Following the first Consumer Finance Survey (CFS) conducted on 2009, Bangko Sentral ng Pilipinas has released the results of its 2014 CFS.
The CFS is a nationwide quadrennial survey on consumer finances among Filipino households. It generates data on the financial conditions of households such as financial and non-financial assets,level of indebtedness and sources of credits, and income, spending and insurance coverages. The survey results also provide a breakdown of respondents residing in the National Capital Region and in Areas Outside the National Capital Region.
Speaking during the Multi-Sectoral Forum on the 2014 Consumer Finance Survey Results at BSP Davao Regional Office, BSP XI Director Sonia Delos Reyes stressed the significant role of the state of household finances in the country’s economy.
“70 percent of the Gross Domestic Product is accounted for by the household final consumption expenditure (HFCE),” she said.
The survey that covered around 15,000 respondents all over the country focused on the assets and liabilities of Filipino consumers as well as their consumption and investment habits.
According to BSP, CFS results indicate favorable demographic dividends as an increase in the young population indicates an addition to the country’s labor force over the next decade.
The BSP XI director cited the key findings of the survey:
“From an asset perspective, we see that the portfolio of households at national level and here in Region XI is comprised mostly of non-financial assets,” she said.
She explained that majority of the households owned home appliances. Second, about three-fourths own or co-own their house and lot. Lastly, more than a quarter of households own at least one vehicle.
“Only 14 percent of households have deposit accounts,” Delos Reyes said.
She added that a very small percentage own securities and investment products such as tax, bonds, mutual funds, immunity investment trust funds.
Meanwhile, the survey results showed low access of households to credit as only 2.7 percent of households have outstanding loans on their residence and 6.5 percent on other real property.
“However, more households have outstanding consumer loans like relative to the real property loan, in such as all-purpose loans at 15.2 percent and motor vehicle loans at 11.9 percent,” said the director.
Delos Reyes reiterated that the same pattern could be observed in Region XI.
Policy implications and recommendations
The director said that the survey indicates that households paid more attention to acquiring non-financial assets rather than financial assets.
She attributed this to the prevailing loan interest rate environment in 2014 which recorded an all time loan savings deposit at an average rate of 0.63 percent and an average bond lending rate of 5.53 percent.
“These findings are therefore valuable inputs to the monetary policy decisions as this could affect monetary and financial stability in terms of higher inflation or increased credit risk,” said the director.
She also emphasized that the CFS result also validated the policy directions that BSP has pursued in the recent years. She stated BSP has consistently worked towards building a more inclusive financial system and has aggressively promoted financial education, encourage more households to give attention to savings and investments.
Finally the director is optimistic as the conduct of CFS matures and progresses, the survey will continue to be a rich source of information tracking the economic progress of Filipino households and identifying the financial challenges they face which will be the basis for improving the agency’s monetary and financial policies and programs supporting inclusive and sustainable growth.