Philippine Financial Industry - has it changed at all?

Earlier, I made a blog about the revolutionary changes we experienced in various industries. But in the Philippine financial industry, has anything changed at all?

Before, less than 1 % of the Filipinos invested in mutual funds and stocks. STILL now, less than 1 % of the Filipinos invest in mutual funds and stocks... Everything is changing around, EXCEPT the financial industry. There is nothing in the financial industry that evolved to provide financial solutions for today. So what’s the consequence? Here is what I learned from an expert in the field:

1. Before, with a little hard work and careful budgeting most families could realize their dreams. Some could send their kids to college and retire in relative comfort. Now, families can hardly make their dreams come true.

2. Before a parent could raise ten children. Only the father works. Now ten children cannot raise a parent.

3. Before only the father works. Now both parents work, yet they can hardly raise two to three children.

4. Before, people with job and degree save only in traditional savings facility. When you have a job, and you have a degree, you are guaranteed results. But now, doctors, engineers, managers, who are still saving in traditional savings facility, enroll in nursing!

5. Inflation and increase in cost of living make most families have difficulties in saving money for their future needs. When the needs arise (like illness, education, emergencies), the only option for Filipinos is debt. So debt becomes the solution. A lot of people are then caught in a debt trap. They are burdened with high interest-rate debt.

So now that the world has changed immensely, we definitely should also change our solutions. We can no longer use the solutions used by our parents and grandparents. Our solutions should be adaptable for today’s situation. Now, with the present job and business security situation, we are seeing more mergers, acquisitions, outsourcing, business failures, lay-offs, and replacements. We see families financially starving.

· No. 1 cause of family feud in the country is money. Even in the US, 89% of divorce is related to money.
· Families cannot afford to have one spouse stay home with the children.
· Families cannot fund parents’ hospitalization and medical needs.
· A lot of families cannot send their kids to college due to high cost of education.
· Many families have no proper protection for themselves or for their health, and when the breadwinner dies, the family can only provide in less than a year.

· No planning. No healthcare.
· Many families today retire in poverty because their SSS or GSIS pension funds are not enough to beat inflation.

This is the world we live in. Most of us are caught in this world of uncertainty since everything affects us - foot and mouth disease, swine flu, oil prices, gulf war, subprime, economic crisis. We are in the most educated period of time today because of the internet. But at the same time, we are in the most confused, uncertain era. Unless we find a solution to our problem, we are caught in a cycle of financial frustration. In the following years to come, there will be greater changes and a changing world requires changing solutions.

More on the next blog…

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