensive and a lack of trust in banks.

"I hope policy makers will use this research to help make sure everyone, everywhere, has access to financial services," Her Royal Highness Princess Máxima of the Netherlands and the UN Secretary General's Special Advocate for Inclusive Finance for Development said in a news release.

Among regions surveyed, people in the Middle East and North Africa have most difficulties, with only 18% reporting an account. In high-income economies, nine out of 10 adults have an account at a formal financial institution.

Being 'unbanked' is linked to inequalities, according to The World Bank. The richest 20% of adults in developing countries are more than twice as likely to have an account as the poorest 20%.

Also, in developing economies only 37% of women have a bank account compared with 46% of men keeping their savings in financial institutions.

A bank account could enhance economic opportunities among the poor, as saving and borrowing enables them to start a business or invest in education. Instead, they often rely on money lenders charging high fees, the World Bank says.

"Providing financial services to the 2.5 billion people who are 'unbanked' could boost economic growth and opportunity for the world's poor," says World Bank Group President Robert B. Zoellick.

Mobile banking is becoming a popular alternative to money lenders among the poor, especially in Sub-Saharan Africa. These money transfers through mobile phones enable them to pay bills or make deposits through a text message without traveling or setting up a formal bank account.

Mobile banking is especially popular in Kenya, where about 7 in 10 adults have access to mobile money services, according to Safaricom, a leading mobile network provider that offers money transfers via text messaging through its M-Pesa service.

The world's poorest live in the Sub-Saharan Africa region, with almost 70% of adults living on less than $2 a day. In South Asia, almost 60%of people and just over 50% in Middle East and North Africa live on less than $2 a day, according to the World Bank Report.

source: http://edition.cnn.com/2012/04/19/business/poor-bank-accounts/index.html?hpt=hp_t3