Republic of the Philippines
Tarlac State University
College of Education
A.Y. 2020-2021
Financial literacy
- Save - Assets - Loan - Budget –
Mortagage – Credit – Insurance –
Investment – Funds
WHAT IS FINANCIAL LITERACY?
According to Kenton (2020), “Financial
literacy is the ability to understand and
effectively apply various financial skills,
including personal financial management,
budgeting, and investing”.
The basic tenet of Financial Literacy
*proper budget distribution
*track spending
*effectively pay off debt
*having a retirement plan
The National Endowment for financial
Education defines financial literacy as “the
ability to read, analyze, manage, and
communicate about the personal financial
conditions that affect material well-being”
(Alana and Ignacio,2019).
Financial Literacy is the key in attaining
financial stability through proper financial
decision making in terms of budgeting,
saving, banking, paying off depts,
insurance, and tax and retirement planning.
Hastings, et al. (2013) as cited by Alata
and Ignacio(2019) defined financial
literacy as
 knowledge of financial products
(e.g., a stock vs. a bond, fixed vs.
adjustable-rate mortgage);
 knowledge of financial concepts
(e.g., inflation, compounding,
diversification, credit scores);
 having the mathematical skills or
numeracy necessary for effective
financial decision making;
 being engaged in certain activities
such as financial planning
1. Knowledge of Financial Concepts
Types of Financial Literacy
Banking and cash Insurance
Credits and loans Investments
Fixed rate Mortgage
A fixed-rate mortgage charges a set rate of
interest that remains unchanged throughout
the life of the loan.
Adjustable rate Mortgage
The interest rate for an adjustable-rate
mortgage is a variable one. The initial
interest rate on an ARM is set below the
market rate on a comparable fixed-rate loan,
and then the rate rises as time goes on.
adjustable rate mortgage terminologies
Adjustable Frequency - Adjustable Indexes
- Margin - Caps - Ceiling
Stock
Stocks represent partial ownership, or
equity, in a company. Stocks are also
known as corporate stock, common stock,
corporate shares, equity shares and equity
securities.
 Republic of the Philippines
Tarlac State University
College of Education
A.Y. 2020-2021
Bond
Bonds are a loan from you to a company or
government. Keeping a bond for the full
duration is known as “holding until
maturity.”
2. Knowledge of Financial Concepts
Inflation the economic term that measures
these changes in the economic activity is
called inflation. The general increase in
prices of goods and services in a country.
Deflation the general decline of the price
level of goods and services. when consumer
and assets prices decrease over time and
purchasing power increases.
Compounding
compounding refers to generating earnings
from previous earnings.
Diversification
a risk management strategy that mixes a
wide variety of investments within a
portfolio.
Credit Score
It’s often used by lenders to determine how
much of a risk it is to give you a loan.
Credit bureaus calculate scores based on
five criteria
Credit Payment History
The amount owned or credit utilization ratio
Length of Types of credit used
credit history
New credit
Factors that are excluded from your
credit score
Income – Assets – Age – Gender –
Affiliation - Non- credit bank information
3. having the mathematical skills or
numeracy necessary for effective
financial decision making
To address the growing demand for more
investments in the country, the financial
industry advises that Filipinos should save
first and spend whatever is left after putting
their savings aside.
Saving is imperative to improve individual
and societal welfare.
4. being engaged in certain activities such
as financial planning
Financial planning involves educating
Filipinos on the different types of goals that
they should set:
 short-term
 medium-term
 long-term
Financial education should be the best tool
to effectively come up with better financial
outcomes.
The Economic and Financial Literacy
Act
The Philippine Government recognizes the
role of financial literacy in honing
individuals and its contribution in the
betterment of the society. In line with this is
the passing of the Republic Act no. 10922
also known as the Economic and
Financial Literacy Act
 Republic of the Philippines
Tarlac State University
College of Education
A.Y. 2020-2021
SECTION 1. Title
This Act shall be known as the “Economic
and Financial Literacy Act”.
SECTION 2. Declaration of Policy
It is declared the policy of the State to
develop national consciousness on
economic and financial literacy by declaring
the second week of November of every year
as “Economic and Financial Literacy
Week”.
SECTION 3. Participating Government
Agencies
To ensure meaningful observance of the
Economic and Financial Literacy Week as
herein declared, the National Economic and
Development Authority (NEDA) shall lead
the participation of government agencies
and instrumentalities during the Economic
and Financial Literacy Week.
SECTION 4. Economic and Financial
Literacy of Students and the Youth
To improve the economic and financial
literacy of students and the youth, all public
and private elementary and secondary
schools under the DepEd, the state and
private colleges and universities under the
CHED, the Technical Education and Skills
Development Authority (TESDA), and the
NYC, in coordination with the NEDA.
SECTION 5. Communication Arm
The Philippine Information Agency (PIA)
and the Presidential Communications
Development and Strategic Planning Office
(PCDSPO) are hereby mandated to allot
airtime for programs and produce and
disseminate printed and online materials for
economic and financial literacy awareness
and enhancement.
SECTION 6. Private Sector Participation
The NEDA, in coordination with the
Philippine Economic Society (PES), and in
partnership with other academic and
professional institutions, shall lead and
encourage the participation of the private
sector and civil society during the Economic
and Financial Literacy Week.
SECTION 7. Separability Clause
If any provision or part hereof is held
invalid or unconstitutional, the remainder of
the law or the provision not otherwise
affected shall remain valid and subsisting.
SECTION 8. Repealing Clause
All laws, decrees, orders, rules and
stent with this Act are hereby repealed or
modified accordingly.
SECTION 9. Effectivity
This Act shall take effect fifteen (15) days
after its publication in the Official Gazette
or in a newspaper of general circulation
The benefits of being financial literate
 The ability to recognize a bad
financial deal
 The lowest cost you pay for your
bills since you make fewer financial
mistakes
 The peace of mind that comes from
knowing you planning for retirement
MONEY PERSONALITY TYPES
 The Compulsive Saver
afraid of losing money
 The Compulsive Spender
Spend money on uneccessary things
 The Compulsive Moneymaker
Spend their energy in making more
money
 The Indifferent-to-money
They rarely think about money.
 The Saver Splurger
 Republic of the Philippines
Tarlac State University
College of Education
A.Y. 2020-2021

Shared common traits between saver HOW TO DEVELOP FINANCIAL

and spender LITERACY?
 The Gambler 1. Become familiar with your household
They gamble their money to escape finances
boredom. 2. Set financial goals
 The Worrier 3. Develop a budget and stick to it
They are lack of confidence in their 4. Discuss finances openly and honestly and
abilities to achieve financial freedom stay involved
FINANCIAL LITERACY IN THE 5. Learn the difference between good and
PHILIPPINES bad debt
6. Avoid common money mistakes
LAWMAKER PUSHES FOR FINANCIAL management
LITERACY AMONG FILIPINO YOUTH 7. Educate yourself on finances
8. Pass on the knowledge
AAMBIS - OWA Party- List Representative WHAT IS ASSET?
Sharon Garin, files House of An asset is a resource with economic value
Representative Bill 9058, otherwise known that an individual, corporation, or country
as Savings and Investments Act of 2021. owns or controls with the expectation that it
IMPORTANCE OF FINANCIAL will provide a future benefit.
LITERACY FOR FILIPINOS WHAT IS LIABILITY
1. Filipinos are becoming financially- An asset is a resource with economic value
dependent to others. that an individual, corporation, or country
2. People have no idea of savings and owns or controls with the expectation that it
insurance. will provide a future benefit.
3. