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Migrant Workers Profit from Financial Literacy, Research Shows

September 7, 2011 6 comments

Click for Pdf copy: Effects of Financial Literacy Among OFWs in Seoul

Effects of Financial Education among Overseas Filipino Workers (OFWs) in Seoul, Korea:

Evidence from a Survey 

Juan “Jed” E. Dayang, Jr.

(Supervised by the University of Oklahoma)

A survey conducted by the Philippine Embassy in South Korea in 2008 showed that financial education plays a very important role in increasing the financial literacy of overseas Filipino migrant workers and encouraging specific behaviours among them.

The study aimed at evaluating the effectiveness of the Embassy’s Financial Literacy Program (FLP) demonstrated that the scores of participants improved by 47% after attending a two-hour seminar, from an average score of 3.06 to 4.5 out of a possible perfect score of 7.  See Figure 1.  At the same time, most of the participants expressed interest in initiating some form of personal financial planning and persuading their families back in the Philippines to adopt the same method.

The Financial Literacy Program (FLP) was specially designed to address the unique circumstances of Filipino migrant workers in Korea and the savings culture among Filipinos. (Please see related blog articles .)  

The Survey

The Embassy administered a survey composed of standard open and close-ended questions  to participants before and after the seminar. The pretest survey was divided into three main sections: the first part examined the participant’s general behaviour or attitude regarding financial planning; the second part tested the participant’s knowledge about financial concepts, while the last one focused on demographic information.

Behaviours promoted in the campaign were: setting short and long-term financial goals; saving money regularly; making a written budget for expenses; comparing actual expenses to the budget; paying bills on time; reviewing bills for accuracy; and comparison-shopping before making purchases. The seven questions in the second part highlighted key concepts in financial planning, namely budgets, savings, compound interest, inflation rate, risk, liquidity and insurance. The post-test, meanwhile, explored changes in the participants’ behaviour and knowledge using the same indicators.

The Respondents

More than 200 participants volunteered to take part in the survey. Forty-eight respondents successfully completed the forms, which the researcher used as the sample size of the population.    Majority of the respondents were between 26 to 35 years old, are married with children, have a college degree, earn between US$1,000 and US$1,500 per month, and have been in Korea for less than three years. Of the total respondents, 27 were men and 21 were women.

The Results

Figure 2 shows that, as a result of the seminar, respondents agreed on the need to adopt the program’s intended behaviours. The program appeared to be most effective in promoting the importance of budgets and of regularly saving. (Respondents who were undecided or who have already been practicing the intended behaviours get a score of “0”). Respondents were also asked when they intend to practice what they learned the seminar.


Figure 2.
As a result of the program, participants
believe that they should:
Average Score
Rank
Short- and Long-Term Financial Goals
1
5
Save Money Regularly
1.19
2
Make a Written Budget for My Expenses
1.33
1
Compare My Actual Expenses to My Budget
1.17
3
Pay My Bills on Time
0.9
7
Review My Bills For Accuracy
0.92
6
Comparison-shop Before Making Purchases       
1.02
4
Average
1.07
Scoring:

(2)  Strongly Agree
(1)  Agree
(0)  Undecided /Already Doing This
(-1)  Disagree
(-2)  Strongly Disagree


Figure 3 shows the urgency with which the respondents regard the changes. Respondents stated that they will begin using budgets within the following month. Comparing actual expenses to the budget, among the top attitudes which respondents also agreed was necessary, also scored high.

Figure 3.
As a result of the program, the participants will implement their learning:
Average Score
Rank
Short- and Long-Term Financial Goals
2.73
3
Save Money Regularly
2.71
4
Make a Written Budget for My Expenses
3.04
1
Compare My Actual Expenses to My Budget
2.79
2
Pay My Bills on Time
2.48
6
Review My Bills For Accuracy
2.33
7
Comparison-shop Before Making Purchases       
2.69
5
Average
2.68
Scoring:
(4)     This Month
(3)     Next Month
(2)     In 2 to 3 Months
(1)     In 6 months
(0)     Will not Do/Already doing this

The Embassy considered the willingness of the participants to share their learning with their family as an important indicator of the success of the program, since migrant workers tend to send all remittances to their families back home. The families, therefore, have direct control over the finances.  See Figure 4.

Figure 4.
As a result of the program, participants believe that they should share and encourage their families to adopt the following behaviours:
Average Score
Rank
Short- and Long-Term Financial Goals
1.23
2
Save Money Regularly
1.35
1
Make a Written Budget for My Expenses
1.13
5
Compare My Actual Expenses to My Budget
1.19
3
Pay My Bills on Time
0.02
7
Review My Bills For Accuracy
0.06
6
Comparison-shop Before Making Purchases       
1.15
4
Average
1.07
Scoring:

(2)  Strongly Agree
(1)  Agree
(0)  Undecided /Already Doing This
(-1)  Disagree
(-2)  Strongly Disagree

In this regard, the seminar convinced the respondents to encourage their families to adopt the intended behaviours, particularly in saving, setting short- and long-term financial goals, and comparing actual expenses to the budget.

Based on the results of the basic financial literacy test, respondents became more knowledgeable about basic financial management concepts. Figure 1 shows that the modal score increased from 3 to 6 out of a possible perfect score of 7. From an average of 43.75%, performance increased to 64.29%. See Figure 5.

This is clearly evident in Figure 6, which shows that the bulk of respondents scored low before the seminar but reversed the trend after. Most respondents have a college degree; the seminar therefore helped in at least reminding the respondents of concepts they learned in high school and college.

Figure 7 looks at the scores in detail. Prior to the seminar, the weakest area was in liquidity test and only 18.75% of the respondents got the correct answer. Insurance, the weakest area after the seminar, was at 45.83%. Respondents displayed consistent strength in the areas of compound interest, saving and budgeting. The greatest improvement was in liquidity score, which doubled from 18.75% to 50%.

Respondents rated the overall program between “helpful” and “very helpful.”  The instructor received the top score with 1.70, followed by content at 1.67 out of the maximum score of 2.

Conclusion  

The survey showed that financial education is effective in increasing the knowledge base of migrant workers and encouraging specific behaviours. It may be noted that although certain scores or behaviours rank lower than others, the overall impact was positive. The next research stage is to follow-up from the same respondents whether they actually changed their behaviours and what actions they did to improve their financial status. The longitudinal study can be done by getting the same respondents around six months or beyond from the program and monitoring their progress. Currently, the Philippine Embassy which started the program in 2008 have monitored the progress of the respondents through personal interviews recorded on video. The seminars laid the foundation; future programs will build on the consciousness raised by the financial literacy campaign. The survey also provided invaluable feedback which gave the Embassy an idea which concepts or behaviors needed more focus—for instance, respondents do not seem to be persuaded of the need to convince their families to pay bills on time—and, through the written assessments of the respondents, revealed the inclination of participants in terms of current difficulties and future projects.

Note:  Prof. Aimee Franklin, Director of the Public Administration Program, Department of Political Science of the University of Oklahoma supervised the study as part of the author’s Masters of Public Administration (MPA) degree research paper in 2009. Initial results of the survey were published by the Embassy News (2008).  He acknowledges the assistance of  Consul Arnel Talisayon and the support of the Philippine Ambassador Luis Cruz in conducting the survey.  He also thanks  Labor Attaché Delmer Cruz , Welfare Officer Esperanza Cobarrubias and Commercial Counselor Edgardo Garcia for their support of the FLP. The study may be reproduced and circulated with citations. A copy of the MPA paper may viewed upon request.

Canberra: Australia’s Caring and Sharing City

by Juan  “Jed” E.   Dayang, Jr.

The new parliament house in Canberra.

The new parliament house in Canberra.

Canberra, Australia’s capital city,  is an ideal place for learning. It has a world-class university, boasts of renowned research  centres and policy think-thanks, and provides access to national government agencies.

As an intern, I had the opportunity to observe up-close how Skilled and Business Migration (SBM) of the Australian Capital Territory (ACT) promotes skilled migration, assists in the processing of applicants, and takes great care in assisting new migrants settle and start an exciting new life in Canberra.

The SBM, headed by Julianne with her teammates Michele, Pat and Parveen, has set up the Canberra Settlement Service (CSS) with the Migrant and Refugee Settlement Service (MARSS). Andrew, the CSS project officer, is an amazing gentleman who takes care of the needs of clients in a professional and sympathetic manner.

Looking for a job can be daunting for those who are new to the Australian job market. No worries, the CSS assists in the job preparedness of skilled migrants within six months after arriving in Australia. The program includes cultural awareness information and training sessions and “Job Ready” seminars where clients can meet and talk with experts in job preparation and the employment  sector.

Axis from the Australian War Memorial to Parli...

Canberra

A Colombian migrant recently landed a job in the Federal Department of Sustainability, Environment, Water, Population and Communities. She thanks CSS for helping her write her CV, respond to selection criteria and assigning her a mentor to help her understand the labour market and gave her relevant
information relating to the job hunting process. She now offers to share her experience with new skilled migrants who are undergoing the same challenges she went through.

