Home > Financial Literacy, Migrant Workers, Migration and Development, OFWs > Advocating Financial Literacy to Overseas Filipino Workers (OFWs)

Advocating Financial Literacy to Overseas Filipino Workers (OFWs)

 by Juan “Jed” E. Dayang, Jr.*

During my diplomatic and consular posting at the Philippine Embassy in South Korea,  my interest in personal financial management skills development slowly intensified as my six-year tour of duty was about to end.

Books on wealth management, wealth creation, and making the most of one’s money and resources were some of the staple reading materials I studied.

In my college days, I did well, out of sheer interest, in business, finance, and accounting subjects.  The practical understanding of finances made it easier for me to make informed and effective decisions. My interest in business and finance was reignited when I was tasked to initiate the Financial Literacy Program for Overseas Filipino Workers (OFWs) in South Korea.

One of the most valuable lessons of savings and investments is having a mindset of “paying yourself first.”  It’s a simple trick.  Before spending for anything, set aside a portion for savings. Using principles of compound interest over periods of time, $1 today could be $100 tomorrow. But one has to start saving and investing today.

I also learned from the book “The Millionaire Next Door” by Stanley and Danko that America’s wealthiest were also among the most frugal people.  These wealthy Americans built their riches through simple living. They also  generated assets through active and passive incomes, the latter being generally referred to as “making your money work for you.”

As I educated myself on personal financial management, I also felt the urge to share this newly acquired knowledge to OFWs.  I thought that they would benefit immensely from financial literacy knowledge and money management skills.  They could earn active and passive incomes that could  sustain them and their families financial even when they have decided to return to the Philippines “for good.”

My initial and informal survey of Filipino workers in Seoul to find out about their saving patterns revealed that many of them will return home without savings nor sound investments. I spoke with  Natty (not her real name), who intimated that despite working for five years as a nanny, she has not managed to set-aside her own savings. The reason was that she sent all her earnings back home to help her family and relatives. She also lamented that her hard-earned income were spent on consumer goods and “unnecessary expenses” instead of investments.

The tale of Natty  is not surprising.   The Philippines has one of the lowest savings rates in Asia,  Iestimated at 19-23% of the GDP. Its neighbours Malaysia, Singapore, and Vietnam posted savings rates from to 34-40%  of GDP.  In terms of financial literacy, Filipino scored low according to the latest Citi Financial Quotient (Fin-Q) survey by Citi Bank.   In 2011, the average score was 48.9%, slightly lower than last year’s 49% but higher than 46.6% in 2008 and the 47.8% baseline score in 2007.[1]  In addition, based on a survey cited by Sun Life, “out of 100 Filipinos, 90 percent have little or no savings at all. Out of 100 Filipinos who get sick, 95 percent sacrifice their savings, out of 100 Filipino children, only 10 percent will graduate from college. Out of 100 Filipinos aged 65, 45 percent are dependent on relatives.”[2]  These results show the need for more aggressive financial literacy education programs to help Filipinos attain financial management skills.

In 2008, when Ambassador Luis T. Cruz, thought of initiating a savers’ club in South Korea, I jumped at the opportunity to take the lead in conceiving the FLP for OFWs in South Korea.   With the backing of the Ambassador, I worked with the Overseas Workers Welfare Administration (OWWA), which just launched a “return and reintegration program” for OFWs, and with the Philippine Trade and Investment Centre (PTIC).   OWWA provided funding support and assisted in preparing the training program, while PTIC promoted the “one town-one product” concept to promote OFW investments in their hometowns. With the FLP in motion, the Philippine Embassy in Seoul was the first to implement the financial literacy seminars among Embassies scattered around the globe.

The FLP, which started on March 30, 2008  was introduced to OFWs in Seoul and later to other parts of South Korea. With the help of Filipino community groups,  the Embassy was able to initiate more than a dozen seminars to more than 400 participants in less than a year.  Based on a study conducted by the author using a pre-test, post-test survey[3], the FLP improved the participants’ financial literacy and money management skills. The respondents also showed keen interest in applying their newly acquired knowledge and to share them with their families. The program has demonstrated its relevance, effectiveness and replicability.  For the past three years, the Embassy has been conducting FLPs as well as training in entrepreneurship to OFWs in South Korea.

The objectives of FLP vary from maximizing the potentials of remittances to poverty-alleviation and development in the  Philippines to forming values of thrift to OFWs.   The FLP also provides the government an opportunity to engage with Filipino communities overseas productively.

Financial literacy education to OFWs as well as to other disadvantaged sectors (for example youth and women) is timely as the world is experiencing the global financial crisis.  These days with the recession in the United States and the economic gloom in Europe, we are facing an “increasingly perilous financial world.”[4]  During these uncertain times, it becomes even more imperative to promote financial literacy and learn the value of savings, creating passive income, diversifying investments, planning for the long-term, setting-up an emergency fund or having insurance, and saving for the future by practicing frugality—concepts every individual must be aware of in good economic times or bad, with or without the current financial crunch.

Achieving financial freedom is one of the ways human beings could live a more dignified and fruitful life. By learning personal financial management skills and by sharing it to others even to just one disadvantaged person, we could help eradicate poverty.





