CEBU, Philippines - The good economic prospects of the Philippines, which will result to increasing income among Filipinos, should be complemented with good and sound financial literacy programs and policies to improve the culture of financial management among Filipinos, a life insurance firm said.
Life insurance leader PhilAm Group has called the attention of the Philippine government to immediately implement programs that will encourage Filipinos to use their money wisely through supporting the different private-led campaigns on financial literacy.
In an interview with PhilAm Life president and chief executive officer (CEO) Rex Mendoza, he said the despite the aggressive move of some financial institutions to teach Filipinos on acquiring wealth through savings and investments, only a few are taking advantage of money investment and savings instruments.
For life insurance, the industry is only penetrating four percent of the total population in the Philippines. Although it grew by 40 percent last year, Mendoza said the rich segment in the society has been continually growing their money and become richer while the average and poor get poorer.
Mendoza, who was in Cebu Thursday to conduct the company’s financial literacy talk before the Cebuanos at the Casino Español, said that there is a need for the Philippine government to provide complementing programs that will change the financial management culture of Filipinos to introduce financial literacy to younger generation and incorporate financial literacy teachings to primary schools.
Although the Philippines has already an existing law, the Personal Equity Requirement Account (PERA), the IRR (implementing rules and regulation) still has to be drafted.
Aside from incorporating financial literacy to primary and secondary schools, the government should also give incentives to individuals investing in the proper investment channels, such as tax perks, among others.
In the Philippines, only four percent of the population is into investing, such as in life insurance. Putting the mandatory insurance of the Government Social Insurance System (GSIS) and Social Security System (SSS), only 14 percent of Filipinos are insured.
The PhilAm Life’s consolidated premium income, including the BPI-PhilAm, a joint venture of PhilAm Life and Bank of the Philippine Islands (BPI) and Philippine Equitable Life Assurance Corporation (PELAC), scored a total premium income of P26.85 billion in 2012 growing by 34 percent.
This premium income is the highest in the industry based on the 2012 official report by the Insurance Commission (IC).
“PhilAm Life remains to be the top life insurer in the Philippines with its agency and bank assurance distribution channels. Future growth will focus on unit-linked protection and savings/investment/products and a good balance between regular and single premium revenues,†Mendoza said. /JMD (FREEMAN)