Philippines found most dishonest in region on money matters

Financial education gaps, economic stress and “face-saving” cultural norms have forced Filipinos to misrepresent their finances, making the Philippines the most dishonest country in Southeast Asia when it comes to money, according to a study.

ROSHI, a Singapore-based fintech firm, said in its Financial Honesty Study: Southeast Asia report that the Philippines had the highest financial misreporting rate in the region at 47 percent, which means that about half are not likely to give an accurate picture of their financial situation.

Indonesia came second at 45 percent, then Singapore at 41 percent.

Vietnam was the most honest, with a dishonesty rate of only 34 percent, followed by Thailand at 36 percent.

The problem, ROSHI noted, was that Philippine society tended to place strong emphasis on social reputation despite financial hardship and literacy gaps, making it hard for financially challenged individuals to seek help.

In Philippine culture, ROSHI pointed out that there was “enormous” pressure to keep face despite financial struggles.

“Admitting difficulties brings shame to the entire family and risks exclusion from social support networks that provide vital help,” ROSHI noted in its report based on a survey across different age groups in six Southeast Asian markets.

This makes misrepresentation of finances a “rational way to preserve social standing and maintain access to economic opportunities,” it added.

Economic challenges are also directly connected with financial dishonesty. The Philippines currently has limited economic opportunities, along with a high cost of living.

Vietnam, on the other hand, has a strong anticorruption focus and expanding opportunities. Its culture also emphasizes trust and community accountability, which both sustain “honest financial behavior.”

Overconfidence bias, or believing that one is better at handling finances than they actually are, is also among the factors that can affect financial transparency.

The Philippines had a high level of overconfidence at 60 percent, while that of Vietnam, which was the most financially honest country in the region, was at around 40 percent.

Risky investments

According to ROSHI, overconfidence can lead to risky investments, low savings and poor spending habits.

At the same time, the Philippines had the highest “present bias” at 68 percent, entailing that people would rather spend money now than save for retirement.

“This reflects the reality that when people struggle to meet daily needs, planning for the future becomes nearly impossible,” ROSHI said.

In terms of age groups, young adults (21 to 34 years old) were the most dishonest in their finances, while older adults (50 to 65 years old) were the most honest. This is a pattern that is present across all countries in Southeast Asia.

It still all boils down to social pressures, ROSHI found.

For example, social media trends often tie financial image to personal identity.

“As a result, many young adults make financial decisions in environments that reward displays of material success, making it costly to acknowledge financial constraints openly,” ROSHI said.

In all, there is a need to intertwine financial education and policy with cultural values and economic realities.

“Markets that achieve natural alignment between cultural values and economic incentives around financial transparency create lasting advantages, while those facing cultural-economic conflicts require recognition and adaptation strategies that acknowledge underlying behavioral patterns,” ROSHI noted.

Source: Inquirer

Infrastructure spending slumps in July amid flood control mess

Infrastructure spending declined by 25% in July, amid sluggish disbursements by the Department of Public Works and Highways (DPWH), the Budget department said.

At the same time, Budget Secretary Amenah F. Pangandaman said infrastructure disbursements may remain subdued in the coming months amid the ongoing probe into anomalous flood control projects.

In its latest disbursement report on Thursday, the Department of Budget and Management (DBM) said expenditures on infrastructure and other capital outlays fell by 25.3% to P93.3 billion in July from P124.9 billion in the same month last year.

Month on month, it dropped by 37.3% from P123.8 billion spent on infrastructure in June. 

This marked a reversal of the 6.5% annual increase seen in June after the election ban on public works disbursements was lifted in early May.

The DBM attributed the year-on-year decline in infrastructure spending to weak disbursements by the DPWH, which is currently embroiled in a controversy over anomalous flood control projects.

The Budget department noted the slow DPWH disbursements were due to project implementation schedules, including the timing and phasing of infrastructure activities, as well as delays in procurement, incomplete submission of progress billings and required documents by contractors.

Spending in July was also affected by contractors’ compliance with the new tax clearance requirement of the Bureau of Internal Revenue (BIR) for the release of final payments.

The BIR earlier said the failure of contractors to present their tax clearance will result in the suspension of contract settlements and the imposition of a tax line over the contract amount in favor of the government.

The updated clearance guarantees that every contractor has no outstanding tax liabilities.

“Disbursements for the Revised Armed Forces of the Philippines Modernization Program (RAFPMP) of the DND (Department of Defense) were also lower in July 2025 attributed to the timing of releases, as big-ticket items were scheduled in August,” the DBM said.

At the same time, the DBM said lower spending was partly offset by higher disbursements from the Department of Transportation, driven by local counterpart funding for foreign-assisted projects and the settlement of outstanding payables.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the government should exercise caution to prevent anomalies and corruption allegations.

“However, other infrastructure projects in good order will continue,” he said.

For the January-to-July period, overall infrastructure and capital outlays disbursements slipped by 3.2% to P713.5 billion from P736.7 billion in the same period last year.

The decline was driven by combined factors, including the second-quarter election-related ban and timing of disbursements for the defense modernization program.

As of end-July, the DBM released P4.9 billion to the DPWH for nationwide classroom repairs, alongside P3.5 billion earmarked for the restoration of Gabaldon and other heritage school and the implementation of the Last Mile Schools Program.

‘TEMPORARY SLOWDOWN’

Meanwhile, Ms. Pangandaman said infrastructure spending this year was dented by the election ban, and now the ongoing investigation on flood control projects.

The Budget department warned of a temporary slowdown in infrastructure spending as the DPWH conducts tighter due diligence of projects.

“(This) following rigorous due diligence being undertaken by the DPWH to evaluate and validate status of completed projects, and employ measures to enforce stricter verification of progress billings and other payment claims,” the DBM said.

Earlier this month, the DPWH suspended the bidding of all locally funded projects for two weeks, to help the agency implement safeguards against so-called “ghost” projects.

“The DPWH has also since lifted the suspension of bidding and procurement activities for local projects to ensure continuity and timely implementation of the infrastructure program while implementing safeguards to prevent corruption and ensure compliance with existing laws, rules, and regulations,” the Budget department said.

“Infrastructure spending will hopefully normalize and catch up towards the latter part of the year.”

However, Ms. Pangandaman said it’s too early to tell if the infrastructure slowdown will dent economic growth.

“We’re working with the DBCC (Development Budget Coordination Committee) to crunch the numbers. We’ll know more after the next (DBCC) meeting,” she said.

Analysts said they expect spending to further cool until 2026 amid a widening probe on infrastructure projects.

“We may see even slower infra spending in the coming months amid scrutiny of the DPWH and the corruption scandal,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said.

Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes said the flood control scandal is a “very hot issue” that’s likely to cool infrastructure spending through yearend.

Mr. Ricafort also said slower infrastructure spending could also dampen government spending, which contributes less than a fifth to the country’s economic output.

“Risk is slowdown in infrastructure spending and overall economic growth. But would help narrow the budget deficit and curb growth in overall NG (National Government) debt,” he said.

Source: Business World

A portrait of a Filipino as a consumer

Spending wiser, saving smarter

Filipino customers are walking a financial tightrope — tightening belts, gripping wallets, and bracing for every shift in the economic winds.

In the second quarter, Filipino consumers are seen to be optimistic about their earnings but remain cautious. Consumers are adjusting their attitudes towards budgets and savings, despite the increase in their pay checks to brace for economic shocks.

This consumer behavior is reflected in a quarterly survey from TransUnion. In its Q2 2025 Consumer Pulse Study, it assessed the everchanging consumer attitudes based on the dynamics of income, debt, and identity theft.

“The report underscores a dual reality: optimism about future income coexists with persistent financial stress and caution,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said.

He added that the report implies that consumer confidence is fragile and highly sensitive to economic headwinds such as inflation and job security.

For the banking industry, the future isn’t just about expanding credit access — it’s about earning trust through transparency, personalization, and education.

Mr. Asuncion said that banks that integrate financial wellness tools, alternative credit scoring, and proactive fraud protection will not only meet immediate needs but also position themselves as long-term partners in resilience.