What is exciting about the program is that clients have themselves become settlement volunteers. They create a community of helping hands for mutual support by building social networks.

Indeed, Canberra is a caring and sharing city.

Note:  This article first appeared on Settlement Newsletter.    See  http://www.business.act.gov.au/__data/assets/pdf_file/0003/226677/SBM_Newsletter_MAY_2011a.pdf)

Graduate Institute of Peace Studies: Training Peace Oriented Leaders

Graduate Institute of Peace Studies: Training Peace Oriented Leaders

by Juan  “Jed” E. Dayang, Jr.

(Revised for this blog)

I attended the Graduate Institute of Peace Studies (GIP), Kyung Hee University from fall 1993 to spring 1996 as a Masters in Business Administration (MBA) student.  Before applying to GIP, I also considered applying to several universities in the United States and Europe for my post-graduate studies.

Apart from the full-scholarship, I was impressed by the vision of its founder Chancellor Choue-young Seek  to develop peace-oriented leaders through  holistic education.  In the early 1990s, the academic debate centred on the so-called “paradigm shift”  in the post-Cold War era. Choue predicted that the world will move towards the Pacific Century.

Therefore, in preparation for this eventuality, the region will need leaders who would champion the creation of an integrated global  society, under the spirit of oughtopia,  a society of ought-to be. The idea stems from his desire to reconstruct human society by the integration of material and spiritual needs of human beings. The action plan was to seek and develop leaders who will  pioneer this vision. Personally, I shared his belief that society should reject the deduction of man as purely material but consider the ethical and spiritual dimensions and well-being of humans.

GIP offered a high-level academic program steeped in theory and practice. It was highly regarded in  peace and security  and human welfare studies internationally.   What was unique about the graduate program was its strong leadership training component through co-curricular activities.

I was amazed at how the honour system for students worked in guiding our action based on mutual trust, respect and self-regulation. While at GIP, I joined various student activities.  I was editor of the Peace Forum academic journal  on my 2nd semester. I also learned  about Korean language and culture from a senior student who also gave us lessons in Buddhist meditation.  Although a Catholic, I also joined the protestant bible study group.   For sports,  we took Komdo  oriental swordsmanship and had regular mountain climbing events.

The  academic rigor and the structured life in GIP instilled in me  life skills such as hard work, discipline,order, and courtesy.  A typical day at GIP includes getting up at 5:45 in the morning, doing meditation, jogging and working on assigned cleaning duties before breakfast.   Life was communal. We all have three meals together and many community activities are done in groups. Individualism was not an accepted norm.

The teaching method at GIP was socratic.  We also  had to wear business attire (coat and tie for men) when attending classes.  The dormitory life was structed  in a way that we have time for studies, co-curricular activities and sports.  The holistic education  was geared towards the development of the intellect, spiritual growth, and physical well-being.

On my third semester, I was elected as President of the Student Body.  At a young age of 22, it was both exciting and challenging to lead a more experienced and more senior fellow students.  As the first international student to hold such position, my platform of government was centred on making the student body more international.

During my term of office, GIP co-organized the Seoul International Model United Nations (SIMUN) with the United Nations Association-USA. It was such a great opportunity for all of us to develop our leadership and communication skills.  In preparation for the conference, where I played the role of the Security Council President, I proposed the use of English during meal times and started the translation of the GIP creed from Korean to English among students. We also changed all the room name plates to English and adopted parliamentary procedures in the monthly student body meetings.  Such experience offered me the opportunity to test my leadership skills in an international setting and I thank the students and staff for their trust and support during my term of office.

GIP’s  internship  requirement was an opportunity for us to test and apply our skills in the real world. I was fortunate to do my  placement at the Forum of Democratic Leaders in the Asia-Pacific (FDL-AP) organized by opposition leader Kim Dae-jung, who later became South Korea’s president and Nobel laureate.  The 3-month  internship gave me the opportunity to meet and assist Asian leaders such as former Indonesian Presidents Gus Dur and Megawati Sukarnoputri.

When  I returned to the Philippines in 1996,  FDL-AP appointed me as their liaison officer  and spokersperson in Manila. One on my functions was to  coordinate with the FDL-AP leaders in the Philippines led by  former President Corazon Aquino and fomer Foreign Secretary Raul Manglapus.  FDL-AP’s   advocacy was to promote democracy in Burma.

