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Chapter 1

Introduction

Background of the Study

The investment growth in the Philippines is slowly increasing as the

result of different investments that had become on-trend these days. According

to van Rooij, Lusardi, and Alessie (2007), due to the progressively active

investment services and products, the people have also improved their

participation in investments or the stock market. This could be connected in the

Philippines, wherein the number of accounts in the Philippine Stock Exchange,

which was 1,089,443 accounts in 2018, broke past 868,810 reports in 2017,

which was higher by 25.4% (Rivas, 2019). It could be concluded that

investment participation in 2018 has increased.

The reason that could answer the increasing participation is financial

literacy. Aren and Aydemir (2014) defined financial literacy as something that

is becoming important every day. Particularly in financial decisions where

financial knowledge is a must. People encounter the financial and economic

domains in times of financial dilemmas, and being financially literate could

solve it. Because of this, individuals have become functional and accountable

when it comes to their finances.

However, even though there was an improvement in investment

participation, there are still some who lack knowledge when it comes to

finances or people who are financially illiterate. Thus, the Philippines' economy

was on the verge of endangering due to the new investment schemes that

spread all over the country. With this, the agricultural sector was in chaos
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because of the farmers who went all out and sold their properties and animals

they own just to invest in these so-called investments. It may be right to those

farmers since they can gain from those investments, but ultimately it will

negatively affect the economy. The Philippines is known as an agricultural

country. However, if the agriculture itself is dying, then the economy will die out

too (De Guzman, 2018). According to Bajpai (2019), to make a country's

economy grow, it must achieve balance and harmonious development in

agriculture, industry, and service sectors.

It could also be associated with the problems encountered by Lusardi

(2008) in conducting her study in the United States, wherein it shows that most

people cannot execute necessary calculations in economics and finances, and

were struggling because of the lack of knowledge in the basic concepts of how

to handle or compute money. Thus, being financially illiterate is typical for the

general population.

In conclusion, the formulation of this study is to find out if those

individuals are financially literate and if their participation when it comes to

investments reflects it. Moreover, their financial literacy and investment

participation are needed to find out the level of information when it comes to

finances and investments. The aforementioned problem in the Philippines

clearly shows that financial literacy is a must to avoid such investment schemes

to spread; also, it would lessen financial illiteracy in the future and help those

individuals in their finances. Through this, the researchers aim to provide data

to help future investors become financially literate and be someone who can

deal with their finances right.

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Statement of the Problem

This study is conducted to answer the following questions regarding

financial literacy and investment participation among the employees of the

University of Mindanao. The following are questions to be answered:

1. What is the level of financial literacy per department in terms of:

1.1 financial attitude;

1.2 financial behavior; and

1.3 financial knowledge?

2. What is the level of investment participation per department in:

time horizon; and

risk tolerance?

3. Is there a significant relationship between financial literacy and

investment participation?

4. How would the employees describe their financial literacy and

investment participation?

Hypothesis

This study shall test the hypothesis that there is no significant

relationship between financial literacy and investment participation of the

employees in the University of Mindanao at 0.05 level of significance.

Theoretical and Conceptual Framework

Pragmatic worldview arises out of happenings, circumstances, and

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outcomes rather than in conditions that are antecedent. It is concerned with

application and solutions to problems. Hence, it is utilized in this study to fully

analyzed the problem and create a possible answer. This relate to mixed

methods research in which researchers uses both quantitative and qualitative

results of their research. The researchers will utilize all available approach to

understand the problem (Creswell, 2009).

The three dimensions of financial literacy were proposed by Potrich,

Vieira, and Kirch (2014), in which financial attitude, financial behavior, and

financial knowledge are a multidimensional construct that analyzes financial

literacy, which was recommended by the Organization for Economic

Cooperation and Development. The OECD also defined financial literacy as

cited by Potrich et al. (2014) as an accumulation of knowledge, attitude, skill,

behavior, and awareness that is needed in making financial decisions that

achieves financial well-being in the long run.

It was also supported by Atkinson and Messy (2012) in which their study

used the results of the OECD research, wherein behavior affects financial

literacy in which, for example, excessive use of credit may cause the reduction

of financial well-being. However, attitude is constituted through the economic

and non-economic impression of an individual, which was the result of

behavior; thus, an essential component in the decision-making procedure.

It could be associated with the dynamic life cycle model made by

Benitez-Silva, Demiralp, and Liu (2009), they conceptualize financial literacy in

which they suggest to analyze the level of knowledge they have when it comes

to Social Security which is a form of investment. They researched retirement

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and savings choices by individuals who are unaware and lacking in knowledge

when it comes to the rules of the investment. Individuals might invest more if

they heard that they could gain benefits in their investment after they retire.

When they know the benefits and gains of an investment, they may accumulate

wealth or instead continue working.

Also, it could be connected with the three major theories of consumption

and saving behavior made by different economists. The first one is the life-

cycle hypothesis by Modigliani and Brumberg (1954), and later on, Modigliani

made his research with Ando (1957) using the same theory, wherein the

savings and retirement behavior of older individuals are being examined and

utilized. Using the data gathered, it was observed that consumption and

income were relatively unbalanced in the life cycle. Younger individuals

consume too much income. However, after they became middle-aged, their

income increased, resulting in paying off debts from past transactions when

they were younger. And then, when they grew older, their income would drop,

and consumption would significantly affect their savings made before since

they would mainly rely on it in that period.

Second is the permanent income hypothesis by Friedman (1957).

According to Kagan (2019), the permanent income hypothesis is based on the

level of spending of individuals, wherein their income would reflect their

consumption. The income pertains to the stable income individuals achieve.

However, as stated above, it mainly covers the consumption and not savings

since they would only save if it will surpass the value of the "permanent" income

or the expected income. Lastly, the relative income hypothesis by Dusenberry

(1949) in which the consumption level of an individual would remain the same
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regardless if there will be an increase in income. The three theories could

support this study since the consumption and saving behavior of an individual,

which is related to financial literacy's indicator, financial behavior, might affect

the investment participation of an individual.

The figure below shows the relationship between Financial Literacy,

which is the independent variable, and Investment Participation as the

dependent variable. The independent variable includes the following

indicators, which are financial attitude, financial behavior, and financial

knowledge, while the dependent variable consists of the following indicators,

which are time horizon and risk tolerance.

Independent Variable Dependent Variable

Financial Literacy Investment

Participation
Financial Attitude
Time Horizon
Financial Behavior
Risk Tolerance
Financial Knowledge

Figure 1. The Conceptual Paradigm of the Variable Used in this Study

Significance of the Study

This study is conducted to provide benefits to the following:

Employees. This can give them essential information on how they can

invest their money in a financially literate manner.

Students. This study would help them in becoming financially literate

shortly when they have a stable job and income that will enable them to

participate in investments.
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Potential Investors. This would give them a guide in decision making

when it comes to investments, in which they are provided with this information

to become financially literate.

Scope and Limitation

The scope of this study will be the employees of the University of

Mindanao, who are the faculty and staff. Moreover, the participants could be

any employees as long as they are working in the university and may or may

not have the experience of being involved in a particular investment. Thus, any

employees will do as long as they are the employees of the institution and part

of the departments who are involved in this study.

However, there are limitations set in this study due to a lack of financial

resources, time, and safety. The research will be conducted in the Main Branch

– Bolton Campus, considering the overall population of the employees, the

researchers cannot cater to all of them.

Definition of Terms

The following terms used in this study are conceptually and

operationally defined to establish a common frame of reference:

Financial Literacy. An ability to understand different financial areas that

are related to managing personal finance, money, and investing (Kenton,

2019). However, in this study, the researchers define financial literacy as a level

of knowledge of the University of Mindanao employees when it comes to

handling money and participating in investments.

Investment Participation. Conceptually, it is defined as a series of

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actions of investing money to result in a profit (Cambridge Dictionary, n.d).

Meanwhile, in this study, it refers to the involvement of the University of

Mindanao employees in a particular investment.

Review of Related Literature

This chapter provides readings, articles, and concepts from various

sources which supports to the quantitative study undertaken by the

researchers. Also, this section presents the works and writings of the various

authors regarding Financial Literacy and Investment Participation.

Financial Literacy

According to Ritchie (2019), financial literacy is to improve your learning

and capability with cash handling. Dealing with your cash requires a

fundamental understanding and willingness to grasp obligations and

acknowledging that you need to forfeit demands and profit. This ability can

enable an individual to build up money and be guided in distinguishing what he

spends and what he owes.

