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I'm the kind of person that always finds reasons and purposes why things happen day by day, and takes advantage of the situation I get into. Waking up late to a a little gloomy weather today, I ignored the series of alarm clocks set on my phone and decided to ditch the usual 10km jogging. I woke up to my Mom's usual loud call as she makes rounds in the house (LOL, the house is big indeed). After taking a quick shower, I went to cook pancakes that are good enough for 3 persons. But as I was frying, my Ate told me to be ready and go to my father's shop to help. So I rolled my eyes (knowing there's no one who could see) and muttered 'here we go again... me, the frontliner again...' I just nodded in response. They were all convincing me to move faster so instead of giving my sisters their share, I brought all the pancakes with me and the whole bottle of honey, hoping they'll all find it reasonable enough. When I arrived at the shop, Papa was there waiting for me and his TV was opened with the usual news channel he listens to every morning, the DZMM. Guess what, I was praising God on how gratifying it was to watch the episode for today.
Konsyumer Atbp. was the program I've been talking about. I watched it since I arrived there til it ended. The episode basically covered about the culture of Filipino people on money saving. There were representatives of Bangko Sentral ng Pilipinas (BSP) and Philippine Deposit Insurance Corporation (PDIC) as guests to validate the discussion more. They talked about how we, Filipinos, think about "pag-iimpok" (saving up money) and banking.
I liked the idea of depositing money in banks with the puspose of safeguarding them instead of keeping them in our house such as in alkansya or safe vaults. The banks and the government, most especially the BSP, are highly encouraging every adult Filipinos to create their own bank accounts. In cases of emergency and earning up for an item we plan to buy, having a bank account comes in handy now that we can make transactions without stepping out of our houses as in mobile banking. Everything is becoming digitalized.
There were audience who were wise enough to ask about the difference between having a savings account and investing. One shouldn't be confused with making money grow with saving up in a bank. If you want to find banks with higher interest rates then the concept is investing. Pushing the interest rate a little higher might endanger the bank that's why they emphasized on choosing the right bank with interest rates a little in between. Banco Filipino is an example of an establishment that went bankrupt because of its lack of capability to suffice the high IR it imposed. Lucky enough now, the government created PDIC which insures our deposited money amounting to maximum of Php 500,000. So if you want to safeguard your money exceeding the amount said, better divide your money in different banks.
The first reason why we do have savings account is covered above. There are two good questions that may make us ponder why we need to make our savings account. One, "what if we die young?" Indeed, the sacrifices does not end with people we leave behind. Secondly, "what if we live long?" We may want to spend the rest of our senior years without pain and discomfort. And more importantly, even if our kids are independent by then, we don't come first in their priority if they already started having their own family.
We also consider another reason is that Filipinos think their money can grow on banks. There are three main types of deposit accounts. Aside from Savings Account, another one is called Money Market Account which offers a higher rate of interest than a traditional savings account. However, money market’s interest rate will change more quickly in line with the country's economy. A minimum balance may also be required to maintain the account depending on the bank you choose. Although the account can be accessed any time, the bank will likely impose limits on the number of withdrawals that can be made. The third main type is the Certificate of Deposit (CD). It is a type of savings account that has more rules than a traditional savings account. Thr deposited money is required to leave untouched for a specified amount of time before you have access to the funds. The time period is known as the maturity date and if funds are withdrawn before it, a penalty is incurred. CDs offer a higher interest rate than other accounts which is usually set as at a fixed rate. Many investors looking for a simple way to "invest" their cash will choose the CD.
Maybe some of us don't consider the idea of banking because we, Filipinos, tend to have a strong support system. This can be true such as when we lack funds for the tuition of our kids, we just end up borrowing money from our parents or siblings, which is a lot easier. Another is that some of us cannot afford to save up for the minimum amount of money to start an account or to maintain the account. With continuous price increases on basic necessities such as rice, sugar, meat, etc. Almost everything's prices are going up. It isn't easy to expect people from a third-world country to separate something from their daily budget. There is a high probability of them to result to dormancy because of one's incapacity to sustain the value of our accounts. There are also some who are scared to open up an account discovering later on that there are automatic deductions coming from etc. This is one of the issues being brought up because of our lack of financial literacy.
According to the latest study conducted by BSP, the culture on banking tend to have a regional pattern. And as said, Ilocanos (such in Region I & II) are one of the best known to save up their money in banks. Although National Capital Region (NCR) tends to have the highest amount of money deposited, other regions have more holders of savings account. Although there aren't too many bank account holders in Mindanao, fallen houses in Marawi (after the siege of Marawi) are found to have at least one vault where they keep their valuables. Only 42% of the Filipino Adults are known to have their own savings account with an average of Php 220,000. But studies also suggest that most of the account holders only have an average of 15k.
Nowadays, the world has given us many reasons why we should open our own bank accounts. From paying electrical bills to shopping to sending money over long distances, banking has made our lives easier. I had my first own bank account when I was like 5 or 6 years old because our Mama has encouraged us so. It is where she wants us to keep all the Aguinaldos, earnings from Christmas carols and cash birthday gifts. It was a smart way of raising us to become practical consumers and intelligent when it comes to spending money. The government also fixes seminars to educate everyone on the significance of banking to help money circulate, because that's what money is for. It is not meant to be found secretly kept in any form of alkansya.
I am hoping that the BSP will work harder on educating our fellow Filipinos on important topics such as demonetizing of money, financial literacy, etc.