Weak consumer confidence slows solar adoption

Many households are interested in adopting rooftop solar power systems, but concerns about provider trustworthiness and high costs hinder their adoption, according to a study from Ateneo de Manila University.

Homeowners recognize that solar energy contributes to environmental protection by reducing greenhouse gas emissions and air pollution, helping combat the effects of climate change, according to a study by Department of Economics Professor Rosalina Palanca-Tan, published in the journal Challenges in Sustainability.

In a survey of 143 respondents, 82% expressed some interest in adopting solar panels, but only 20% had firm intentions to do so.

Despite the economic and environmental benefits, respondents were reluctant to invest due to the upfront cost needed for installation.

According to the study, a home rooftop solar power setup costs approximately $1,700 (₱100,000), equivalent to more than half a year’s salary for minimum wage workers.

“Many households are unsure if this initial expense is justified by long-term financial and environmental returns,” it said.

The survey found that, aside from costs, trustworthiness of providers, clarity on warranties, and perceived installation quality were equally important considerations.

The study found that while most respondents understood renewable energy’s role in combating climate change, few knew the specific benefits of rooftop solar power or how to find reliable installation services.

“Thus, the study urges stronger government intervention and public education campaigns. In particular, the study suggests improving net metering rates, expanding access to financing options, and accrediting trustworthy RTSP (rooftop solar power) providers to build consumer confidence,” the study said.

Source: Business World

Sun Life survey highlights inflation challenges for retirees in Asia

Retirees in the Philippines are struggling financially amid high inflation, according to a Sun Life Asia survey.

Many of them lament past financial decisions, citing inadequate savings, poor investment choices and early retirement as key sources of regret.

Results of the survey, "Retirement Reimagined: Facing the Future with Confidence" — comprising 3,500 respondents across Asia, including the Philippines — showed 73 percent of Filipino retirees regretted not saving enough, 47 percent wished they had invested more wisely and 38 percent felt they retired too early.

A significant 25 percent said they have been caught off guard by the high cost of living, with 77 percent citing increased general living expenses and 46 attributing it to health care costs.

Despite efforts in savings, the Filipino participants admitted failure in financial preparation. While a number of them managed to save at least 10 percent of their income for retirement, 37 percent said they did not save at all and 21 percent did not foresee their retirement expenses, forcing them to cut back on spending or seek financial support from their respective families.

Inflation has worsened the situation. The Philippines is suffering more from high inflation rates than the Asian average, the survey said.

Consumer price growth hit a 14-year high of 8.7 percent in January 2023, which led the Bangko Sentral ng Pilipinas to tighten its monetary policy.

To date, inflation has settled within the 2.0- to 4.0-percent target range of the central bank at 3.4 percent and the average core inflation to around 2.4 percent, following the four-year low of 1.9 percent in September.

Carla Gonzalez-Chong, Sun Life Philippines chief client experience and marketing officer, stressed the value of financial literacy in addressing these challenges.

"Financial literacy remains key," she said. "We are committed to this advocacy to help more Filipinos overcome the obstacles and enjoy quality lives in their golden years."

The survey also revealed a growing trend among young Filipinos to delay retirement in response to rising living expenses.

Some expect to retire at an average age of 65, significantly later than the current retirees' average of 58. Many younger workers have postponed their retirement plans, with 59 percent citing the necessity of sufficient savings and 46 percent mentioning the demands of covering for increasing expenses.

Source: Business World and Sunlife

Narrowing Asia's financial inclusion gap

Nearly a quarter of the APAC population still lacks access to traditional banking services, according to Statista. Translated, this is hundreds of millions of people who are either unbanked or underbanked, with no access to savings accounts, loans or formal credit.

However, the regulatory environment in many Asian countries is rapidly changing as governments come to grips with the digital revolution.

For example, India's Unified Payments Interface is making digital payments accessible to people of all socioeconomic backgrounds. The benefits support the growth of fintech companies, improve the efficiency of government services, and boost the growth of e-commerce and digital businesses.

In Indonesia, Bank Rakyat Indonesia (BRI) has been leading the charge. Its BRILink network uses local banking agents, allowing people in remote areas to access banking services without visiting a physical branch. Millions have gained access to financial services.

As a result, the thirst for modern payment infrastructure is exploding for existing banking customers. In the Asean region, for example, banks and fintechs increasingly see the need to improve their products to better meet customer needs; digital, hyper-personalized, instant and embedded payment experiences.

However, the emerging policy and innovation initiatives across the region will also create the impetus for tech companies to finally and meaningfully drive significant change for the large swathes of the region's unbanked populations.

It's now up to the industry to respond.

To be clear, financial inclusion is more than just a noble goal — it is a strategic imperative that can significantly boost economic growth, prosperity and stability.

For technology companies, this is a means to tap into substantial market potential.

In our view, the role of tech companies is to provide the tools and infrastructure necessary for financial institutions to offer more accessible services — solutions not only technologically advanced but also culturally and economically tailored to specific markets.

For example, by 2023, more than 480 million bank accounts were opened under India's Pradhan Mantri Jan Dhan Yojana (PMJDY), drastically reducing the number of unbanked individuals, and enabling direct benefit transfers from the government.

Tech innovations like mobile banking, microloans, and digital payment solutions offer services that are both affordable and accessible.

However, these solutions aren't going to magically emerge or reach those who need them.

If fintechs are going to develop solutions that will help to narrow the bankable gap, they need to understand and meet the unique needs of Asian consumers and the commercial landscape more broadly. It also requires fintechs to be alive to the megatrends facing the region.

First, Asia's diverse and large population demands solutions that can scale and be tailored to local needs. This dynamic is pushing fintechs to innovate quickly and efficiently.

Additionally, the competitive landscape in Asia is intense. Startups and established financial institutions are competing for market share. Competition fuels initiative, as companies strive to differentiate themselves with superior products and services.

Asia's relatively young population, like digital natives worldwide, is open to adopting new technologies, especially in digital payments. The demographic trend creates fertile ground for experimenting with new payment solutions.

Asia's continued shift away from cash increases the need to deliver digital payment reliability as the growth trends deepen and accelerate. There's still work required to build confidence and ensure systems are robust enough to handle the rising volume of transactions. This is crucial in Asia, where the stakes of any system failure are high.

Reliability isn't just about transaction success rates; it's about making sure every stakeholder — consumers, merchants and financial institutions — can have faith in the systems.

Security is critical. As more people and businesses rely on electronic payments, the systems supporting these transactions must be secure against external threats and internal vulnerabilities. One breach could destroy carefully built reputations.

This is where reliability goes beyond technology. It's about building trust with consumers new to electronic payments, giving them confidence to use new products and methods. Tech companies can work closely with regulators, financial institutions and stakeholders, invest in consumer education, and continue to develop technology to underpin these systems. The benefits will be felt by everyone.

The future of fintech in Asia is bright, with strategic expansion, innovation and reliability at its core.

As governments continue to prioritize financial inclusion, and as the shift away from cash accelerates, the role of tech companies will only become more crucial. By focusing on these key areas, we can ensure that Asia's financial revolution not only continues but also thrives.

Source: Manila Times