MANILA – A party-list lawmaker on Thursday stressed the need to inculcate financial literacy among Filipino youth to aid the country’s poverty reduction efforts and foster economic recovery.
In filing House of Representatives Bill 9058, otherwise known as the Savings and Investments Act of 2021, AAMBIS-OWA Party-list Rep. Sharon Garin said the bill aims to equip young Filipinos with the right tools for long-term savings and long-term investments before senior high school and college or university studies.
The bill seeks to promote investor education, investor protection, and scam-proof the population, as well as enable the young population to understand the fundamental principles of finance and investments as they chart their chosen strand and track for their senior high school years.
Citing the Bangko Sentral ng Pilipinas 2019 Financial Inclusion (FI) Survey, Garin underscored that only half (55 percent) of Filipino adults know the effect of inflation on the prices of goods and services, while only a third (33 percent) of respondents correctly answered questions on interest rates.
The same percentage of respondents also admitted that they do not know how much their savings would be if the interest rate is guaranteed at 2 percent and compounded annually for five years.
Under the bill, a National Investor Education Program shall be established to foster financial inclusion for both existing and potential investors, and enable the development of financial markets through collaborations by the government with both public and private sector participants in the finance and investments industry.
Garin said the savings and investment subject shall introduce, among others, the fundamentals of long-term financial planning, the suitability of financial products relative to one’s risk-reward profile, and an understanding of how different savings and investment products deliver returns.
She expects the proposed law to establish an effective investor education program to encourage sustained retail participation in the capital markets and address the challenge of financial literacy in the Philippines. (PNA)