*Jed, an advocate of financial literacy to OFWs,  initiated and coordinated the Financial Literacy Program of the Philippine Embassy in Seoul, South Korea in 2008. He made a study on the “Effects of Financial Education to OFWs in Seoul: Evidence from a Survey” supervised by the Political Science Department of the University of Oklahoma in 2009. He has continued his advocacy by conducting seminars on a pro-bono basis and recently started a blog titled “Tips on Saving Time, Money and the Planet” (http://savetimemoneyearth.wordpress.com/).

[1]Doris C. Dumlao, “Filipinos upbeat about financial future,” Philippine Daily Inquirer, June 3 2011.

[2] Patricia Esteves, “To raise Pinoys’ financial literacy is Sun Life’s advocacy ” The Philippine Star, August 15 2011.

[3] See “Effects of Financial Literacy Program to OFWs in Seoul: Evidence from a Survey,” thesis of Juan E. Dayang, Jr., Masters of Public Administration,University of Oklahoma, Norman.

[4] Elizabeth Johnson and Margareth Sherraden, “From Financial Literacy to Financial Capability Among Youth,” Journal of Sociology and Social Welfare 24, no. 3 (2007).

  1. September 19, 2011 at 8:36 am

    Thanks for this very informative and helpful article. Hope your advocacy will help our OFW kababayans to preserve their hard earned income and convert them to a self sustaining, self generating wealth machine so they will not have to be forever dependent on their work which brings them to lands faraway from their loved ones.

  2. September 26, 2011 at 7:28 pm

    Greetings, Mr. Jed. Kudos for implementing an FLP for OFWs in Seoul. You’ve done a great service to our kababayans.

    I am also an advocate of responsible money management and have been teaching ordinary Filipinos about personal finance for several years now through Pinoy Smart Savers Learning Center. Please visit http://www.pinoysmartsavers.com to learn more about the center.

    Many OFWs have been asking me how they can get a copy my book “Kaya Mo, Pinoy! 12 Steps to Build Wealth on Any Income.” Much as I would like to have the book distributed abroad it’s simply too costly. Same with live seminars. So, I’ve been try to find effective, expansive and inexpensive ways to teach OFWs about personal finance. Maybe we can collaborate and implement an FLP model similar to what you used for South Korea.

    Please let me know if this is something you want to pursue with us. By the way you can preview the contents of my book at http://www.pinoysmartsavers.com/kayamopinoy.html and view some clips of my seminars at http://www.pinoysmartsavers.com/pmmcomments.html.

    Thank you and do continue teaching Filipinos about proper money management.

    • September 27, 2011 at 11:08 pm

      Hi Alvin,
      Thanks for your message and kind words. I found the website of Pinoy Smart Savers as a rich source of practical, down-to-earth, and easy to read tips on savings. I think your book would really be valuable for OFWs and their family. Your website is one inexpensive way to promote savings and investments. I would be happy to have a chat with you on how your group could promote it among OFWs through the Embassy and consular networks. I’ll in Australia now but soon I’ll return home. Meantime, let’s keep in touch.



  3. November 29, 2011 at 7:39 pm

    Testing. I seem to be having difficulty leaving a comment.

  4. November 29, 2011 at 7:45 pm

    Hello Jed and Alvin, I was heartened to read your blog and comment respectively. I’m a Filipino-Australian currently living and working in the UAE and am also very concerned about the plight of our kababayans who spend years working overseas with nothing to show for when they return home. I would also be very interested in finding out how I can help our kababayans here in the UAE, even if it’s to give them a photocopy of Alvin’s book, particularly to the women who are in detention centres or women’s shelters. Despite their bad luck, I’m sure many of them will try looking for work again overseas if given a chance. Hopefully, after reading your book, they’ll have a better understanding of how to handle their finances, regardless of whether they stay in the Philippines or go abroad.

  5. November 29, 2011 at 8:01 pm

    I’m wondering if Alvin would be interested in putting his book on free e-b ook sites such as w ww.f ree-eboo ks. net which would not cost our kababayans anything except the printing (most of us knows someone who works in the office so they can probably even print it out for free). We can then onforward the link to all the Filipinos we know. There are a lot of Filipino organizations in the UAE who also try to help our kababayans so they would be a good point to distribute the book or any information you have.

    • November 30, 2011 at 4:09 am

      I think having Alvin’s book for free online would be great! Well,he can still sell the print copies. 🙂

  6. November 29, 2011 at 8:04 pm

    I think financial literacy should be taught at school, even if it’s 1 or 2 lessons within Social Studies, so that the germ of knowledge would be planted in young minds and equip them for when they face the real world.

  7. November 30, 2011 at 9:48 pm

    I’ve just found out about this fantastic organisation called aidha – the world’s micro-business school which helps educate the masses of migrant workers. The school offers management and entrepreneurship training, financial education, and marketing and communication classes. All of the training is aimed at alleviating poverty by giving students the skills to save money, spend astutely and develop business skills to succeed in a career. Check out http://ww w.aidha.o rg/about/

  1. September 7, 2011 at 12:51 pm
  2. September 17, 2011 at 1:09 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: