Friday, May 24, 2024

9 Reasons Why Many Filipinos Fail to Save for the Future

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Whether they work overseas or are based in the Philippines, it seems that saving up for the future is a monumental task for many Filipinos.

It’s easy to trace the high cost of living abroad, immediately sending their earnings back home, or OFWs mired in debt used to pay for placement fees, as among the culprits why Filipinos abroad cannot allocate part of their income towards their savings accounts.

There are several reasons why Filipinos may be unable to save money, including the following:

Low income

Many Filipinos earn a low income and struggle to make ends meet, leaving little room for saving.

According to the Philippine Statistics Authority, as of the first half of 2020, around 21.9% of Filipinos lived below the poverty line.

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There are several causes of poverty in the Philippines.

  1. Low levels of education: Many Filipinos, especially in rural areas, lack access to quality education, which limits their job opportunities and income potential.
  2. High unemployment: The Philippines has a high unemployment rate, which means that many people do not have regular, stable sources of income.
  3. Corruption: Corruption in the government and in business has led to the misallocation of resources and has prevented the effective use of public funds for poverty reduction programs.
  4. Inequality: Wealth and income inequality is a significant issue in the Philippines, with a large portion of the population living in poverty while a small number of individuals control a disproportionate amount of wealth.
  5. Natural disasters: The Philippines is located in an area that is prone to natural disasters such as typhoons and earthquakes, which can have a devastating impact on the country’s economy and people’s livelihoods.
  6. Lack of access to basic services: Many Filipinos, particularly those in rural areas, lack access to basic services such as health care, clean water, and sanitation, which can contribute to poverty.

High cost of living

The cost of living in the Philippines is high, particularly in urban areas, making it difficult for many Filipinos to save money.

The cost of living in the Philippines is generally lower compared to many other countries. For example, it is lower than in countries like the United States, Canada, Australia, and many European countries. The average cost of living in the Philippines is around 50-70% lower than in the US, with the cost of housing, food, and transportation being particularly low.

High levels of debt

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Many Filipinos have high levels of debt, such as loans for education, housing, or consumer goods, which makes it difficult for them to save money.

Part of the money is owed to banks or other lending institutions — legal or not — to finance a small business, send children to school, or spend on emergency medical attention. They end up in debt, and thus unable to save money.

Lack of financial literacy

Many Filipinos lack financial literacy and do not have the knowledge or skills to effectively manage their money and save for the future. There are so many examples that manifest Filipinos’ apparent lack of fiscal management.

  1. Overreliance on loans and credit: Many Filipinos do not have a strong understanding of how to manage debt and often turn to loans and credit as a way to make ends meet, which can lead to a cycle of debt and financial stress.
  2. Lack of savings: Many Filipinos do not prioritize saving and do not understand the importance of having an emergency fund.
  3. Poor investment decisions: Without a strong understanding of investment, many Filipinos may make poor investment decisions, such as putting all of their money into one high-risk investment or not diversifying their investments.
  4. Misuse of credit cards: Without a good understanding of how credit cards work, many Filipinos may overspend and end up with high levels of credit card debt.
  5. Lack of financial planning: Many Filipinos do not have a financial plan in place and do not understand the importance of planning for the future, including retirement.

Culture of instant gratification

The culture of instant gratification is prevalent in the Philippines, where many people prioritize immediate needs and wants over saving for the future.

Here are a few examples of instant gratification we usually observe in the Philippines:

  1. Impulsive buying: Many Filipinos may engage in impulsive buying, such as making impulsive purchases of clothing, gadgets, or other items they don’t necessarily need.
  2. Use of quick cash loans: Many Filipinos may turn to quick cash loans or payday loans when they need money right away, even if it means paying high-interest rates.
  3. Eating fast food: Fast food is popular in the Philippines and is often seen as an easy and convenient way to satisfy hunger quickly.
  4. Gambling: Gambling, such as playing the lottery or betting on sports, can provide a quick source of excitement and the chance for a quick payout.
  5. Online shopping: The rise of online shopping has made it easier for Filipinos to make purchases quickly and have them delivered to their doorstep.


Inflation in the Philippines is often high which decreases the value of money over time, making it difficult to save money.

The inflation rate in the Philippines in 2022 at 5.8% had a significant impact on the country and its economy. Higher inflation rates can lead to increased costs of goods and services, reducing purchasing power and the standard of living for many Filipinos.

It can also lead to higher interest rates, making it more expensive for businesses to borrow money and invest in growth, which can slow down economic activity. The Philippine government and central bank implemented various measures to address inflation, such as adjusting monetary policies and implementing price controls, but the impact of inflation on the country and its people remains a concern.


Unexpected events such as emergencies, illnesses, or accidents can force individuals to use their savings, leaving them with little or no savings at all.

No financial goals

Some Filipinos may not have clear financial goals, which makes it difficult for them to save money as they don’t know what for or how much to save.

Social pressure

Some Filipinos just bow down to pressure from peers, and cannot help but spend beyond their means. Such a lifestyle is one of the ugly habits Pinoys need to ditch.

There is that social pressure in the Philippines to keep up with the Joneses, which can lead to overspending and a lack of savings. Sometimes, the so-called “social climbers” attempt to reach the level of well-off peers, at the expense of their own financial stability, in their effort to maintain that social stature.

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