Kadoya, Khan, and Rabbani (2017) argued that financial literacy could

improve investment participation in two ways. First, financial literacy

progresses the understanding of individuals about risk-returns in investments

that will help them gain more wealth. Second, financial literacy lessens the

burdens when it comes to investing since knowledgeable individuals will know

how to handle their finances and investments.

Many countries have already been concerned about financial literacy

amongst its population, and as a result, they provide financial education on

those individuals. Moreover, innovative countries believed that they should be

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more advanced when it comes to their financial skills. However, a society that

is composed of financially illiterate individuals may cause their economic

problems and difficulties. Thus, one should have better financial knowledge

and skills to achieve balanced economic growth which would result to an

individual’s good finances (Isomidinova & Singh, 2017).

Learning about financial planning and investing is a recommendable

objective that everybody must achieve. You will have a progressively tolerant

attitude in the risks of assessing some potential returns of investment

(Kenton,2019). Besides, you will become more knowledgeable about your

finances. Based on Ong (2018), five easy advances can help individuals to

become financially literate:

Develop a
Growth
Mindset

Help
others take Learn at
control of your own
their pace
finances Financial
Literate

Make your Practice

own what you
investment have
decision learned

Figure 2. Ways that can help to become financial literate

Develop a growth mindset. Some individuals accept that they have

specific characteristics or habits that can't be changed. Having this mindset,

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an individual can listen without inclination. By doing so, every opportunity they

get on improving financial knowledge will also help grow and advance oneself

through finances.

Learn at your own pace. There is always a temptation in which

approaching another person to take responsibility for one's task in managing

funds. But individuals need to realize that they have to take charge of managing

their finances as it will also be part of the learning process. If only they avoid it

as they don't have any idea on what to do, there are various ways to educate

oneself about financial planning like searching the internet, books on financial

planning, and attending related seminars. By this, gradually, an individual will

enhance their knowledge in managing finances.

Practice what you have learned. Learning is better consumed when an

individual applies it promptly in their circumstance. When they become alright

with financial principles and techniques, they can build their financial plan and

begin executing what they have learned so far. The more they experience their

learnings, the more information they will pick up.

Make your own investment decision. It is useful when an individual

counsels professional financial guidance when they experience a complicated

financial issue; however, they are the ones who should settle the final decision.

When consulting, ensure that they tune in on what they need to state and gain

from it before settling on a decision. Also, search on those individuals who are

enough to disclose the market situation that must be free and can provide

impartial recommendations.

Help others take control of their finances. Learning how to improve one's
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financial situation further should be a continuing personal activity. To

accomplish a specific degree of financial independence, one way is to ace their

skills and instead to keep it only for themselves. It is much better to share one's

insights into other individuals. They can share it with different companions and

relatives that want to be more responsible for their financial future. Guiding

them will make it easier to achieve financial growth and stability.

Thus, financial education or being financially literate can profit

individuals considering their age, profession, or income. Youthful grown-ups

that are just starting with their works can give a fundamental apparatus for

planning and sparing with the goal so it will be kept and controlled. This

budgetary training can make families be able to manage and discipline

themselves to put something aside for any purpose it may have, like home

expenses or their children's education. Also, low-salary individuals can have

some advantages that will make them be able to save and maintain a strategic

distance from mind-boggling expenses charged for the monetary exchanges

and by non-budgetary organizations. In conclusion, financial literacy will help

individuals become literate in terms of saving and consumption (Ong, 2018).

Financial Attitude. Attitudes and preferences are counted as one of the

critical factors of financial literacy. If an individual will have a poor and negative

attitude in regards to saving, there is a possibility that they might be less

persuaded by their behavior. Financial attitude is having control of money to

reach the desired prosperity of individuals or communities. Thus, if they fail to

prioritize saving for the future or invest in long-term investments, it would mean

that those individuals would not be able to have their back-up source of money

in times of emergencies (Atkinson & Messy, 2012).

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According to Arthur (2012), to successfully meet the expected welfare,

an individual shall have an ability to handle the finances to match an individual's

needs responsibly. Having the qualities of an excellent financial attitude keeps

an individual away from financial distress. Moreover, to stay away from

financial trouble, a person needs financial knowledge in controlling his

finances; the way an individual view the financial acts and assess it as good or

bad by considering an individual's own or other's perspectives. Attitude is an

excellent factor in molding an individual's behavior towards gaining knowledge.

As stated by Chien and Devaney (2001), an attitude regarding financial

events and applications is a significant factor in financial behavior. Financial

decision making can be affected by attitudes, values or beliefs, and it also

reflects an individual's economical habits and practices. Financial

management practices such as savings, credit card debt, loan delinquency,

and spending can be measured by an individual's financial attitude, which

influences their goal setting and financial stability.

Moreover, according to Borden, Lee, Serido, and Collins (2008), being

optimistic regarding financial management can possess a positive effect on a

person's objective to use certain types of limit credit card use, investment

vehicles, and control their resources in more helpful ways. Thus, having the

right behavior towards finances can produce good investment participation.

Financial Behavior. How a person behaves will have a far-reaching

impact on their financial interests. It is essential to take into account the

behavior within a financial quantity. Financial literacy was emphasized as very

important when it comes to financial behavior (Atkinson & Messy, 2012).

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Haque and Zulfiqar (2016) defined financial behavior as it relates to the

capacity to manage finances, the interest of the person in growing economic

understanding, the expenditure verses in saving behavior, and attitude to risk

while making investments.

According to Lusardi (2008), the capacity to use understanding and

abilities to handle economic resources for economic well-being efficiently is

financial literacy. It involves programs that address an individual's

understanding, attitudes, and conduct of economic issues and ideas. In the

past, few studies have attempted to explore the effect of financial behavior on

financial literacy. Financial literacy has been shown to promote students'

participation in savings and investment, hence their participation when it comes

to finances (Bauer, Braun, & Olson, 2000).

Hibbert and Beutler (2001) added to this argument that the absence of

economic understanding often leads to face students' economic problems.

Knapp (2000) suggests that growing financial literacy can be an efficient

strategy for enhancing people's quality of life, as more knowledge leads to

favorable attitudes towards the quality of life, which eventually contributes to

better decision-making leading to efficient use of resources to enhance their

living standards.

While financial literacy measures can be used to forecast financial

behaviors or results, it does not necessarily mean that people will act in a

manner that many academics, policymakers, or teachers would consider

optimal. Other variables, such as behavioral/cognitive biases, issues of self-

control, family, peer, economic, community, and institutional influences, may

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determine an individual's decision (Huston, 2010). In other words, the mere

hypothesis that the existence of more data and abilities will lead to enhanced

financial conduct is incorrect (Braunstein & Carolyn, 2002).

Robb and Woodyard (2011) point out that in addition to the internal

impacts of political and economic forces, the financial well-being of people

depends on their behavior. That is why understanding the connection between

knowledge, and private economic problems are increasingly acknowledged. It

is generally recognized, however, that the level of financial knowledge is, in

fact, an important determinant of the financial behaviors of individuals, mostly

subjective knowledge, measured by the degree of self-assessed individual

knowledge.

Some studies confirmed that the association between financial

knowledge and financial decision making could be linked to financial behavior.

Based on the study of Lusardi (2008), individuals who have poor calculating

skills when it comes to computing interest rates have the possibility of

borrowing more and low wealth accumulation. Financially inclined households

are more active when it comes to investments or the stock market in which

their financial behavior may be liable to these actions.

Financial Knowledge. According to Lusardi and Mitchell (2014), financial

knowledge can help individuals in processing economic information and make

decisions that are in line with their resources. It assists individuals to settle on

correct choices in terms of finances. This ability also defines a proportion of

how realistic an individual and how adequately they applied to the real world of

what they have learned (National Financial Educators Council, 2018).

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Based on Johnston (2019), there are many numerous extra approaches

to make a profit if an individual has financial knowledge. However, according

to Clark (2018), most individuals are not bothered with financial education and

are under this illusion that they are handling their finances properly. Others do

not see the importance of learning the proper way of handling their finances

and how it is relevant to their day to day lives.

Investment Participation

Investment participation or stock market participation is a term

commonly discussed in finance-related activities and scholarly literature.

According to the results of Spataro and Corsini (2017), financial literacy has an

advantageous effect on investment participation, for it increases the level of

income and education, and also it lessens the aversion to risk.

According to Kadoya, Khan, and Rabbani (2017), investment

participation deficiency is a problem that individuals encounter, especially in

economics and finance. The results they gathered in their study revealed that

risk premium equity investment was relatively advantageous than risk-free

government bonds, which means that the amount of money they received from

risk premium is much greater in value than in risk-free, it is because the risks

in the investment are much higher which equates to a higher return. There are

researches regarding investment participation in other countries justifying the

lack of participation of individuals when it comes to investments. Though

individuals show interest in the stock market or investment, it does not mean

that their participation is high too.

Time Horizon. Lawson and Hershey (2005) defined time horizon as a

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factor that affects the readiness of an investor to take the risk and assist in

harmonizing the investment targets with risk tolerance. The future time outlook

is a psychological variable that gets great attention in the literature on

economic planning. It is a measure of how people focus on the future, not the

present or the past. Time horizon can be short, intermediate, or long, with most

investors accumulating wealth falling into the long term category since gaining

wealth would entail waiting for the money to grow. Determining the amount of

trouble one is prepared to take to achieve these priorities within the designated

period, is a time horizon (Haverland, 2018).

Also, Lawson and Hershey (2005) claimed that individuals with a brief

planning horizon not only have a low net average value, but they expect less

in terms of revenue from retirement savings. The results together show that

future direction will probably have an important effect on saving compartments.

Risk Tolerance. According to Haverland (2018), risk tolerance can rely

heavily on investment goals and time horizons. Goals can range from creating

revenue to increasing assets, or a mix of the two. Risk tolerance is one of the

major initial phases that can also lead to long term achievement. If you have

no time and the recent volatility in the equity market has been unnerving, then

it may be the best approach to conservative asset allocation.

Based on Chen (2018), risk tolerance is a significant part of investing,

where investors have a level of inconstancy and a willingness to grasp

investment returns. Also, it is important to have a sensible comprehension of

your capacity and ability for an individual to manage fluctuations in the

estimation of the values in their investment.

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An individual's readiness to risk is likely to be higher if your time horizon

is long, and your distribution of assets can lead more towards growth assets

like equities. Also, risk tolerance as an underlying factor in financial planning

models and investment suitability analyzes. It was also explained that risk

tolerance could affect individual conduct in the circumstances such as savings,

borrowing, mortgage type, and credit card management (Haverland, 2018).

Lawson and Hershey (2005) showed that risk-tolerant people have

greater defined contribution plans than those people who are risk-averse.

Similarly, risk tolerance is an important predictor of pension investment and

saving policies. Thus, in the study adapted by Lawson and Hershey (2005), the

prediction of risk tolerance of a person and the time measured up to the

retirement does not play any role in composing the risk property of a person.

In conclusion, the formulation of this study is a must. As the researchers

go over to other authors' researches and articles, they have found out that there

are only a few researches concerning financial literacy, especially in the

Philippines — not only financial literacy but also investment participation. The

lack of researches or studies in investment participation made the researchers

struggle to find appropriate content for their related literature, particularly the

indicators time horizon and risk tolerance. Moreover, the relationship between

financial literacy and investment participation has not yet been established.

Hence, the goal of this study is to analyze if there is a relationship between the

two variables and establish them in their study.

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Chapter 2

Methods

This chapter covers an overview of the methodology used in the study.

The discussions in this chapter are the research design, research subjects,

research instruments, data gathering procedure, and data analysis.

Research Design

This study utilizes a sequential explanatory research design to help

describe, contextualize, and observe in more detail the results from a

quantitative study. The importance is given to the quantitative data, and the

findings are incorporated during the interpretation phase of the study

(FoodRisc Resource Centre, 2016). This study involves the collection and

analysis of quantitative data, which was done by a survey method followed by

the interview method and analyzed through thematic analysis.

Quantitative Qualitative
Data and Data and Interpretation
Results Results

Figure 3. Sequential Explanatory Design

In the first phase of the study, the researchers used descriptive-

correlation design in which, according to Creswell (2012), a type of research

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design wherein researchers utilize to define the relationship between two or

more variables. It measures the relationship statistically between variables

using the correlation coefficient and describes the existing condition on those

variables (Mertler, 2016). For the second phase of the study, the researchers

have engaged in a mixed method in which they utilized the sequential

explanatory design to elaborate the quantitative data further. The explanation

from the authors above supports the reason why correlation and sequential

explanatory method is perceived as the best approach to reach the objectives

of this study.

Research Respondents

The respondents of this study are the employees of the University of

Mindanao for the academic year 2019-2020. Specifically, these employees are

from the Main Branch - Bolton. Furthermore, the cluster sampling method was

devised to choose the respondents in both phases. According to Jackson

(2011), cluster sampling is a method wherein multiple clusters or groups of

people are generated from a population. Those groups of people are clustered

based on their characteristics. Then random sampling is utilized after the

cluster method; however, in this study, researchers opted to devise the latter

part. Since the number of available respondents in a respective cluster is

limited.

Using cluster sampling, the researchers group the respondents

according to their cluster, which is the department they are assigned. Each

cluster/department will have five (5) representatives in the quantitative part and

one (1) respondent in the qualitative part. These departments are SHS, Clinic,
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Registrar, Library, HR, Guidance, Canteen, Janitorial, SAO/Cashier, and the

UMBN. In total, the researchers gathered fifty (50) respondents for the

quantitative phase and ten (10) respondents for the qualitative phase.

Research Instruments

In this study, the data were collected through a survey questionnaire.

Potrich, Vieira, and Kirch’s (2014) study was used as a basis in the

independent variable, while the investor profile questionnaire of Shwab (2018)

was used in the dependent variable. The questionnaire is answerable by

strongly agree (5), agree (4), neutral (3), disagree (2), and strongly disagree

(1). In the first indicator of the independent variable, it consists of five (5)

questions, the second has twelve (12) questions, and the third indicator has

six (6) questions, while in the first indicator of the dependent variable consists

of three (3) questions and the second indicator has four (4) questions.

Initially, in the first phase, the questionnaire was approved by three

experts with a mean score of 4.67. Also, we conducted a pilot survey and

obtained a Cronbach alpha analysis of 0.685, which indicates that the

questionnaire is reliable. In the second phase, the qualitative part involves an

interview protocol that consists of a central question, five (5) sub-questions,

and has follow-up questions for further probing. It was approved by three

experts with a mean score of 17.67.

Data Gathering Procedure

The researchers have undertaken the following procedure to ensure

credibility and see the completion of this study since the study is in the form of

mixed method, it involves two (2) phases. The first phase contains the
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procedures followed in attaining the quantitative data, and the second phase

is the procedures being followed for the qualitative phase. The following are

the data gathering procedure utilized in this study:

Phase 1

In collecting the data for the first part of the study, the following steps

were observed:

Asking Permission to Conduct the Study. The researchers prepared

a letter address to the Senior High School Principal asking permission to

conduct the study on the employees of the institution. Also, the researchers

distributed the letters to respective department offices involved in this study

and communicated for permission to survey them.

Informed Consent Form. After the approval of this study, the survey

was conducted, but before handing out the questionnaire, the researchers give

an informed consent form to respondents of this study. This is to assure their

safety and well-being; also, their answers and identity would be confidential as

guaranteed by the researchers.

Administration of Questionnaire. The researchers distributed the

questionnaire to the selected employees in which the interview was done in

their vacant time. Upon the completion of the forms, the researchers gathered

the questionnaire.

Collection and Encoding of Data. After collecting the questionnaires,

the researchers proceeded to tabulate the gathered data. These data were

interpreted, analyzed, and the results were presented.

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Phase 2

In collecting the data for the second part of the study, the following steps

were observed:

Asking Permission to Conduct the Study. The researchers asked

permission to the principal to conduct the second phase of the study. Also, the

researchers give letters to every department office to ask permission to

interview a representative from their office to participate in the study.

Conduction of Interviews. After obtaining permission to conduct the

study and the interview, the researchers approached the research participants

and began the interview session.

Transcribing and Analyzing the Data. All the data gathered from the

interview have undergone analysis. Before that, the researchers have done

the initial phase in which they did the transcription and translation. When

researchers finally deciphered the data; it was then developed into the themes

reflected in this study. In addition, the interview is strictly confidential regardless

of the tape-recording used to gather information, which was approved by the

participant.

Data Analysis Procedure

The statistical tools that were utilized in the study are the following:

Mean. It is a basic numerical average of a set of at least two numbers

(Kenton, 2019). Thus, the mean is the average of the values given in certain

data. In this study, the mean was used to determine the average data of the

employees about financial literacy and investment.

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Standard deviation. This was used to give researchers an idea of the

distribution of the computed mean. It is a measurement that estimates the

scattering of a database concerning its mean (Hargrave, 2019). In this study,

the standard deviation was used to determine the spread of the answers taken

from employees of the University of Mindanao – Bolton Campus.

Pearson correlation coefficient. It is used to measure the numerical

relationship between the dependent and independent variables (Clark, 2018).

This tool is used in the study to measure the significant relationship of the

dependent variable, which is the investment participation and independent

variable, which is financial literacy.

Thematic Analysis. According to Braun and Clarke (2013), it is a

flexible type of data analysis in which the qualitative researchers make use of

to produce themes from the interview conducted. In this study, thematic

analysis was used as a means of structuring the data gathered from interviews

and conduct an analysis to form themes and sub-themes out of it.

Ethical Considerations

It is the values and principles that address questions of what is good or

right and bad or wrong in the affairs of humanity (Australian Law Reform

Commission & Australian Health Ethics Committee, 2001). It simply

distinguishes what should be done and what should not be done in conducting

this study. The following are the principles that should be observed in

conducting an interview:

Social Value. This research study has relevance not only for certain

examples or similar studies but also for an existing social issue. With this, the
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researchers must ensure that the results and outcomes of this study are

appropriate or equivalent to the social issues that exist. The results of this study

will provide a better understanding of the relevant issues to facilitate individual

well-being. A better understanding of the social issues can be developed by

evaluating the nature, methodology, and data collection of this report. It can

also provide helpful information for the study's aims.

Informed consent form. Before the beginning of this study's interview,

the researchers had disseminated informed consent that requires permission

for this study from the persons involved to become respondents. The

researchers underlined their responsibility to treat the respondents as being

rational, independent, and willing to make their own decisions on how to use

and share the information they provide. The researchers must ensure that the

material is well understood by the prospective participant and sign informed

consent.

Privacy and confidentiality. Investigators must respect the privacy of

the respondents. In the informed consent, it is written that the security of the

respondent's information is one of the investigators' concerns. The researchers

are given trust and agreed to maintain the highest degree of confidentiality, rest

assured that all information gathered in this study will be shielded from the

disclosure of sensitive information.

Transparency. Studies must be open about aspects of a study that can

impact the details of the participant's health, freedoms, protection, and

confidentiality by showing respect for and bearing on the decisions based on

their responses. The findings are clinically relevant and confirmed, and the
 25

course of action for addressing these issues is readily available as study

outcomes are communicated to its participants for the well-being of the

participant. Study participants must be honest in reporting their health

conditions, and to be sincere in voicing their reservations regarding their

participation in research.

Trustworthiness of the Study

It is an ambiguous concept that is associated with the validity and

reliability of a study since qualitative researchers do not apply instruments with

established value about validity and reliability (Statistics Solution, 2019). The

researchers establish trustworthiness through the following factors:

Credibility. According to Statistics Solution (2017), that credibility is the

first aspect that must be build up. It is viewed as the most significant

perspective in building up trustworthiness. The researchers gave each

participant a consent letter where they can sign it for their approval to

participate in the research study. Researchers ensured that both participants

and researchers are comfortable with each other that the participants can

answer honestly and trust them with their answers.

Transferability. According to Trochim (2006), transferability is the

degree to which the findings of qualitative research can be generalized or

transferred in any other sense or environment. The researchers explained the

research problem in detail to easily transfer the findings to a large group of the

population in other text such as in quantitative form. With that, readers can

easily comprehend the research problem accordingly.

Dependability. According to Anney (2014), "solidity of results over time"

 26

refers to reliability. Dependability involves participants reviewing research

results and interpretation and suggestions to ensure that all data obtained from

the study informants are supported. The researchers used the method of

external audit to confirm the accuracy of the findings and that those are

supported by the data collected. The transcription of this information from this

interview surely comes from the respondents.

Confirmability. According to Statistics Solution (2017), confirmability is

the last rule of trustworthiness that a qualitative researcher must build up. This

rule is to verify that the findings are molded by participants rather than the

researchers' biases. Researchers ensured that the answers truly came from

the perspective of each participant and not the researcher's ideas.

Researchers assured that the information they gathered on participants is kept

in an audio-record and transcript for the validity and truthfulness of the

information.
 27

Chapter 3

Results and Discussions

This chapter presents the analysis and interpretation of the data

gathered from the respondents through a quantitative approach, which

includes the data collected from the survey questionnaire and the data

obtained from the interview in the qualitative approach.

Findings

The following results were accumulated through the computation of the

data obtained from the survey, which are analyzed and interpreted through

mean, standard deviation, r-value, and p-value. Also, the results from the

interview are presented through thematic analysis.

Level of Financial Literacy per Department

Table 1 shows the level of financial literacy of the employees per

department. The following data shows the department that got the highest

mean in financial attitude which is the Canteen agreeing that it is important to

set goals for the future, in financial behavior is the Clinic in which they analyze

their bills before making large purchases, while in financial knowledge is the

Library that considers investing in the top-performing mutual funds. The

departments that got the lowest means are the Registrar in financial attitude

which disagreed that saving is impossible for their family and Janitorial in both

financial behavior in which they might not discuss to their family how they

spend their money and in financial knowledge where they might not know if

carrying a balance on their credit card help on their credit. Overall, the SHS got

the highest mean. Oppositely the Janitorial got the lowest mean.
 28

Table 1. Level of Financial Literacy per Department

Financial Department Mean SD

Literacy
SHS 3.64 0.38
Clinic 3.08 0.56
Registrar 3.04 0.43
Library 3.52 0.46
Financial HR 3.36 0.64
Attitude Guidance 3.20 0.45
Canteen 3.88 0.33
Janitorial 3.40 0.20
SAO/Cashier 3.60 0.47
UMBN 3.08 0.44

SHS 3.88 3.88

Clinic 4.15 0.25
Registrar 3.78 3.78
Library 3.50 0.81
Financial HR 2.97 0.90
Behavior Guidance 3.80 3.80
Canteen 3.17 0.42
Janitorial 3.13 0.26
SAO/Cashier 3.92 0.48
UMBN 4.12 0.46

SHS 3.87 0.76

Clinic 3.73 0.56
Registrar 3.70 1.15
Library 3.90 0.38
Financial HR 3.40 0.67
Knowledge Guidance 3.73 0.32
Canteen 3.37 0.36
Janitorial 2.90 0.30
SAO/Cashier 3.37 0.36
UMBN 3.53 0.57

SHS 3.80 0.38

Clinic 3.65 0.34
Registrar 3.51 0.68
Library 3.64 0.29
Overall HR 3.24 0.58
Guidance 3.58 0.22
Canteen 3.47 0.27
Janitorial 3.14 0.16
SAO/Cashier 3.63 0.35
UMBN 3.58 0.24
 29

Table 2 shows the level of financial literacy in terms of financial attitude,

financial behavior, and financial knowledge of the employees of the University

of Mindanao. It reveals how literate the employees are in this institution overall.

Table 2. Level of Financial Literacy

Indicators Mean Std. Deviation

Financial Attitude 3.380 .489
Financial Behavior 3.641 .626
Financial Knowledge 3.550 .614
Overall 3.524 .393

Financial Attitude. The mean score for financial attitude is moderately

high, which means that having the right attitude in managing money can affect

your way of investing; thus, a good investment. Based on Atkinson and Messy

(2012), attitudes and preferences are counted as one of the important factors

when it comes to being financially literate. However, if an individual failed to

prioritize saving for future or long-term investment would mean that they would

not be able to have their back-up source of money, and that is an example of

a bad financial attitude. Therefore, having the qualities of a good financial

attitude keeps an individual away from financial distress (Arthur, 2012).

Financial Behavior. The mean score of this indicator showed a

moderately high result, which means that the financial well-being of an

individual depends on their behavior (Robb & Woodyard, 2011). In addition, the

capacity to use understanding and abilities to handle economic resources for

economic well-being efficiently is financial literacy (Lusardi, 2008). In

connection to this, as defined by Haque and Zulfiqar (2016), financial behavior

relates to the capacity to manage finances, the interest of the person in growing
 30

economic understanding, the expenditure verses in saving behavior, and

attitude to risk while making investments. It means that an individual’s finances

would reflect his behavior.

Financial Knowledge. This indicator also has a moderately high mean

score, which means that financial knowledge can help individuals in processing

economic information and make decisions that are in line with their financial

resources. It assists individuals to settle on correct choices in terms of finances.

It enables them to discuss finances with their accountant, financial institution,

etc. (Lusardi & Mitchell, 2014).

The overall mean score of financial attitude, financial behavior, and

financial knowledge are moderately high since all three indicators have

moderately high scores. Therefore, the questionnaire itself had received

positive feedback regarding the indicators, especially the variable, financial

literacy. Since the three dimensions of financial literacy is a multidimensional

construct that analyzes financial literacy, it enables individuals to build up

money and be guided in distinguishing what he spends and what he owes

(Ritchie, 2019). In conclusion, financial literacy will help individuals become

literate in terms of saving and consumption (Ong, 2018).

Level of Investment Participation per Department

The presented data in table 3 reveals how financial literacy impacts

investment participation utilizing the employees of every department their

participation when it comes to investments in terms of time horizon and risk

tolerance. It shows the interpretations from the employees based on their given

answers on the survey questionnaire.

 31

Table 3. Level of Investment Participation per Department

Investment Participation Department Mean SD

SHS 2.27 0.72
Clinic 2.60 0.60
Registrar 2.40 1.04
Library 2.60 0.43
Time Horizon HR 2.93 0.98
Guidance 2.53 0.61
Canteen 3.50 0.79
Janitorial 3.40 1.08
SAO/Cashier 2.40 0.42
UMBN 1.60 0.82

SHS 3.50 0.47

Clinic 3.90 0.78
Registrar 3.50 0.95
Library 3.25 0.73
Risk Tolerance HR 3.25 0.98
Guidance 3.40 0.42
Canteen 3.70 0.48
Janitorial 3.75 0.68
SAO/Cashier 3.15 0.98
UMBN 4.05 0.45

SHS 2.88 0.34

Clinic 3.25 0.60
Registrar 2.95 0.22
Library 2.93 0.56
Overall HR 3.09 0.41
Guidance 2.97 0.42
Canteen 3.60 0.55
Janitorial 3.58 0.55
SAO/Cashier 2.78 0.66
UMBN 2.83 0.24

The aforementioned data showed that the department that got the

highest mean in the time horizon is the Canteen in which they plan to withdraw

money from their investments immediately. In risk tolerance, the department

that got the highest mean is UMBN in which they know when it comes to

investments and that when they invest their money they are most concerned

about their investments gaining value, also they got the lowest mean in time

horizon in which they disagreed that once they start withdrawing funds from
 32

their investments, they plan to spend it all immediately. Overall, the department

that got the highest mean is the Canteen, which means that they have higher

investment participation. However, the lowest is SAO/Cashier, which was also

the lowest in risk tolerance since they disagreed that when someone invites

them to invest, they instantly participate.

Table 4 shows the level of investment participation of the employees as

a whole in terms of time horizon and risk tolerance. It shows how financial

literacy affects the level of investment participation of the employees as a

whole.

Table 4. Level of Investment Participation

Indicators Mean Std. Deviation

Time Horizon 2.603 .842
Risk Tolerance 3.620 .697
Overall 3.074 .468

Time Horizon. The mean score of the time horizon is moderately low,

which means that financial literacy does not have a great impact on the time

horizon. As a result, being financially literate does not mean that you have a

high time horizon. According to Haverland (2018), the time horizon is

determining the amount of trouble one is prepared to take to achieve these

priorities within the designated period. It measures how people focus on the

future, not the present or the past. Lawson and Hershey (2005) claimed that

individuals with a brief planning horizon not only have a low net average value,

but they expect less in terms of revenue from retirement savings. Thus, some

of the respondents have little patience or do not make plans for the future for

they have a low time horizon.

 33

Risk Tolerance. This indicator has a moderately high mean score, which

means the respondents are willing to take risks just to have an increase in

income. It is one of the major initial phases that can also lead to long term

achievement (Haverland, 2018). Based on Chen (2018), risk tolerance is a

significant part of investing, where investors have a level of inconstancy and a

willingness to grasp investment returns. In addition, it is important to have a

sensible comprehension of your capacity and ability for an individual to manage

fluctuations in the estimation of the values in their investment. Lawson and

Hershey (2005) showed that risk-tolerant people have greater defined

contribution plans than those people who are risk-averse.

The overall mean score of investment participation in terms of time

horizon and risk tolerance is moderately high, which means that investment

participation is affected by financial literacy. Although one of the indicators of

investment participation, which is time horizon, is something that is not affected

by financial literacy. However, overall the investment participation denotes that

financial literacy is important if one wants to be aware of his investments or

generating more income. According to the results of Spataro and Corsini

(2017), financial literacy has an advantageous effect on investment

participation, for it increases the level of income and education, and also it

lessens the aversion to risk. The connection between the two variables is

evident, as financial literacy affects investment participation.

Significant Relationship Between Financial Literacy and Investment

Participation

Table 5 shows the result of the main objective of this research, which is
 34

to find out if financial literacy does affect the participation of the employees in

investments. The results below show the relationship between the two

variables.

Table 5. Significant Relationship Between Financial Literacy and

Investment Participation

Correlated Variable r-value p-value

Financial Literacy
.729 .050
Investment Participation

The r-value shows a moderately high score of .729, which is positive.

As a result, when financial literacy is high, investment participation will be high

too. On the contrary, when financial literacy is low, investment participation will

be low too. Hence, a direct relationship between the two variables.

The p-value has a result of 0.050, which is equal to the alpha value,

which is α = 0.05 level of significance. Therefore, the null hypothesis is rejected.

This means that there is a significant relationship between financial literacy and

investment participation. The two variables are related to each other and had

established a concrete relationship between them.

As mentioned by Kadoya, Khan, and Rabbani (2017), financial literacy

can improve investment participation in two ways. First, financial literacy

progresses the understanding of individuals about risk-returns in investments

that will help them gain more wealth. Second, financial literacy lessens the

burden when it comes to investing since knowledgeable individuals will know

how to handle their finances and investments.

 35

Thematic Analysis

It is a process that researchers used to assist them in analyzing

qualitative data, specifically “a method for identifying, analyzing, organizing,

describing, and reporting themes found within a data set” (Nowell, Norris,

White, & Moules, 2017).

Managing your money

An ability to realize different financial areas that are related to managing

personal finance, money, and investing is defined as financial literacy (Kenton,

2019). An individual need to realize that they have to take charge of managing

their finances as it will also be part of the learning process. There are various

ways to educate oneself, and gradually an individual will enhance their

knowledge and understanding in managing finances (Ong, 2018).

Knowledge. Some of the respondents claimed that they know how to

manage their money. According to Merriam Webster (n.d.), knowledge is being

aware of something. Thus, it does not entail application nor practice, and it

could just be plain definition or description.

“In our curriculum before, we’re not taught of that (finances, etc.),
but since I was teaching Economics (today), I can really say that
somehow I have substantial knowledge about it but not really that
applied because I'm not really experiencing investing into
something. So, maybe knowledge-wise but practicality, I doubt.
But knowledge, of course, you can explain the concept and
principles. But the question is, how would you apply it? The
practicality of it. That's the question.” (Respondent 2)

“As of now, in terms of literacy meron naman akong knowledge

about on how to be literate in terms of financial, pero like before
nung student ako wala jud koy ideya. Unlike today, expose man
gud mi sa mga seminars through sa mga financial, kung pano
maging financial literate.” As of now, in terms of literacy, I do have
a bit of knowledge about how to be literate in terms of finances,
 36

but before when I was a student, I really don't have an idea about
it. Unlike today, we were exposed to seminars about how to be
financially literate. (Respondent 5)

“Because I attended seminars for investment plan. We attended

seminar for retirement plan here in the University and one of the
purpose why they explain (retirement plan) is to invest and use
your income wisely for your future purposes.” (Respondent 3)

Moreover, some of the respondents defined and described how to

handle or manage an individual’s money.

“From the word itself literacy, it's a nature of how a person

manages his/her finances, his/her understanding on how to
spend, how to save.” (Respondent 6)

“Kung unsa ka ka-hawd mudala sa imong kwarta. Kung gi unsa

nimo siya pagdala, gi unsa nimo siya pag manage, giunsa nimo
siya pag bahin bahin, gi unsa nimo pag kanang calculate, para
dili ka ma-short or ma-over sa imong expenses kaysa sa imong
income.” It is how good you are at handling your money. How you
handle, manage, divide, and calculate for you to avoid lacking
money, or have too many expenses rather than income.
(Respondent 9)

"Because since you know the ins and outs (of the monetary) of a
financial institution, you would know how to deal with your money,
deal with your investments. So, you know I believe that if your
financial literacy is high, then you have a very fair chance of a
win, getting high profit for the future." (Respondent 7)

"For me, financial literacy means you know how to manage your
money, the money you earned, the losses, your liabilities, and
your responsibility. And if you're going to have savings, you know
when to invest, not to invest. I don't know the technical terms, but
that's I think that I know about literacy." (Respondent 1)

“So how do I define financial literacy, it's the education and

understanding of various financial areas including the topics
related to managing personal finance, money, and how you
manage your investment or your money itself.” (Respondent 8)

“Okay, financial literacy for me is how to save your income for

your future purposes and as for an investment or any kind of
investment so that your money - you can use it in a wise way.”
(Respondent 3)

“The definition for me of financial literacy is your able to foresee

the future about what are you going to do with your resources for
 37

now. So, maybe making it grow for the next period. So, thinking
about the future, that's what I really mean with what is financial
literacy. You're able to budget, you're able to mitigate some
barriers with regards to the decision making, and then sound
decision making about money and finances and resources.”
(Respondent 2)

Respondent 6 and Respondent 7 gave tips on how to gain knowledge

on how to manage money.

“Tapos mag basa ug mga newspaper, kanang mga mahilig man

mo mag facebook, mangita pud mog mga site na mga legit jud,
maka learn mo.” Then, you should read some newspapers, and
since you like scrolling on Facebook, find some legit sites where
you can learn. (Respondent 6)

"Reading really helps. If you keep a pressed with current events,

if you read the signs when I say the signs you see the trends in
the stock market, if you see the current situation of the banking
industry, if you know those things then you know I guess you are
in the right track to be in an investment, to pursue investment
activities." (Respondent 7)

According to Lusardi and Mitchell (2014), financial knowledge can help

individuals in processing economic information and make decisions that are in

line with their financial resources. It assists individuals to settle on correct

choices in terms of finances. On the other hand, according to Clark (2018),

most individuals are not bothered with financial education and are under this

illusion that they are handling their finances properly. Others do not see the

importance of learning the proper way of handling their finances and how it is

relevant to their day to day lives.

Understanding. The respondents manage their money based on their

understanding. However, there might be a misunderstanding between

understanding and knowledge. To clarify, Merriam Webster (n.d.) defined

understanding as to the capacity or ability to comprehend. It also entails the

practicality or how an individual applies the knowledge of managing money.

 38

Respondent 1 emphasized the fact that people should know how to

manage their money, considering the fact that there are many opportunists out

there who are desperate to have money.

"I just think that sometimes these people should learn how to
manage their money, especially watch out of other opportunists,
because we cannot deny that we are in the third world country. A
lot of poor people, everyone wants to be rich. Especially you want
to be rich, you are kind of desperate, so we have to be very
careful if you have money. That's what I really think that when
you have money - money can make you happy and make you
sad so you have to be very careful, specially to people who are
opportunist, sometimes it's a really good thing to be skeptic
though I'm not encouraging everyone to doubt anyone but you
have to really think a million times especially when you invest into
something that you work for." (Respondent 1)

Respondent 1, Respondent 7, and Respondent 8 also added that being

literate helped them avoid being a victim of scams and become aware.

"Because I am literate, I know the process of investing money,

how do you get the return of your (value) money. That's the
reason why I wasn't a victim of the scams because I know how
money, how you get your profits. It doesn't come in like magic,
just put money and have nothing in return. You don't risk anything
unless they risk putting money. But like no products, no anything,
no service. It's very beneficial for me because I am financially
literate I wasn't scammed." (Respondent 1)

"I would say that I am very much learned when it comes to money
matters, so I know how to handle it well. So, if you say it's
financial literacy, it's knowing how to handle your resources, and
I'm sure I am aware of it."
(Respondent 7)

"Yes, for me but not necessary for other people because we do

have individual differences in handling money, and in handling
investment, some of the people have financial literacy, but they
don't invest because they keep their money (by the bank) or
anything without investment." (Respondent 8)

Also, Respondent 6 gave importance in understanding an individual’s

finances by being aware of the instruments and methods, while Respondent 2,

Respondent 8, and Respondent 5 emphasized the right approach to investing.

 39

“It starts from understanding what is financial, what is financial

instruments, what are methods or other ways for you to get
involved with those investments.” (Respondent 6)

“If you will try to invest, always see to it that there's at least 70%
guaranteed, it is important to invest especially in the government
and it is required. Because I think the government would really
subsidize, if it’s government subsidized there’s a greater chance
na babalik talaga yung investment or sa bangko ka mag invest
siguro. Kaysa high risk, high reward kung sa outside, it’s not
really maka return ug investment. Example, pahiram ka sa imong
friend, muana imong friend na “naa koy bag-ong negosyo, mag
invest ka”, what if dili mag boom so nganga ka, wa kay kwartang
madawat.” If you will try to invest, always see to it that there's at
least 70% guaranteed, it is important to invest, especially in the
government, and it is required. Because I think the government
would really subsidize, if it is government-subsidized, there's a
greater chance that there's a return on investment or maybe
invest in a bank rather than investing a high risk, high reward
outside, it won't really produce a return of investment. For
example, you let your friend borrow money, saying, "I have a new
business, you should invest," what if it won't generate income, so
you have nothing, no money to receive.” (Respondent 2)

“For me, choose wisely in investing your money because if the

investment is sustainable for you, it takes into account of your
circumstances or your objectives.” (Respondent 8)

“Mag background check sa ka sa investment company kung

naka established na ba gyud siya or mao pay pag start. Kay pag
mag invest ka dili lang man gud gusto lang nimo mu-invest para
mutubo imong kwarta, so dapat knowledgeable jud ka enough.”
You should do a background check on the investment company
if it's already established or just only started to operate. It is
because when you invest, it is not only about gaining returns, so
you should be knowledgeable enough. (Respondent 5)

Respondent 4 and Respondent 10 specified their way of handling

money in which they only prioritize basic and necessary things.

“Mag gasto lang ko ug kanang necessary things tapos pag naay

mabilin kay i-save.” I only spend on necessary things, and the
rest is put into savings. (Respondent 4)

“For me, financial literacy, of course kanang gina una jud nako
ang mga akong basic needs as a mother and kanang mga
importate lang, kung naa kay kanang ma extra sa imong money
didto na nimo isulod ang imong mga wants.” For me, of course, I
 40

prioritize basic needs more as a mother and also important

things. If there's extra money, you can use it to cater to your
wants. (Respondent 10)

Managing your money takes time and experience to understand and

improve. It takes commitment and a firm understanding of your financial

situation. Having the right way of managing money can be the solution for

people trying to get their financial life in order (Castillo, 2017). Hence, being

literate when it comes to finances would be a great way of solving the crisis of

difficult financial situations that an individual might face.

Provide benefits for future purposes

According to Benitez-Silva, Demiralp, and Liu (2009), individuals may

invest more if they heard that they could gain benefits in their investment after

they retire. When they know the benefits and gains of an investment, they may

accumulate wealth, have their retirement plans, or simply accomplish a specific

goal, which are purposes for investing (Beattie, 2019).

Retirement. As we all know, most of the reason or purpose of why

people engage in investments was because of their impending retirement.

Moreover, a large amount of respondents has the same sentiments in regard

to participating in investment for the sole purpose of having money once they

are out of a job.

“I think because investment is always grow and grow, like what I

have said in the near future it can help you labaw na tiguwang
nata, mag retirement nata. Pag-ibig, SSS, Philhealth, mao man
jud nang mutabang sa atoa at our 60-65 age and above age
kumbaga.” I think because investment always grows, like what I
have said in the near future, it can help you, especially when we
grow older when we are going to have our retirement. Pag-ibig,
SSS, Philhealth are investments that will help us mostly at our 60
– 65 age and older. (Respondent 8)
 41

“Because I want to retire early, I want to retire at 50 dili 60. So,

gusto ko by 50 kanang dili nako di nako kaylangan mag salig sa
magkingkinsa.” Because I want to retire early, I want to retire at
50, not 60. So, when I am 50, I won't need to rely on anyone.
(Respondent 6)

“It helps you live a comfortable life later when you retire.”
(Respondent 6)

“Kanang mga Pag-ibig investment man pud na nato, mga SSS

kay madawat man nato na siya pag mag retire na ta, mga
Philhealth like mag invest para incase in emergency magamit
nimo siya.” Pag-ibig is one of our investment. SSS can be
received when we retire, Philhealth can be used in times of
emergency. (Respondent 9)

"Again, because of uncertainties, as time passes by, I get old,

and some years from now, I will be out of job already, I'll be
retired. And that's hid(den) money will prepare me for my
retirement so that when I get old, I wouldn't be some kind of
begging Lolo that will scrimp on the little money that I have. So, I
want to be comfortable when I am retired." (Respondent 7)

"Because sooner or later we will retire in our work and as part of

the retirement you'll have no job anymore, at least you have
secure, or you use your money wisely through investment and
that investment you will use it after your retirement."
(Respondent 3)

Retirement is to "withdraw from one's position or occupation or active

working life." You can only attain retirement when you have a source of income

that does not entail you doing jobs. Retirement is also considered as "financial

independence." Both are accomplished when you have sufficient savings,

investment income, or pension income to cover your way of living (Anspach,

2019).

