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5 Reasons Filipinos Don't Save Money

Discussion in 'Culture and Food' started by Bootsonground, Sep 26, 2017.

  1. Bootsonground
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    Bootsonground Well-Known Member

    Did you know that the Philippines has one of the lowest savings rates in Southeast Asia? According to a Bangko Sentral ng Pilipinas survey in 2014, only 1 in 4 Filipino households has savings.

    This is worrying, as it means that in the event of an emergency or sickness, majority of Filipinos have no means to fund their needs. This also implies that they could fall into debt or worse, not be able to cover their emergency needs.


    What keeps most Filipinos from saving? Unfortunately there is no one answer. It's been argued that the Filipinos’ fatalistic or easy-go-lucky attitude prevent many from getting into the savings habit. There is also the lack of discipline and commitment to stay on the savings path. After all, building up savings starts with giving up a portion of your regular income and having the discipline to do this continuously, while resisting the urge to dip into these funds for whimsical reasons.

    Let’s look at the 5 most common reasons cited by Filipinos for not saving, and, if it applies to you, we also share the steps you can take to address this.

    Reason #1: Not having enough money left for savings. This is the most common reason cited by people for not saving. However, if you take this as an excuse, then you will never be able to save at all. The first commandment in personal finance is: Pay Yourself First. Make it a habit to save first before spending the rest of your income. You have to be disciplined and bite the bullet if need be, giving up some expenses in order to make way for savings.

    Reason #2: Leaving things to fate. Trusting that destiny will take care of our finances is one of the most dangerous things that you can do. Although it may appear that things sometimes straighten themselves out, the truth is that you have to do your part to make sure that you have some savings left. When you've figured out how much you can regularly save, make arrangements to have a savings account you cannot easily access, and make sure you put funds into this account regularly. Being proactive in building up your savings is always safer than simply leaving things to fate.

    Reason #3: Not knowing how to save. No diploma required to learn how to save - just your commitment to improve your financial situation. There is a wide range of savings accounts or instruments today, depending on your time horizon and risk appetite. Consult a financial professional on the options that are available for you. Getting started on the savings route can be hard, and staying on it too. But look towards the future and the peace of mind having a nest egg can bring, and that's your best motivation.

    Reason #4: Being buried in debt. Those who have loans to pay often argue that they could not save because they have to pay off their loans first. However, this mindset will keep you from being able to save any money at all, especially if you have a huge loan to pay off. Even as you set aside funds to pay for your debt, do set aside an amount that would go into your savings. This ensures that you will not find yourself unprotected should an emergency happen.

    Reason #5: It's too late for me. It's never too late, and for that matter, never too early either. To save, it is important to plan for how you will save and to make it a part of your budget. This is why it is important to have a budget that will guide you with your spending, and that will help you to minimize extraneous expenses, hopefully to have more money to add to your savings. This entails planning what to spend for in advance, and setting realistic limits for yourself. Having a simple spreadsheet or a list will help you keep your budget in check.

    Saving is the first step towards ensuring your financial health. This is why you have to put an end to the endless excuses and get into the savings habit now. Try not to think of saving as a chore and don’t think of it as something you can do in the future when you have more money. Remember, the money you save now ensures a more secure future for you and the people you love.

    http://news.abs-cbn.com/business/09/25/17/5-reasons-filipinos-dont-save-money
  2. ChoiAndJohn
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    ChoiAndJohn Well-Known Member Trusted Member

    Only one underlying reason..

    The rich man decides what to save and spends the rest. The poor man decides what to spend, and saves the rest.
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  3. Bootsonground
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    Bootsonground Well-Known Member

    The wise poor man decides what to spend, and saves the rest,cleverly invests his savings and becomes rich..
    As long as he is not a,lazy and stupid poor man of course.
  4. OTT
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    OTT Member

    An interesting read , and much truth .
    Many people I have met have very low or no income , so saving is not something they have ever had to think about. Many are living permanently on credit , and any form of income just reduces the debt ,so they can credit again .

    Unfortunately it's a situation that for many will never change .
  5. bigmac
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    bigmac Well-Known Member Trusted Member

    much the same as the UK. usually too much month left at the end of the money.
    • Agree Agree x 2
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  6. Bootsonground
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    Bootsonground Well-Known Member

    How can you live permanently on credit without forever increasing your debt?
    I put this to the test once as an experiment to understand them better..
    We have a neighbour about 1/4 mile away that we both like.. She owns a sari sari store and makes a profit..How much I have no clue as it`s not my business.. Every day an Indian (Bombay) guy visits them to collect a small part of a 30 day loan..After 30 days he has his loan capital back plus a very healthy interest on top..
    One day she came to me crying her heart out because she had fallen behind and blah blah blah!!
    So what I did was clear her debt to the Indian and give her the capital for a months operation at half her previous interest rate.
    After one month she came to my house with the loan payment in full...
    I excepted receipt of the cash and interest..
    I then loaned it all back to her in full on the condition that the capital and my additional interest earned would receive interest in my favour in the month following..
    She continued to pay me for another 3 months in the same manner..
    On the fourth month her original loan had grown to far more than double the original amount..
    Then I said to her on the 4th month,I would be prepared to forego receipt of the original loan and ALL interest and that she could keep it all on the condition that she continue to save the capital and interest to future fund her business.. Another condition was that she NEVER borrow again from Indian loan sharks.
    3 Months later she was back to square one...Not only had the capital and interest that I gave her was gone but the Indian was back screwing her for the 5/6 deal she had before.
    I guess she was too embarrassed to come back and ask me for help again???
  7. bigmac
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    bigmac Well-Known Member Trusted Member

    some years back--in the UK--there was a proliferation of pay day loan operations. for customers whose paycheck didnt quite last till the next payday. needless to say these oprations didnt lose money !
  8. Bootsonground
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    Bootsonground Well-Known Member

