Finance experts have stressed the importance of educating the youth to boost financial literacy in the country, given that a high 41 percent of millennials fail to save. The sector is counted on to help contribute to the strengthening of the country’s economy in the coming years.
At the Financial Executives Institute of the Philippines (Finex) Future Business and Finance Leaders Forum at the De La Salle University (DLSU) in Pasay City over the weekend, COL Financial Group Inc. Chairman Edward K. Lee stressed the importance of investing early. He said this will not only benefit the person but help in nation-building, as well.
“The biggest problem with a lot of people is when you’re doing well, you don’t really plan for your future. You have to have the discipline and to do it regularly,” Lee said.
He said at least 10 percent to 20 percent of what a person earns should be set a side as savings, which may be invested in stocks, mutual funds or in other securities that are, in turn, reinvested for the future. This progression aids in the circulation of money and contributes to overall liquidity in the capital market.
Caylum Trading Institute President and CEO Edmund C. Lee said 41 percent of the current generation do not know how to save money. “Forty-one percent of millennials, this is in the Philippines, don’t know how to save. In fact, 41 percent of millennials spend more for coffee than on savings,” Edmund said.
According to him, the most important skill the youth should understand is the importance of saving, which is a prerequisite to investing and growing your money for the long haul.
“You need to learn how to save and invest at an early point in time. The earlier you are able to forgo all these initial spending, the more you save, the more you will rebate over time,” Edmund added.
He said the financial-literacy rate in the Philippines is one of the lowest in the world and that less than 1 percent of the Philippine population invests in the stock market.
Entrepreneurs, comprising 69 percent of the billionaires of the world, all have investments in the stock market. Lee said if one pursues a career in entrepreneurship, one must not only know how to run and operate their respective business but that one should also know how to invest.
“There are always two sides in entrepreneurship. The first part is being a business owner and running your business. The other side is about the stock market because being a passive entrepreneur is all about being an investor among all the big companies in the world,” he said.
The Philippines generates $26.9 million from the remittances of overseas Filipino workers (OFWs), and $25 million more from business-process outsourcing (BPO), helping make the country attractive among foreign investors.
Despite the ups and downs of the Philippine stock market, which has fallen 20 percent to 27 percent over the years, the local output growth or GDP remains robust, averaging 5 percent to 6 percent.
“Today, we are one of the luckiest countries in the world because we have one of the youngest demographics, with an average age of approximately 23 years. Most people are entering the work force, [helping create more opportunities,” Edmund said.
According to Edmund, the government and the country’s educational system should be more proactive in terms of spreading financial literacy among Filipinos. The absence of effort by both institutions need be addressed.
“The government is supposed to take care of the working person through pension. If it’s not the
government’s responsibility to teach people about investing, then we have a problem. It’s tied together with the educational system. But for the schools, at least we’ve seen a big activity in terms of cooperation with financial institutions, trying to teach more about financial investing. I believe the schools are required to teach financial literacy not just about investing, but really being financially literate. It’s not just for people taking up finance courses,” he said.
An initiative of the De La Salle University in terms of promoting financial literacy among its students and the youth is its collaboration with the Bangko Sentral ng Pilipinas (BSP) in offering an Islamic Finance course by 2019, according to Dr. Brian Gozun, dean of the Ramon V. Del Rosario College of Business in DLSU.
Finex executives during the event said stock market or finance courses have already been approved by the Commission on Higher Education (Ched) and included in the lesson plans of certain schools and colleges as early as the secondary level.
COL Financial Group Inc. plans to have more branches in the Philippines first before eyeing expansions in the Asean.
“We are focused basically on building COL Financial branches in different parts of the Philippines. Now we are 90 percent in terms of educating the public because less than 1 percent of the Filipino people are investing in the stock market,” Edward said.
Edward added COL Financial said the Philippines has a huge upside, which is why the group is focused in the region. The wealth management company has one branch in Hong Kong that trades global market stocks for the more sophisticated investor.
On whether it is wise to invest in the long term or short term, Lee said it is better to invest in stocks for the long term.
“There is no point in doing short term because 85 percent of those [investing for the short term] lose money,” Edward said.
This Article Was Originally From *This Site*
Powered by WPeMatico