Accumulate wealth. Retirement is one thing, but having the purpose of

accumulating wealth or making yourself rich is one of the reasons why people

do invest. Some of the respondents definitely think so.

"Because there's an ROI or Return of Investment, because if

there's no Return on Investment, why would I invest, right?
 42

Because investment is supposed to have return(ed) from what

you have given, what you have put into something so it could
have a return on investment on that." (Respondent 2)

“Because I believe that it will give me returns in the future.”

(Respondent 7)

“Nag invest ko para more chances of winning.” I participated in

investments to have more chances of winning or gaining returns.
(Respondent 9)

Building wealth is a topic that acts as a stimulus to heated debate,

resulting in promoting quirky "get rich quick" schemes that happened before,

which was the investment schemes, it drives people to pursue transactions

they might otherwise on no occasion consider. But who could say no to getting

rich fast? Thus, according to Investopedia (2019), an individual should be

aware, make money, save money, and later on invest in legit companies.

Specific Goals. Unlike having retirement as the sole purpose of

investing, other people tend to have other things in mind. Some of the

respondents have specific or certain goals that pushed them to invest, may it

be a short-term or long-term investment goal.

"We can see in two months' vacation; we don't have any salary
on that. We foresee that maybe it can help in times that you get
nothing. So, saving plus the return on investment of dividend is
important." (Respondent 2)

“For me in the near future it can help me, mao man jud na future
ahead man jud ta all the time. Dili man jud ta at the present lang
kay pwede man ta maka kwarta sa present. In the near future,
when we are in the right age, old age najud ta you yourself can
help yourself, no one other. So, in the near future, St. Peter, mga
Silangan, it can help you pautang diri ana.” For me, in the near
future, it can help me, since we are into our future ahead all the
time. It's not only about the present since we can always
generate income in the present. In the near future, when we are
at the right age, in our old age you can help yourself, no one
other. So, in the near future, St. Peter and Silangan can help you
lend to other people. (Respondent 8)
 43

“For future use, for example if kanang wala nakoy trabaho at least
I can get money from those investments. For kanang unsa bana
health care, for funeral, or for future generations. Pareho sa
akong mga anak in the future mga ing-ana.” For future use, for
example, if I don't have work anymore, at least I can get money
from those investments. For health care, for a funeral, or for
future generations like for my kids in the future. (Respondent 6)

“It helps you if there is emergency.” (Respondent 6)

“Of course para sa future kay importante nga dapat kabalo ka

mag discipline sa imong self, tapos sa mga financial na mga
gastuson.” Of course, for the future, because it is important that
you know how to discipline yourself, then in terms of financial
expenses. (Respondent 5)

“Kung investment man gud kay for the future gud nga naa kay
masave naa kay makuot every naay problem na mahitabo.”
Investment is utilized for the future. If you have saved (invested)
something, then you have the money you can spend when
problems arise. (Respondent 4)

"Saving money for my future, especially for my family."

(Respondent 3)

“Because if dili man gud paghandaan ang butang, pag abot sa

panahon mag mahay ka nganong ‘wala man ko nag kuan ani
dapat sauna pa’. Kay pag mag invest man gud ka karon kanang
mas gamay baya ug value karon, pag abot sa panahon mahalan
na ani ‘hays salamat naka kuan ko’ kaysa dira paka magpalit akto
akto na dako nakag expenses.” Because if you don't prepare for
your investment, when the time comes, you will regret not
investing. If you invest right now the cost is cheaper, rather than
investing in the future might cost expensive, buying on the spot
would incur greater expenses. (Respondent 9)

Investing to achieve financial goals involves a balance of long-term and

short-term investments. You don't always have to think long term or short term.

Investing's purpose is to shape your present financial situation as it forms your

future one. It can be used as a way to improve your income, helping you in

acquiring the things you want. It is because investments change along with the

investor's desired goals or objectives; this type of investing is not like retirement

investing. After all, having a tangible reward is all that matters (Beattie, 2019).
 44

Risks give you more return

An individual is willing to take risks just to have an increase in income,

which also leads to long term achievement (Haverland, 2018). According to

Lawson and Hershey (2005), risk-takers have greater defined contribution

plans than those people who are risk-averse. Moreover, there are quite a

number of respondents who are risk-takers; however, we cannot deny the fact

that there are some respondents who are risk-averse since they are much

more afraid of losing their money than having the possibility of increasing it.

Tolerance. As defined by Cambridge Dictionary (n.d.), it is the

"willingness to accept behavior and beliefs that are different from your own,

although you might not agree with or approve of them," this means that when

you are investing you should be open towards the possible risks that may arise.

It is a known fact that investments could soar high or might go down the next.

Thus, one must know the risks and be tolerant of it.

Some respondents have agreed that being a risk-taker is a prerequisite

of investing.

“Because there is no assurance man gud in investment,

especially in business so dili pud nako mahibal an kung mag work
or dili kung dili pud ko mag risk. So, ana lang learning process
lang siya.” Because there is no assurance in investment,
especially in business, so I would not know if it will work or not if
I am not going to take the risk. So, it is just part of the learning
process. (Respondent 6)

“Sa ako pud, kanang dapat mag think ko ug 100 times bago ko
mu sulod ug investment and then dapat jud open-minded ko sa
mahitabo kana nga investment in the future para dili ko ma
depresss if ever ma water akong kwarta na gi invest.” For me, I
should think 100 times before participating in investment, and
then I should also be open-minded regarding what will happen to
that investment in the future so that I would not be depressed if
ever my investments would dissolve. (Respondent 10)
 45

“Because of my (me) being a risk-taker, I just let it flow, so

meaning I’m not really the type who is so conscious. Again,
because investment sometimes involves a risk, that's why if
you're talking of dealing tolerant about it. Yes, I am tolerant cause
I think I can handle it.” (Respondent 7)

"Well, the uncertainties in this world is always a given. So, you

wouldn't know what would happen three years from now. What if
the bank closes? Those are different types of a risks. Shares of
stocks, if the stocks plummet, if the rates of the stocks are deep,
that is a risk that I would have to take. If a certain business does
not work well, that means the stocks will fall. Your investment
might result into negative yield.” (Respondent 7)

“So, kung in terms sa investment, naa man gyud na siyay positive

ug negative. So, dapat risk-taker ka pag mag invest ka. Pag mag
invest man gud ka, meaning kanang ano nimo nga money kung
baga sobra, kay kung mag invest ka then tama-tama lang na
imong money and then naging ano siya naa man gud siya
negative ug positive effects, so at least dili kaayo siya sakit sa
imong buot nga nag invest ka.” So, in terms of investment, it
entails positive and negative effects. You should be a risk-taker if
you are going to invest. If you are going to invest, it means that
you are using excess money, since if you are going to invest, then
your money is just enough for basic needs, and then it proceeded
with the negative effect so at least you would not be hurt if you
invest that money. (Respondent 5)

“Because many investment scheme fail and it is known na not all

investment is okay, most of them fail like the example of the Kap
Investment Plan before na dako kaayo siya na company. Pero
we thought okay na but still nag fail gihapon, so I think in taking
investment part gyud ang thinking risk also.” Because many
investment schemes fail, and it is known that not all investment
is okay, most of them fail like the Kap Investment Plan before that
was a very big company. However, we thought that it is okay, but
it still failed, so I think in taking investment, it is part to think of the
risk also. (Respondent 3)

“It's something na mag win or lose gud siya, wala ka kabalo if

kana ba siya is madawat nimo siya or dili, kanang wala lang chill
chill lang gud ka kay nag invest man ka. Pareha atong last time
tung nahitabo diba tung mga investment scheme diay to siya kato
man gud siya is kanang dili jud kaayo as in na katuohan kay dako
jud kaayo ang iyahang mubawi sa kwarta. Kay ang investment
man gud mostly man gud ana siya sa mga companies dili na siya
mu times four or times five, mga pila lang siya ka percentage like
1.5. Dira sa bangko pag mag butang kag kwarta diraa,
investment naman na nimo siya kay kana siya ang kwarta diraa
gina gamit pud na bale rotational lang biya na atong kwarta.” It’s
 46

something that could bear either win or lose. You would not know
if that investment is going to have a return or not. It's like there's
nothing, and you're just chilling because you are investing. Just
like last time regarding what happened with the investment
schemes, which is something unbelievable since it has a huge
return. Mostly, in investments, it does not give returns that turn
out times four or five times. It has percentages like 1.5. If you are
going to put money in a bank, then it will be your investment in
which it will be used rotationally. (Respondent 9)

However, some people would not risk their money just to gain an

increase in their finances since they prioritize the assurance of having their

money safe than having it resting in companies that is not reliable. They are

cautious about who or what company they are going to invest and where the

money would go after investing. Some of the respondents definitely think that

it is better not to invest rather than lose their money because of investments.