    And why should they?
    Money is not free!
    Sign the contract and adhere to it!
    (or am I just being an old fashioned prig?)
  9. bigmac
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    bigmac Well-Known Member Trusted Member

    its funny how so many in the UK dont earn enough to pay for their lifestyle choice.
  10. Bootsonground
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    Bootsonground Well-Known Member

    [​IMG]
  11. bigmac
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    bigmac Well-Known Member Trusted Member

    back in the early 90's--i got into financial difficulties. my--then -wife worked part time--her earnings put food ( and drink ) on the table. i was self employed--earning commission. the company i worked for ( even though self employed ?? ) were slow in paying out. i ran up my credit card and overdraught. i paid all the other bills--rent--c tax--utilities--running the car ( essential).

    the company went under--i didnt get paid what they owed me. i then went to citizens advice---and discovered a hitherto unknown world of credit default--bumping the bank and the credit card--and joining the vast army of others in the UK in the same endless mess. it took me 4 years to pay off--and now i'm older and wiser. i think. i can afford anything i want. problem is when i cant afford what i need.
  12. Bootsonground
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    Bootsonground Well-Known Member


    I was knocked 5 grand in one year from dodgy London building contractors in less than a year in the early 90`s...(back when 5 K was a lot of money)
    Picked myself up..Brushed myself off,paid off my debts...Learned real quick and it never ever happened again!!
    Ups and downs..We all have them.. But what do we learn from all of this?
    Lessons of life!
    But do we all learn?
  13. Maley
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    Maley Active Member

    Its partially the pinoy's fatalistic belief that some higher being will take care of you in the future. Combine that with an some unfounded superstitions, you end up with majority of ppl not planning for their future.

    For example, a person who is newly enployed, the belief is that you have to spend everything and treat everyone on your first salary so more would come back your way. Isnt that the wrong thinking? First pay make sure you have enough money (takingg care lf necessities) to survive the next pay and then pay your debt or save slowly. The peer pressure is tremendous. I remember my very first pay, everyone of my friends was expecting a 'treat' to the nearest karaoke. It was very difficult to say 'no'. Good thing i have the support of my parents (well they told me i no longer get an allowance).

    The concept of saving for emergencies like illness is also treated as 'bad luck'. They will tell you that you by saving for emergencies, you are 'thinking of getting sick'. Hence, majority doesnt have enough to even pay for 'admission fee' (fee needed by private hospital to admit anyone sick which is ave £200).

    That is just a couple of reasons. It is very difficult to change that culture but there are also minor improvements. The venue for saving/investing is slowly growing.

    Back in 2000, you cant find an investment (other than bank deposit) lower than php50k at least . Now, you can open a stock investment account, uitf, mutual funds for less than php5k making it more acessible to mid-income person.
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  14. Scotschap16
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    Scotschap16 Well-Known Member

    Abject poverty.
  15. OTT
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    OTT Member

    That's an interesting story @Bootsonground . I'm not really sure what we can learn from that . Maybe the lady wasn't a very good business woman , maybe the sari sari store wasn't earning enough , or maybe some Filipinos ,like many in other countries , aren't very good at money management .

    I really don't know the answer , but thanks for sharing your story .
  16. Bootsonground
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    Bootsonground Well-Known Member


    Thank you..
    That story is a pretty common illustration of the attitude towards money here amongst local folk..
    We have employed a local guy casually for about 7 years here and his wife for about 2 years.. She resigned last month because she has some kind of tumour on her stomach that is growing bigger and bigger and its making her feel "tired"..
    We suggested to her husband to take her to the public hospital to check it out but he says,
    "whats the point,as if they say she needs an expensive op then they cant afford it anyway"..
    It`s a tough decision for us to insist and pay the fee`s as if there are any complications with any operation she may have,we will probably be held liable by them.. Tricky..
    That said,every year at fiesta time they both have a week off work un paid and borrow enough money for beer,Tanduay and food.. Their expenses for fiesta is 15K minimum.
    I have tried to educate them about savings but it all goes on deaf ears unfortunately.
    When his Mrs gets to a stage of emergency status,we can expect the first visit.
    Fortunately for him..We are old fashioned investors and savers so we may be in the position to help.
    Last edited: Sep 27, 2017
  17. OTT
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    OTT Member

    I think the people around you are very lucky to have such caring and thoughtful neighbours. I really admire your compassion for those less fortunate . Well done , you should be proud of yourselves .
    • Like Like x 1
  18. bigmac
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    bigmac Well-Known Member Trusted Member

    my wifes extended pinoy family are proving to be a bottomless pit when it comes to donations.

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