MALAYBALAY CITY (MindaNews / 01 December) – How can the poor get out from circuitous debts?
The question is as basic as that. In the quest for economic and financial literacy, it appears that the most basic questions of the poor are not addressed.
Many attempts to provide financial literacy interventions miss out on the structural causes of the poor’s conditions. Many times, we blurt out the question “why can’t the poor stay out of debts?”
Before COVID struck, I remember brainstorming with a colleague for an extension project that addresses our economics department’s capacity and the prevailing situation in our partner communities. The idea was to promote economic and financial literacy at the grassroots level. To be exact, we looked at the platform of basic education where we could engage not only the learners but also the parents and teachers’ association.
The pandemic disrupted the plan, but the idea is ripe and should be pursued. In a current webinar, the speaker cited that financial literacy has been added in the inputs for families receiving conditional cash transfer via 4Ps. Good job, Department of Social Welfare and Development! However, the speaker cited that despite the inputs, the problem persisted – recipients allegedly still have misplaced value about financial resources.
Back to the webinar, our students gave positive responses to the speaker’s sharing. Two of them spewed the question of #foreverdebts in the chat box.
It is important to integrate financial literacy not only for students with business and economics subjects. It should be for all students, from the basic to tertiary learners.
There was news that the Department of Education has expanded and intensified the integration of financial education in the K to 12 Basic Education Curriculum to improve the financial literacy and capability of its learners, teachers, and personnel to enable them to acquire financial health and financial inclusion. This is another piece of good news.
DepEd issued its Financial Education Policy under DepEd Order No. 022, Series of 2021 thereby making Financial Education an essential part of school lessons and activities for learners and provision of capability building opportunities for teaching and non-teaching personnel.
There is so much work to be done in this order.
Bangko Sentral ng Pilipinas’ 2019 Financial Inclusion Survey showed that Filipino adults could answer only one of three financial literacy questions correctly. More than half (55%) of adults knew the concept of inflation. One third gave the correct answer on simple and compound interest. Out of three financial literacy questions, the biggest percentage of adults (41%) got one correct answer only. Very few (8%) got all three questions correctly.
There is also another layer in financial literacy now, the use of digital transactions.
Another problem lingers. No matter what you teach in school, if the children see their parents continue some practices, they (the children) get confused. Some of them I spoke to said they have acquired their deficit spending habits from parents. Others said their parents’ experiences are deterrents.
Just having a bank account because of inclusion in 4Ps does not guarantee financial literacy at all. Because of this, DSWD has adopted a financial literacy manual for 4Ps recipients. Still the problem of lack of financial literacy remains.
Apart from institutional and curricular interventions, there is a need to address the socio-cultural dimension of the issue, including structural causes.
This is where we see the strength of working with other government agencies, the private sector, the development sector, and people’s organizations in promoting financial literacy.
There should be a strong academe-industry-community partnership to harness the benefits of industry’s ground experience, the academe’s research, and community’s need to address financial illiteracy. This program should go to the unit of government nearest the citizens – the barangays. The question of their capacity is valid and should be included in the agenda when full devolution rolls out.
In the end, it is still any individual’s lookout how to settle his debts, big or small.
Financial literacy is as basic and as important as knowing how to cook food, how to participate in a virtual meeting, how to survive COVID, among others.
It is crucial for everyone to be able to manage their resources, prioritize needs over wants, and keep spending below their means.
Government, however, is duty-bound to ensure that its efforts to push for financial literacy reaches the grassroots and addresses the problem of poverty there.
Mr. Walter I. Balane is a faculty member of a state university’s economics department. The views he presented here represent only his personal insights.