“I play safe sometimes, so that is why today I'm not really putting
something, money, or anything, or purchasing of capital, or ano
ba yan, because sometimes I really believe na baka there's no
return of investment. So, usually I have a confidence in the return
of investment kapag close ko and then government sya. Pag
government, of course, there's a return of investment because
every now and then tax are always flowing into the national
income, so I mean government could really suffice that need. Pag
nag invest ka sa government kasi may malaking chance na
talagang government guaranteed na mag return of investment.
Pero kung sa outside, sa company papahiram ka lang or bangko,
bangko siguro because bangko you can divide the burden of
paying the debt, so siguro pwede.” I play safe sometimes, so that
is why today I'm not really putting something, money, or anything,
or purchasing of capital, or something like that because
sometimes I really believe that maybe there is no return of
investment. So, usually, I have confidence in the return of
investment if it is someone who is close to me, and if it's the
government. If it is the government, of course, there's a return of
investment because every now and then, the tax is always
flowing into the national income, so government could really
suffice that need. If you invested in the government, there is a big
chance that it is government guaranteed that it will have a return
of investment. But if it’s outside, borrowing in the company or the
bank because you can divide the burden of paying the debt, so
maybe it is possible. (Respondent 2)
 47

“No, like what I’ve said no, I am not risk taker. Risk taker ko in
some things but in money man gud kailangan man gud nato siya
i-keep. Because kung mag risk ka like what i've said, katong mga
scheme gud na mga Kapa, in the near future ikaw lang man
gihapon ang mag regret tapos wala gihapon siya nag grow. Dali
lang ng kwarta sa imoha, na atik ka nila dali lang, pero in the next
future or in the next day wala na sila ma-tiway napud imong
money.” No, like what I've said, no, I am not a risk-taker. I am a
risk-taker in some things, but when it comes to money, it needs
to be kept. Because if you are going to take a risk like what I've
said, those schemes like the Kapa and such, in the near future,
you're the one who is going to regret and then your money would
still not grow. You can have easy money, you were fooled easily,
and in the future or the next day they are gone, and your money
was also gone too. (Respondent 8)

"Personally, I am a very skeptic person. I don't really believe in

so many things. I am open to investing maybe after I am secured
with what I have saved, so I have to save first before I have to
invest, I have to be feel secured on my savings before I have to
invest. And before I invest, I am a very skeptic person, so I have
to investigate, know the background of the company I'm going to
invest." (Respondent 1)

“Pero huna-hunaon lang na kung kani ba siya na investment is

maka tabang ba gyud siya, kanang taas gud ang win nga portion
kaysa sa lose ana gud kay lisod na kung mag participate diay ka
ana tapos kana diay siya nga investment kay fail diay like katong
nahitabo atong sa mga Regin and all.” But just think carefully if
that investment would really help you if they win portion is greater
than the loss of the investment because it's quite conflicting if you
are going to participate in that investment and then it will fail like
what happened with Regin and all those investments.
(Respondent 9)

Based on Chen (2018), risk tolerance is a significant part of investing,

where investors have a level of inconstancy and a willingness to grasp

investment returns. In addition, it is important to have a sensible

comprehension of your own capacity and ability for an individual to manage

fluctuations in the estimation of the values in their investment. Thus, an

individual must take the fact that when it comes to investing, it means that you

are also going to take part in the risks of the investments.

 48

Endurance. According to Cambridge Dictionary (n.d.), endurance is “the

ability to keep doing something difficult, unpleasant, or painful for a long time."

Endurance in investment would mean that if an individual is going to invest, he

or she must bear and take the consequences of participating in an investment.

Nearly all of the respondents are willing to wait for their investments to ripe and

grow.

“I'm tolerant about that (dealing with your investment) because

the more you wait, I guess the more return of investment gets
stuck up. The more months, the more years that you saved,
meaning the more you are expecting for something bigger
(money) for that investment.” (Respondent 2)

“Wala may investment na orada-orada kay kung naay orada-

orada na money dayun (Kapa, Rigen) it will act na dili siya legal.
So, ang money man jud naga grow man jud na, dili man siya
agad-agad mag grow. Yes, I am tolerate and I can wait para mag
grow akoang finance or money sa isa ka investment.” There is
no investment that has immediate returns, and if there is, then it
will act as something that is not legal. So, money really increases,
but it does not grow immediately. Yes, I am tolerant, and I can
wait for my finance or money in an investment. (Respondent 8)

“Because sometimes when you wait, it yields more income, so

there is gold in waiting for the investment to ripe.” (Respondent
6)

"Say, for instance, shares of stock, because shares of stock you

know they don't really go up the next day, the week from now, a
month from now. Some of the shares of stock you will realize the
increase or your profit five years from now, ten years from now.
So, I’m willing to wait.” (Respondent 7)

“Kay walay dali na butang na makuha in just one snap.” Because

there is no such easy thing that you can get in just one snap.
(Respondent 4)

“Kasi gina hulat gyud nako siya kay kabalo man gud ko na
madawat gyud nako ni siya kani nga investment kay daghan na
ug proof ba na kanang kani siya na mga investment dili siya atik.”
Because I really wait for that investment since I already know that
I can really receive the returns of that investment because there
are proofs regarding that investment not being a fraud.
(Respondent 9)
 49

Risk is a great part of an investment, and that having a time horizon or

waiting for the investment is quite a tedious task. Moreover, if you are investing,

you need to endure the very long process just to have your return.

Conclusion

After the thorough evaluation of results, the researchers determined the

following conclusions:

In the quantitative results, data shows that there is a moderately high

level of financial literacy in terms of First, financial attitude, showing that having

the right attitude in managing money can affect your way of investing, thus, a

good investment. Second, financial behavior, which means that the financial

well-being of an individual depends on their behavior. And third, financial

knowledge, indicating that it can help individuals in processing economic

information and make decisions that are in line with their financial resources.

Moreover, in terms of time horizon and risk tolerance, the level of

investment participation is moderately low and high, respectively. Results show

that being financially literate does not mean that you have a high time horizon.

And on the other hand, it shows that the respondents are willing to take risks

just to have an increase in income.

In addition, the r-value is moderately high and that it is positive, which

means that financial literacy and investment participation have a direct

relationship. Since the p-value is equal to the alpha value, it means that the

null hypothesis should be rejected. Thus, there is a significant relationship

between the two variables.

 50

Lastly, for the qualitative result, three themes were analyzed through

thematic analysis which is managing your money that has two sub-themes,

knowledge and understanding; provide benefits for future purposes that has

three sub-themes which are retirement, accumulate wealth, specific goals; and

risks give you more return which has two sub-themes, tolerance, and

endurance.

Based on the analysis, in the theme "managing your money," it shows

that the respondents can define financial literacy and that some of them are

practicing it. The theme “provide benefits for future purposes” shows that the

respondents' motivation for investing is because of the benefits behind it. And

the last theme which was “risks give you more return” shows that risk is part of

investing and that if you are going to invest, you should take part in it, however,

there are some respondents who could not risk their money and that it is better

not to invest than lose their hard-earned cash.

Recommendation

The proponents have proven that financial literacy has a significant

relationship with investment participation. Furthermore, to support this claim,

the proponents would recommend to beneficiaries the following:

First, the proponents would recommend the students to give importance

to their business-related subjects, for it would help them in becoming financially

literate shortly when they have a stable job and income that will enable them

to participate in investments.

Second, for the employees and potential investors, the proponents

would recommend them to first have an awareness and seminar before

 51

investing for this can give them significant information on how they can invest

their money in a financial literate manner and give them a guide in decision

making when it comes to their finances.

Lastly, the proponents would also recommend future researchers to

conduct further study involved by a bigger sample or population and to conduct

the study with respondents from different institutions.

 52

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 57

FINANCIAL LITERACY AND INVESTMENT PARTICIPATION

A Research Paper
Presented to the Faculty of the Senior High School
University of Mindanao, Davao City

________________________________________________

In Partial Fulfillment of the Requirements

In APP5 (Mixed Method Research)
2nd semester, SY 2019–2020

___________________________________

Bedia, Ray Anne F.

Gayunan, Charmenil M.
Horga, Jonnell M.
Huinda, Joy Marie P.
Lumanog, Mia Jemimah E.

March 2020
58