“The winners will be those who shift from being lenders to becoming financial enablers,” he said.

Development Bank of the Philippines (DBP) President and Chief Executive Officer (CEO) Michael O. De Jesus said that banks have the responsibility to improve financial literacy among the population.

But to do this, a better understanding of individual attitudes toward savings is needed.

SAVING SMARTER

Mr. De Jesus pointed out that saving is essentially setting aside the money we earn due to different reasons, and mostly these reasons for savings are valid enough but the challenge is not in “piling up cash” but how we manage it.

“Saving may be a ‘good idea,’ but it is never going to make one seriously wealthy unless you can save a massive proportion of your income and your income is massive as well,” he said.

While saving is a commendable act, investing, on the other hand, can generate wealth, provided there is money to begin with.

“Saving can be a virtue, but you have to move beyond keeping your money in savings and start investing to reap the full benefit,” he advised.

He added that as financial institutions, providing consumers the knowledge (financial literacy), planning tools (wealth and asset management) and savings and investment products to achiever their life goals are necessary.

INCOME AND SPENDING

According to the TransUnion report, consumer financial health stayed mostly stable as 41% of consumers suggested a rise in their income for the past three months, while 73% of Filipino consumers expect a rise in come next year, an optimistic outlook on their financial futures.

Still, financial stress is evident with 44% of consumers expecting difficulties in paying bills.

This financial worry mirrors that consumers are cautious in spending and adjusting their savings, driven by concerns in inflation and job securities.

Still, the report highlighted that there was a 45% increase in emergency savings and a 47% cutback in discretionary spending in the past three months.

Moreover, some were upbeat in managing their finances by increasing savings and paying off debt faster.

“Spending patterns reflected a balancing act between optimism and constraint,” the report noted.

“This often leads to a ‘bunker’ mentality as consumers scrimp on spending and buttress their savings for the expected ‘rainy days’ ahead,” he noted.

He cautioned that if this “behavior” cascades among consumers, it could lead to a recession. In turn, businesses may respond to reduce demand by cutting back on productions on their services and goods.

“The shift in savings behavior means many households adopt a more conservative mindset, prioritizing liquidity and financial safety versus ‘wants’ spending — which benefits the consumer, the financial institutions, and the economy in the long run,” Maybank Philippines said.

This provides peace of mind for consumers amid uncertainty and prevents them from falling into debt in emergencies. While they continue to spend, consumers will seek value to justify what they spend.

“Consumers may become more receptive to financial literacy campaigns and products framed around security, preparedness and long-term goals,” Maybank said.

This indicates an increased demand for savings accounts, time deposits and low-risk investment products as the appetite for personal loans and credit card spending tempers.

“Higher savings means better ability to lend out these funds to businesses,” it said, which in turn will boost long-term growth and help strengthen the economy.

For Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., this behavioral shift aligns with conventional economic thought as households shift their budgets to prioritize essential while cutting back on discretionary spending during challenging periods.

“The growth in personal loans have helped support domestic consumption throughout the period of elevated inflation, delivering robust household expenditure,” Mr. Mapa said.

He added that as inflation slows, this should at least help restore some purchasing power to help households restore savings or pay down loan balances.

SAVINGS AND CREDIT BEHAVIOR

As highlighted by the report, rising prices, job security and interest rates were the sources of caution of consumers and financial institutions are taking countermeasure in addressing these financial woes.

For Rizal Commercial Banking Corp. Credit Cards President and CEO Arniel Vincent B. Ong, financial institutions can ensure their borrowers added value for using their credit cards on everyday essentials to help address rising prices and cost of living pressures

“Lenders can help address the concern on job security (and its resulting income uncertainty) by offering flexible payment programs for customers,” Mr. Ong said.

For Mr. Mapa, the central bank’s lowering borrowing costs provide relief to households and firms.

“Lower interest rates will help firms hire more workers or invest to bolster operations, resulting in increased efficiencies and or job creation,” Mr. Mapa explained.

