“Only 20% of the employed Filipino workforce has some form of savings in banks based on recent studies, “ said Mai Sangalang, VP for Communications and Marketing of Security Savings Bank and member of the Bankers Managers Association of the Philippines [BMAP] during the meet and greet with select bloggers at Paul Calvins Deli, Bonifacio Global City yesterday lunchtime.
It is for this very reason that the association has decided to come up with a fun run event. One, they are trying to catch the current bandwagon which is the running boom. It cannot be denied that there is a race almost every weekend. It no longer just holds for merely Sunday morning runs. Now, there are even race events happening on Saturday mornings and even some taking place on a Friday morning and evening. Two, some of the bank members of BMAP have already organized their fun runs and this is a great activity in order to get more members to participate in having an active lifestyle.
But getting back to the 20%, the very first thing that crossed my mind is — why is there such a low penetration of savings? What can be done to encourage people to save? Those questions were answered during the press launch as Allan Tumbaga, president of BMAP, as he explained that there is now a new savings program that is specifically geared to teach children the concept and habit of savings. For instance, there are now about 12 banks that have a savings account program for kids. It’s different from the traditional savings account for kids that I grew up with where the account is still under the custody and care of my parents. For this particular “kiddie” savings account — a child can simply go to the partner banks participating in the program, sign up and start with a modest amount of P100 pesos. This account will not close and will not be subject to penalties though it is considered below the minimum maintaining amount. However, the account will only enjoy earning interest upon reaching a certain amount of money which depending from bank to bank can vary from P3,000 to P5,000 pesos. Furthermore, the association is looking into bringing the banks to the schools in order for the children to be encouraged to make their deposits. This is good news especially to those children who go to the suburbs just to study and go home to small villages where transportation schedules discourage a trip to the local bank which is the reality in many provinces in the Philippines.
The Philippines is becoming a consumer driven market in spite of the many economic challenges it faces. Like it or not, the continued growth of the service sector particularly that of the business process outsourcing industry or the BPO is something that has helped fuel the local economy. And yet it is true that in spite of the economy moving forward, significant savings and investments by Filpino families are still dismall compared to other Asian counterparts like Korean, Japan and even mainland China where some studies show that there are families that save close to 50% of their monthly income! Isn’t that amazingly sad that we are left behind in savings consciousness?
So the question now is how can the BMAP Fun Run help address this? The BMAP Fun Run is a fundraising event for the association to finance its current programs. On top of their agenda is Financial Literacy. This program includes partnering with the Department of Education to help school children learn the value of savings and the value of financial accountability. In addition, it is the FIRST of its kind to have this kind of event where people will be spending for a race event in order to push for a more savings consciousness.
I’ve shared in my blog late last year that one of the things that I have been trying to work on is settling debts. Yes, I am still in closing one more credit card and I will just be maintaining one for real emergencies. Other than that, I have also discouraged friends who do not have credit cards that if they do not have significant financial savings, it is mute and academic to even bother getting a credit card as it will just fuel one’s appetite to CHARGE IT! And at the end of the day, that is no way to be financially independent either.
True financial independence starts with sound financial planning. In my case, I am learning the hard way. For instance, as much as I would like to register to race events week after week after week, I know that this is not as sound as it seems. For those who have nothing else to do with their time and resources, then by all means continue to support all the races! But if there is one race that I would encourage you to support, help support this event. Jose Rizal mentioned that the future of this nation is with the youth. If that is true, what future does our youth have if they are not armed with the necessary skills to live life fully as productive citizens? So on July 22, come join the BMAP Bank Fun Run! It’s more than just a fun run event. It’s running for savings consciousness.