In 1996, I founded the Youth for Asia-Pacific Cooperation (YAPC) and organised the Youth Forum on the Asia-Pacific Economic Cooperation (APEC) attended by President Fidel V. Ramos as guest of honor and speaker.  I became very active in student and youth organisations. At same time, inspired by GIP’s  strong emphasis on  the importance of scholarly and academic study,   I worked as assistant professorial lecturer at De La Salle University in Manila and was a research fellow of the Yuchengco Center for East Asian Studies  from 1996 to 1999.

Politics was also an area of interest.  In 1998, I organized the Alliance for Youth Solidarity (AYOS), an aggrupation of three youth organizations, and participated in the first party-list elections.  Although AYOS was proclaimed to a seat in the House of Representatives, we were not able to claim our seat in Congress.  Such setback did not deter me from pursuing my other dream to become a diplomat.

In 1999, I was fortunate to be one of the 25  people (out of  about 2,000 who initially  took the exams) who passed the rigorous national Foreign Service Officers’ examination.     In 2000, I was appointed as principal assistant then  briefly as acting director of the Northeast Asian Division  of the Office of Asian and Pacific Affairs where I took care of the Japan and Korean desk.

In 2002, I was assigned as Vice Consul and Third Secretary by President Gloria Arroyo to the Philippine Embassy in Seoul, South Korea.  I was fortunate because my work as a diplomat became easier because of my Korean language background and access to  to the leaders and supporters of President Kim Dae-jung. The strong GIP alumni network in media, government, NGOs, and business circles made my work in Seoul more effective and meaningful.

In 2005,  I enrolled in the Masters of Public Administration (MPA) evening program by University of Oklahoma at the U.S. Military Base in Seoul (across from the Philippine Embassy).   My courses had immediate relevance to my professional work.  I came up with projects such as the review of the Crisis Management Manual of the Embassy, streamlining the administrative and financial process of the office, and conducted staff training on emergency preparedness.

In 2008, I organized the Financial Literacy Campaign program for Overseas Filipino Workers (OFW) in Korea  together with the Labor Attaché, Trade Counselor and the full-support of the Philippine Ambassador. Our aim was to promote savings and investments and to prepare Filipino migrant workers in their return and reintegration back  home.   I submitted  a research paper to the University of Oklahoma on the “Effects of  Financial Literacy Program on Overseas Filipino Workers in Seoul.”

In December 2009, I returned to the Department of Foreign Affairs in Manila and was appointed as Special Assistant to the  Undersecretary for Migrant Workers Affairs.   My work consisted of migration and development policy coordination, anti-human trafficking, assistance to nationals, and special concerns. I also coordinated the publication of a coffee-table book  for the 2nd Global Forum on Migration and Development (GFMD)  and two Reports to Congress .

In 2010,  I embarked on a Doctoral research on migrant workers’ protection in the Asia-Pacific College of Diplomacy at The   Australian National University under the Australian Leadership Award (ALA) grant.

I consider my years spent in GIP as a starting point in my leadership journey. GIP not only provided me with the opportunity to develop my academic and leadership skill but also in crafting my vision  of action for a better future for my country and people. I hope that many students and peace advocates could avail of the GIP program, if it is chosen as one of the Rotary Center for International Studies in Peace and Conflict Resolution.

Note:

Prof. Hong Ki-joon of the Graduate Institute of Peace Studies (GIP) of Kyung Hee University asked me if I could write a testimonial  for the school. Prof. Hong, who is also an alumnus, was collecting documents for  the institute’s proposal to host the Rotary Club’s Center for International Studies in Peace and Conflict Resolution. Without hesitation, I agreed.  My immediate response was prompted by  two reasons: first, by a sense of gratitude to GIP , which sponsored my studies for two and one half years under a full-scholarship grant, and  second, by a profound sense of community spirit among fellow GIPians.

I think much of what I have become  today is due to my experience at GIP. I learned a lot and made lasting relationships with my Korean seniors and juniors as well as the faculty and staff. Some Filipino alumni such as Prof. Pedro Bernaldez and my fellow student Lisa Mercado-Gascon remain my best friends.

I have to admit that living in Korea in the early 90s was challenging for international students.  South Korea’s circumstance and the cultural context prevailing at that time,  shaped our student life at GIP and living in Korea.

____________________________________________________________________________________

From Student to Diplomat: Reflection on my First Year in South Korea

by Juan “Jed” E. Dayang, Jr.*

I came to Korea for the first time on a windy autumn afternoon in 1993. I was full of hope, knowing that living in another Asian country and pursuing graduate school would open up new experiences for me, since I was more accustomed to western culture. The Philippines, after all, was a Spanish and American colony in the past.

