Philippines is at the bottom 30 in the Financial Literacy Survey Standard and Poor’s research found out that there are only 25% of Filipinos are financially literate, making it challenging for the country to gain access to other sophisticated financial services. According to the research firm, in the 143 countries that they have looked into, the financial literacy rates are ranging from 13% to 71%, with Yemen at the bottom and Denmark, Sweden and Norway sharing the top place.
In Global terms, only one in three adults or 31%, showed an understanding of task financial concepts such like diversification, risk management, compound interest, and many others. The study found a trend in the data, with the higher financially literate coming from developed countries and lower financially literate coming from less developed countries. This highlights the challenges for the latter countries in the fast evolving financial markets. In the Southeast Asia countries that are included in the survey, Singapore scored the highest with a financial literacy rate of 59%. Cambodia is the lowest, having only 18% financial literacy.
It is absolutely important for a country to be financially literate. Countries should not just focus on building skillful people but they also must have a good financial knowledge to maintain the financial markets. Without learning these skills the country will be prone to high debt, mortage defaults or insolvency. Meanwhile, in China there is an evident growth in the credit card market yet the country only scored 28%. It is also evident in Asia that the younger respondents tend to be more financially literate than their older counter parts.
According to Courtney Geduildig, executive president of Public Affairs at McGraw Hill financial, addressing financial literacy is a key strategy in building stronger, more accessible and sustained markets around the globe. While, Matthew Bosrock, executive managing director and head of Asia-Pacific for Standard & Poor’s Rating Services said Understanding concepts like inflation, interest, and other important terms are the core of economic development. Economies can use the findings in this study to identify educational gaps that they must be taken into account in their country plans.