“Kapos pa rin si Juan!” (Nine out of ten Pinoys experienced financial shortage last year)

“Kapos pa rin si Juan!” (Nine out of ten Pinoys experienced financial shortage last year)

Jun 04, 2014

An alarming 9 out of 10 Juans and Juanas experienced financial shortage in the last 12 months! Yes if you’re in a room of 10 people there’s only one person who didn’t experience financial shortage last year. This is according to a survey conducted by Social Weather Stations (SWS) in partnership with Sun Life of Canada (Philippines) Inc.

The survey was conducted during the first quarter of 2014 among Filipino adults nationwide belonging to classes A,B,C,D and E. This is part of Sun Life’s efforts to understand the Filipinos’ attitude toward personal finance. Less than a year ago they also presented their survey findings under their research project called SOLAR (Study of Lifestyles, Attitudes, and Relationships). (Click link for interesting results and insights discussed in my previous article.)

Saan kinapos?

The respondents said that they experienced shortage in the following:

74% – household expenses such as rent, utility bills, and food

41% – school expenses for children

25% – medical treatment

25% – loan payments

If you look at the above items, you don’t see big surprises in the expense items. The most may be the medical treatment, but still, illnesses should be expected. The sad thing is that a huge 74% is shortage on basic living expenses.  Now that our kids are back to school, I’m sure school expenses are occupying the worry quota of many parents these days.

Bakit kinapos?

When asked for the causes of the shortage, the respondents replied:

7/10 – increase in prices

4/10 – earned less

3/10 – unexpected expenses

1/10 – not able to plan

Again, if you look at the answers, the biggest blame is on the inevitable inflation. Incidentally, we are experiencing favorable inflation rates these past few years, as compared to historical rates. Interestingly, only 1/10 owned up to the cause of the financial shortage, which is lack of planning. In other words, “Isa lang ang umamin!”

Paano na ngayon?

Asked about the steps they took or will take to address the financial shortage, here are the courses of action:

7/10 – control expenses

4/10 – additional sources of income

Others – borrow from relatives, friends/neighbors, money lenders; sell or mortgage properties.

Unfortunately, no one mentioned investing as a way to address the problem. We can probably say that Juan cannot think of investing if his subsistence is still his main preoccupation. Yes this is true, but I think it is a sign that we still have a long way to go in terms of educating our population about the laws of money. Maybe the notion that investing is only for those who have excess money is still the predominant way of thinking. The truth is investing is for everyone. Because of the inevitability of inflation, everyone should do something to beat it. The good news is, to a certain extent, there has been a democratization of investing. Investment instruments (both in fixed and equity) are now available in low minimum lots like P5,000 or even lower for easy investment programs, thus, making them accessible to most people who have the discipline and commitment to invest. Moreover, kiddie savings accounts of commercial banks are now offered at no minimum balance. So really, even low-income families can do something about planning and embarking on their financial journey now.

Only half of respondents are willing to learn.

This survey finding was a bit disturbing to me. I don’t know if it’s a sign of hopelessness or maybe because of this unspoken Filipino tradition: the cycle of dependency, as reported by Sunlife. The bahala na and puede na attitude should be replaced with Pag sama-sama kaya natin ‘to! Fortunately, I see a growing awareness of financial literacy among Filipinos. Volunteer groups of ordinary Pinoys, the OFWs and others are doing initiatives here and there to increase the FQ of our kababayans. In fact, my husband and I will be going to Singapore this month to conduct a workshop on Family Finance and Investing to our OFWs there.

Get into the heart of it.

I believe that money issues are always deeper than what they seem. That is why I advocate bringing money discussions into the family dinner table. We have to be open in discussing money in a healthy and happy atmosphere with our family and starting our children young is important. It is everyone’s business to know where the family is financially so that all the members can move in unison towards a common financial goal.

Come to think of it, how come some parents still give cellphones and other gadgets to their children even if some of their more basic needs are hardly met? Because it’s difficult for parents to see their children “api” or “kawawa” so they inadvertently teach them to live up with the Jonases.  But if money matters coupled with family values are openly discussed, I guess the kids themselves would be the ones to say, “It’s okay, I don’t have to buy that gadget!”

The tradition of over-giving to children is true across social classes. Last weekend, I heard of a story of a rich family who got into a lot of debt but the parents continue to spend lavishly on their children’s weddings, studies abroad, travelling first class, etc., as if everything’s still the same. It’s a combination of overprotecting their children and giving too much importance on external appearances.

Unlikely Analogy

Giving too much importance to appearances is the reason why it’s hard for most people to curtail spending for “porma’s” sake. They want to look successful so they indulge themselves in luxuries they can’t afford. They’re not observing the third law of money in my new book The Retelling of The Richest Man in Babylon. A signature outfit gives them more satisfaction compared to a handsome amount of money invested for the future, because no one else can see the investment, unlike the screaming logos of the signatures outfits. This reminds me of what my mom used to tell us about wearing nice underwear, “Always wear nice underwear, especially if you go out of the house. Even if no one knows it, you know it. And if something happens to you, you will not be embarrassed.” Come to think of it, wearing nice underwear is so much like having a sound Balance Sheet. No one has to know it, but you do, and that gives you the peace and happiness inside. And when something happens to you, you won’t be embarrassed because you have prepared well!    

Let’s declare independence.

In a few days, we will be celebrating our 116th Independence Day. Let’s make financial independence part of this celebration. Because no matter how much freedom we have in the other aspects of our life, if our financial matters are in a mess, we continue to be enslaved by worries of where to get the next meal, tuition, loan repayment, rent, medical bills, etc. Let’s be free from the bondage of external appearances and make saving and investing a way of life. If we all do this, someday, hindi na kapos si Juan!


1. Special thanks to Sun Life for sharing their survey results. Congratulations to the power women of the firm, Riza Mantaring, President & CEO; Mylene Lopa, Chief Marketing Officer; Riena Pama, President of Sun Life Asset Management for their continuing efforts in financial literacy.

2. To the Filipinos residing in Singapore, my husband Marvin and I will be there on June 14, 2014 to conduct a Workshop on Family Finance & Investing. This is arranged by TGFI (The Global Filipino Investors). It will be from 1-6pm at the Anson Centre  #03-53, 51 Anson Road, Singapore (079904). Last few seats available. Click this link to register, or contact Richard Macalintal 8223-5186 or rlmacalintal@yahoo.com.