Latest government data showed inflation picked up 1.5% in August from 0.9% in July. This was the fastest reading since the 1.8% recorded in March.

A year earlier inflation rate was higher at 3.3%.

Meanwhile, in late August, the Monetary Board slashed the target reverse repurchase rate by 25 basis points (bps) to 5% from 5.25%, for a third straight meeting.

Since it began its easing cycle in August last year, the BSP has reduced borrowing costs by a total of 150 bps. In its last two meeting this year, it delivered two 25-bp cuts each in April then in June.

On the other hand, government data also showed that the Philippine economy expanded by an annual 5.5% in the April-to-June period, slower than the 6.5% growth in the same period last year.

However, this was a tad faster than the 5.4% in the first three months.

In the first semester, GDP growth averaged 5.4%, significantly slower than the 6.2% a year earlier.

The latest gross domestic product print (GDP) missed  the lower end of the government’s 5.5% to 6.5% growth target this year.

Results of the study also showed that 58% of Filipinos see access to credit as a “major enabler” of their financial goals. But even so, 57% had dropped their application or refinancing proposal due to fears of rejection resulting from income or work status and the high cost of new credit.

“To meet strong demand for credit while addressing fears of rejection and high costs, banks need to adopt a more inclusive and transparent lending approach,” UnionBank’s Mr. Asuncion said.

This, he added, includes leveraging alternative data such as utility or rental payment history, for credit scoring to assist those with limited credit files.

He noted that ultimately, banks must position credit as an enabler of financial stability, not just consumption.

For RCBC’s Mr. Ong, an effective way for banks to adapt their lending approach is by utilizing nontraditional sources of data.

“Banks have relied on a combination of traditional employment documents proof and data from credit bureaus — which means that first-time borrowers or those working in the gig economy have no access to credit,” he said.

In this day and age where data is king, there are numerous other data points available that can help predict a borrower’s creditworthiness, Mr. Ong said.

“Financial institutions must make a strategic decision to leverage this alternative data in order to expand the population of credit-worthy individuals.”

MANAGING FINANCIAL STRESS

It is worth noting enough that banks should invest in financial literacy or education to aid consumers in making informed decisions to adjust their spending and saving patterns amid inflationary pressures, and economic uncertainty.

For the Bangko Sentral ng Pilipinas (BSP), it said that it has been a pioneer in promoting financial literacy in the country when it established the BSP Consumer Education Committee.

This established a structured financial education program to empower Filipinos in making informed financial decisions.

Efforts include BSP e-Learning Academy, collaborative programs, innovative programs for marginalized sectors, training and capacity building, financial learning sessions, digital platforms, and educated materials.

For RCBC’s Mr. Ong, banks can play a crucial role in enhancing consumers’ financial literacy and health through various strategies such as educational resources, user-friendly tools and apps, transparent information and promoting savings.

“Private financial institutions as well as BSP roll out programs to help grow financial learning and literacy to equip households and firms with the understanding and knowhow to navigate the challenging economic landscape with the help of financial market tools,” Mr. Mapa said.

For Mr. Asuncion, banks in the country and the BSP are investing heavily in financial literacy to help consumers make informed decisions amid inflation and uncertainty.

Initiatives [may] aim to build resilience, promote responsible borrowing, and empower Filipinos to navigate inflationary pressures and economic uncertainty, said Mr. Asuncion.

The central bank strongly urges banks to go beyond providing basic access to financial services and improve in strengthening their clients’ financial health.

“Banks are well-positioned to champion financial literacy because of their direct interaction with consumers and their central role in financial transactions,” the BSP said in an e-mail.

It added that by embedding financial literacy into their products, promoting responsible lending, scaling education through partnerships, and tracking client outcomes, banks can help convert financial inclusion into financial resilience and well-being.

Banks, businesses, and the government should work to shore up confidence in the overall economy, Mr. De Jesus said.

“[This can be done] by loosening credit, such as through interest rate reductions initiated by the BSP, making it easier for borrowing and lending, encouraging business investments that boost the business climate, and ensuring that the ventures we fund will have maximum impact on employment and incomes.”

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Source: Business World