Expanding financial access for every Filipino

Economic uncertainties have pushed more Filipinos to consider financial safety nets, yet achieving long-term security remains a challenge.

A 2024 industry report found that 43% of Filipinos are seeking passive income sources, 39% are prioritizing emergency savings, and 32% are focused on financial freedom after retirement. However, major hurdles remain, with rising healthcare costs at 82%, inflation at 81%, and concerns over economic slowdown and recession at 78% weighing heavily on financial decisions.

Despite the availability of banking services, many Filipinos still prefer keeping their savings in traditional piggy banks, bamboo containers, or old jars. A study published by PANTAO: An International Journal of the Humanities and Social Sciences noted that distrust in banks stems from fears of bankruptcy or inflation eroding their savings.

However, keeping cash at home poses greater risks, including theft, damage, or misplacement.

The study emphasized that banks serve not only as safekeeping institutions but also as tools for emergency preparedness. Experts recommend maintaining at least three to six months’ worth of living expenses in a secure, accessible account to prevent unnecessary debt during financial emergencies. When emergencies arise, those without savings often turn to quick loans, credit cards, or informal borrowing, creating a cycle where a large portion of income goes toward debt repayment rather than wealth-building.

Risk management is another overlooked aspect of personal finance. Many Filipinos see insurance as an unnecessary expense rather than a safeguard against life’s uncertainties. Life insurance, for example, is often dismissed as a luxury for the wealthy, while non-life insurance is viewed as an added cost rather than protection for assets.

While the country’s insurance penetration improved by 0.06 percentage points in the fourth quarter of 2024 to 1.67%, it remains relatively low compared to the global average of 2.9% and 2.2% in emerging Asia.

According to a JP Morgan report, life insurance with cash value can be a valuable financial tool for asset diversification. Permanent life insurance policies, for instance, include savings components that can grow over time, offering additional financial security.

Investment as wealth-building tool

According to the Bangko Sentral ng Pilipinas (BSP), saving is essential for financial security as it provides readily available funds for emergencies and short-term needs. However, these accounts offer minimal returns and often fail to keep pace with inflation.

Investing, on the other hand, involves purchasing assets that can appreciate over time, with the potential to generate higher returns. The BSP stated that income is a person’s most powerful wealth-building tool. Without strategic investing, hard-earned money may not reach its full potential.

While investments carry risks, they also provide opportunities for financial growth, helping Filipinos move beyond mere survival toward true financial independence. Middle-income Filipinos are exploring investment opportunities to grow their wealth, including stocks, mutual funds, real estate, and digital assets.

Such investors are typically investing to prioritize specific life objectives such as homeownership, education funding, or retirement planning. For them, the goal is not just wealth accumulation but securing a future that can withstand economic uncertainties.

Beyond financial gains, focusing on long-term objectives means investors are less likely to make impulsive decisions driven by short-term market fluctuations. This method helps to break away from the traditional approach of a one-size-fits-all investment solution.

However, 75% of Filipinos still do not invest, according to the BSP Financial Inclusion Survey. Many hesitate to enter the investment space due to a lack of knowledge, fear of risk, or unfamiliarity with financial products. The central bank also reported that the lack of financial literacy discourages people from considering investments, as many view them as risky or exclusive to the wealthy.

Journey towards financial inclusion

The BSP said that many Filipinos remain outside the formal financial system, unable to maximize opportunities that could improve their financial standing.

While women in the Philippines have higher financial inclusion rates than men, large segments of the population still struggle to access financial services. Those most affected include low-income earners, senior citizens, migrant workers and their families, persons with disabilities, indigenous peoples, and forcibly displaced persons.

Micro, small, and medium enterprises (MSMEs), along with agriculture-based businesses, also remain largely underserved. These sectors contribute significantly to employment and economic activity yet receive only a small fraction of total bank loans.

Smallholder farmers, fisherfolk, and informal workers, in particular, face limited access to financing that constrain their ability to expand and improve their livelihoods.

The transition to digital transactions has also introduced new challenges, especially in rural areas where internet connectivity is inconsistent and financial literacy is lower. Many Filipinos remain hesitant to fully embrace digital banking due to concerns about affordability, security, and fraud risks.

In response, the central bank is intensifying efforts to educate Filipinos on key financial concepts through its Economic and Financial Learning Office. The Economic and Financial Learning Program regularly holds activities designed to improve public understanding of essential financial matters.

Recognizing the challenges MSMEs and the agriculture sector face in securing financing, the BSP is promoting alternative lending solutions through Agricultural Value Chain Financing model, which connects agribusiness players with banks to facilitate lending opportunities. Through Circular No. 908, the central bank encourages banks to explore value chain financing as a sustainable way to support the agriculture industry.

In addition, the BSP continues to promote the Credit Surety Fund, which provides collateral substitutes to MSMEs, enabling them to access bank loans. Under the Credit Surety Fund (CSF) Cooperative Act, the central bank works closely with cooperatives and the Cooperative Development Authority to strengthen CSFs in various communities.

Meanwhile, the Department of Finance (DoF) has called on the insurance industry to expand market penetration and position insurance as a mainstream financial instrument and basic necessity for Filipinos.

In a statement, Finance Secretary Ralph G. Recto emphasized that insurance is a powerful tool for poverty reduction and long-term financial security, more than just a safety net.

“Risk is a significant driver of poverty, and adequate insurance coverage is among the powerful tools for mitigating this challenge. Therefore, the life insurance industry [must] hold key positions in winning our battle against poverty,” said Mr. Recto.

The Finance secretary also urged industry players to embrace digital innovation, simplify policies, and develop customer-centric, cost-effective solutions. That way, insurance serves as a comprehensive financial product that integrates protection, savings, and investment benefits tailored to different life stages.

Source: Business World

Developing a new metric for inclusive cities

Four urban personas: developing a new metric for inclusive cities

A study from Cushman & Wakefield sets a global benchmark for how inclusive cities really are across Europe, the Middle East, Africa and Asia Pacific

As the urgency to develop more sustainable cities across the world heightens, Cushman & Wakefield has embarked on a study to measure the social, economic, environmental and spatial inclusiveness of almost 80 global cities across the EMEA and APAC regions.

The global real estate firm has developed the ‘Inclusive Cities Barometer’ to quantify the social value of our cities by mapping, tracking and measuring how inclusive our cities really are.

Across the dimensions

The study measures the inclusivity of 44 cities in EMEA and 35 in APAC based on 9,000 data points, and 110 metrics across four dimensions and 12 sub-dimensions. These dimensions include:

Social inclusion – measuring 58 variables including health and wellbeing, tolerance, respect and personal freedom, education, and population and density growth.

Economic inclusion – a measure of 22 variables including employment, economic vitality and growth, and innovation.

Spatial inclusion – a measure of 25 variables including housing and property, security, safety and social infrastructure, accessibility and urban attractiveness.

Environmental inclusion – a measure of five variables including climate, pollution, and the United Nations SDG score.

The cities represented in the research are at varying stages of their journey towards more inclusive and vibrant urban environments. Instead of ranking them by performance, the Inclusive Cities Barometer measures progress relative to starting points, highlighting an actionable roadmap for improvement.

Cushman & Wakefield defines inclusive cities as ‘urban environments that prioritize diversity, equity, and accessibility for all residents, regardless of their background, identity or socio-economic status.’

The four city personas

The cities were categorized into personas representing different stages of their journey towards developing inclusive urban environments, reflecting varying degrees of maturity.

Mature urban centres: These are cities with a longstanding commitment to social inclusion, that prioritize the needs of all citizens. They focus on equal distribution of wealth alongside strong but balanced economic growth. In EMEA this includes four Nordic capital cities, as well as Amsterdam and Rotterdam in the Netherlands, and Edinburgh and Glasgow in Scotland. In APAC, Australian cities such as Brisbane, Perth, Sydney and Melbourne sit firmly in this category.

Social drivers: These cities are demonstrating strong rates of social inclusion across many of the dimensions, although not as mature in their journey to reduce wealth and lifestyle inequity. Cities in this category include global economic powerhouses such as London, Paris, Brussels, Berlin, Tokyo, Singapore and Seoul.

Rapid risers: Rapid risers are cities previously less active on equitable economic and social development that are now rapidly advancing social inclusion initiatives. This includes cities such as Athens, Budapest, Milan and Warsaw in Europe, and Chinese cities such as Beijing, Shenzhen and Shanghai, as well as Hong Kong.

Emergers: Emergers are at the beginning of their journey to increase rates of inclusivity throughout, but with strong ambitions. In EMEA, these cities are predominantly based in the Middle East and Africa and include Abu Dhabi, Cairo, Istanbul, Lagos, and Johannesburg. In APAC, these cities are located in South and South East Asia amongst whom are Bangkok, Bengaluru, Chennai, Ho Chi Minh City, Kuala Lumpur and Mumbai.

The path forward

As governments chart a course towards building cities that account for the needs of all citizens, the report argues that alongside governance, the real estate and construction sectors have a critical role to play in the future of the urban environment. They can influence the development, management, occupation and strategic planning of cities – thus spreading the burden of responsibility for developing sustainable, inclusive cities more evenly.

In recognizing that the scale and complexity of delivering inclusive cities can be overwhelming, the report urges that the real estate industry takes a more straight-forward approach – to recognize inclusiveness as an asset, not a cost. The report sets out a checklist for developers, investors and corporate occupiers to consider when developing inclusive cities.

The checklist asks developers and investors to consider working with local resident groups to ensure than the consequences of the development on the wider community is co-managed. They should also create destination places that inspire and represent the city’s identity and respond to the needs of the community.

‘Consider employee needs outside the office, factoring in leisure activities ‘

For corporate occupiers, they should consider employee needs outside the office, factoring in leisure activities such as restaurants, entertainment and retail. The building itself should promote health and wellbeing, and offer a diverse range of settings so everyone can find a space they feel comfortable working in.

The report concludes with statement that ‘engaging in socially responsible real estate practices not only enhances community social value but also fosters long-term economic success by building more resilient and vibrant neighborhoods’.

Access the Inclusive Cities Barometer from Cushman & Wakefield here.

Source: Worktechacademy

What is the Filipino Dream?

With a population of 115 million, what do dreams and progress truly mean beyond traditional metrics like GDP and unemployment for the Philippines, the 13th most populous country on the globe?

Through a comprehensive survey of almost 1,500 individuals coupled with ethnographic research and surveys, we sought to dive deeper into the Filipino spirit and the aspirations that shape it by measuring how close individuals feel to achieving their personal dreams.

By measuring how close individuals feel to achieving their personal dreams, this new report captures the nuances of the human experience—intimately personal yet inherently social, and ever-evolving.

The survey found consensus around not one, but two dreams: achieving financial security to absorb health scares and starting a business.

When we asked participants to rank their top dreams from a choice of 15 propositions, 58% of respondents ranked health security and 56% ranked entrepreneurship in their top four.

Rounding out the list were having a large savings fund at 51% and moving into their dream home at 44%.

Read the full report to join us on this journey of understanding—a voyage into the heart of the Filipino spirit through the aspirations that drive it.

the-filipino-dream.pdf

Download PDF • 11.50MB

Source: BCG