I was in summer school in California when I learned about the prospects of studying in Korea.  My father encouraged me to apply to the Graduate Institute of Peace Studies (GIP) of the Kyung Hee University after having a chat with Professor Pedro Bernaldez,  a Filipino from the GIP program, during one of the functions related to the State Visit of former President Fidel V. Ramos toSouth Koreain 1993.

Prof. Bernaldez, the international relations coordinator, sent me a brochure about the GIP which promised to train future leaders in the Asia-Pacific. It also described the GIP campus as being “nestled on a pine forest (next to Kwangneung Arboretum) near a meandering brook”. The description evoked a sense of mystery and adventure. Being interested in leadership issues, I was fascinated with the program.

I initially had a very vague knowledge of Korea. I only knew two things:Seoul’s successful hosting of the 1988 Olympics and South Korea’s production  of quality Reeboks rubber shoes popular in the late 1980s.  When we landed at the Kimpo airport inSeoul, I couldn’t help but notice the massive concrete infrastructures including the roads, bridges, and ubiquitous apartment complexes in the capital city.  I was dismayed by the lack of trees in Seoul.  However, as we were going through the city, I was delighted to see that modern infrastructures blended well with traditional palaces and temples.KyungHeeUniversity was also very green but since it was autumn, my eyes instead feasted on the changing colours of the season.

My stay in South Korea turned out to be life-changing. Apart from earning an Masters of Business Administration degree, the opportunities that a Korean education offered were immense. For example, the focus of South Korea on globalization helped me develop skills and awareness of international concerns as when I completed an internship with the Forum of Democratic Leaders in the Asia Pacific under Dr. Kim Dae-Jung. Moreover, I felt very close with the South Korean people and eventually became accustomed to their culture, from the rituals of drinking sessions to the hard work that everyone displays whether in school or at work.

Frankly speaking, however, my two and a half years living in Korea as a student, from 1993 to 1996, were not always a bed of roses. Adjusting to a foreign culture, with a different language and social constructions, takes time and requires an open mind. However, I view those difficult and challenging times to be part of my journey and experience in living overseas.

In 2006, I returned toManila to pursue a career that brought me to stints in the academe, non-governmental organisations, electoral politics, and eventually diplomacy.  The direction I had taken could be directly linked to my exposure in South Korea. Despite my return to the Philippines, I found myself visiting Korea each year from 1996 to 2001, except in 1998 when I led the party-list group Alliance for Youth Solidarity in a national election. Korea had really left a lasting imprint on me.

My relationship with Korea and the Korean people is deep and lasting.  It is a friendship built on constantly expanding one’s horizon and being open to foreign cultures and traditions. In the end, I realized that  to know Korea is to eventually fall in love with Korea. To me, the virtue of friendship is that it looks after the welfare and anticipates the  needs  of the other.South Korea offered me much, and I myself would like to think that I was able to contribute in any small way to South Korea through my interactions with friends and colleagues.

In November 2002, I returned to Korea – this time as a diplomat of my country. My colleagues in the Foreign Service told me that I was returning to my second home. As a diplomat stationed in Korea, my role was to help build bridges of friendship between our two nations.  My previous experience as a student and intern proved significant in navigating the challenges of a foreign posting.

I took part in the Philippine-Korean Friendship Day, an occasion attended by Filipino expatriates in Korea. The event was also attended by former Korean Ambassadors who were assigned to the Philippines. Many of them had retired from the Korean Foreign Service. It was a time for merry-making and renewing old ties. In the event, the Philippine Ambassador spoke of our two nations having a long history of friendship and that this friendship was born and nurtured during the darkest years of the Korean War. Strengthened by our shared commitment to democracy and freedom and respect for human dignity, our relationship has become stronger and more vibrant more than half a century later.

Most significantly, it is through people-to-people exchanges that our relationship has become more dynamic. Many South Koreans live, study or tour in the Philippines while many Filipinos have, like me, found a second home in South Korea. These human interactions, I believe, represent the special ties that bind our two nations together.

It has been ten years since I first stepped foot on Korean soil as a student. I look forward to the next several years of continuing friendship with Korea and its people as I continue my diplomatic career.

Note: this article is an edited version of “Philippine-Korean friendship: An enduring relation”  originally published on UpKorea.net on 15 December 2003.  

*At that time, the author was 3rd secretary and vice consul of the Philippine Embassy in Seoul.  He was asked by fellow GIP alumnus Lee Byung-chul to write a piece in haste.  If he had to write this piece again, ten years after in 2013, he would have a lighter and more jovial take on his experiences.

 

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