Majority of Filipinos are planning to set aside more for their savings, as uncertainties caused by the coronavirus disease 2019 (COVID-19) pandemic crisis are driving a significant shift in household savings, a recent survey showed.
AIA Group Limited, the parent company of AIA Philam Life, yesterday announced the results of the Save Smarter Study 2021 which showed that while 45 percent of Filipino respondents said they reduced their savings in 2020, 65 percent said they plan to increase their savings in 2021, with 53 percent planning to increase their savings by up to 50 percent and 12 percent planning an increase of over 50 percent.
The study surveyed 7,400 insurance consumers aged 25 and up across eight Asian markets: Mainland China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
“The pandemic continues to affect many people all over the world and has changed the way we live,” Kelvin Ang, AIA Philam Life chief executive officer, said.
AIA said the study also showed household savings trends and jectives are changing.
The survey showed that preparing for emergency spending (72 percent), guaranteeing financial security in case of misfortune (65 percent) and coverage for medical expenses (62 percent), top the list of savings objectives.
A lower but nonetheless important priority remains saving for typical life goals such as education, getting married, buying a house (50 percent) or retirement (57 percent).
“Although Filipinos seemed to have a more disciplined approach to savings than in the other markets surveyed, meeting such diverse goals through increased household savings is a major challenge,” the company said.
The survey showed at a quarter of the respondents simply save what money they have after expenses without a proactive saving plan and 22 percent put aside a fixed overall amount.
Almost 30 percent list out their savings goals and put aside savings to meet them which is higher than the average of the other markets at 25 percent.
“Despite this savings discipline, the low bank interest environment threatens to depreciate savings with by far the most popular place to save being the bank,” AIA said.
Almost all surveyed or 94 percent prefer the liquidity of bank savings, with 91 percent using demand deposits and a massive 40 percent having no other form of savings at all, the survey results showed.
Meanwhile, the survey showed a stronger interest in insurance, with three quarters of Filipinos agreeing insurance has become more important than ever to provide better protection in case of unexpected incidents, and more than a quarter say they plan to increase their allocation of funds to insurance.
“Of those planning to raise their spending on insurance, 80 percent intend to spend more on life insurance with savings and 60 percent say they plan to spend more on medical and health insurance,” AIA said. – Angela Celis
