Millennials are most financially literate generation of Filipinos, but many lack a plan of action
- Millennials in the Philippines emerge as most confident in meeting long-term financial goals
- High confidence across all generations but 59% have no financial plan beyond one year
- Only 21% of respondents seek professional help or advice in managing their finances
Sun Life Asia has introduced its inaugural “Sun Life Asia Financial Resilience Index,” a comprehensive study delving into the financial behaviors and beliefs of individuals across eight markets in the region. The index sheds light on the challenges hindering the establishment of long-term financial security. Notably, the study reveals that while Filipino millennials exhibit the highest levels of financial resilience, a considerable number still lack a concrete action plan, a crucial aspect of financial resilience.
Conducted through a survey involving 8,000 participants across the Philippines, Malaysia, Singapore, mainland China, Hong Kong SAR, India, Indonesia, and Vietnam, the Sun Life Asia Financial Resilience Index uncovers several key findings:
Millennials are the most resilient generation
According to a survey conducted among 1,000 individuals in the Philippines, millennials emerge as the most financially resilient generation. Compared to their Baby Boomer counterparts (71%) and Gen Z peers (71%), millennials exhibit greater optimism about their financial futures, matching the level of confidence seen in their Gen X counterparts (80%). They demonstrate a penchant for making financial decisions based on thorough research, surpassing older generations in this regard (50% vs. 46%). Additionally, they express higher confidence in their ability to achieve long-term financial goals compared to older cohorts (68% vs. 60%). However, a concerning finding reveals that only 41% of millennials have a financial plan extending beyond a year, potentially jeopardizing their aspirations.
“Filipino millennials stand out in our research as the most financially resilient generation,” remarked Carla Gonzalez-Chong, Chief Client Experience and Marketing Officer of Sun Life Philippines. “Leveraging their tech-savvy nature, millennials possess a wealth of resources for financial planning and are inclined to base decisions on thorough research. Nevertheless, the study underscores a troubling trend: many lack a comprehensive long-term financial strategy to realize their life goals. Establishing a well-defined plan should be a priority for those seeking to safeguard their financial future, particularly in today’s rapidly evolving investment landscape.”
Confidence outstrips preparedness
The Index reveals a common trend across Asia where confidence surpasses preparedness concerning long-term financial goals. In the Philippines, 65% of respondents express confidence in meeting their long-term financial objectives, compared to the 69% average across Asia. However, only 41% of Filipinos have a financial plan extending beyond one year, in contrast to the 40% average across Asia. Notably, retirement and savings rank as the second highest financial priority for Filipinos, yet merely 14% currently possess a retirement or pension plan to support these aspirations.
“The Sun Life Financial Resilience Index offers valuable insights into how households across Asia are addressing their financial objectives and safeguarding their futures. It’s heartening to see many Filipinos feeling optimistic about their financial prospects in 2024, and this optimism warrants a concrete plan to transform it into reality. A well-structured financial plan offers straightforward, actionable steps toward achieving both wealth and health goals,” remarked Gonzalez-Chong.
The role of trust, emotion in financial resilience
More than half of Filipino respondents (51%) highlighted the significance of emotion and trust in guiding their financial decisions. Financial institutions emerged as the most trusted sources of financial information, closely followed by family and friends. Although social media serves as a prevalent avenue for financial advice (42%), trust in its reliability remains low (13%). Despite half of the respondents expressing a desire to enhance their understanding of personal finance, a considerable portion may hesitate to seek assistance, as only 21% currently seek professional help or advice in managing their finances.
Wealth is not a guarantee of financial resilience
The survey reveals that even among the wealthiest respondents in the Philippines, there is a notable lack of preparedness and an underestimation of expenditure levels or the advantages of a long-term financial plan. Surprisingly, high-income respondents are more prone to exceeding their monthly budgets (28%) compared to those with lower incomes (24%). Additionally, they exhibit less confidence in managing their finances to achieve long-term goals compared to lower-income groups (69% vs. 75%).
For further insights into the Philippines findings of the Sun Life Asia Financial Resilience Index, visit: https://sunlife.co/financial-resilience-report-PH
Conducted to comprehend how individuals strategize for and overcome unexpected high-impact financial events, the Sun Life Asia Financial Resilience Index evaluates financial resilience across five core pillars: confidence, behavior, planning, tools, and resources. The study, based on a double-blind survey conducted in October 2023, encompassed 8,000 individuals (1,000 per market) across eight markets: Indonesia, mainland China, Hong Kong SAR, India, Malaysia, Singapore, the Philippines, and Vietnam.
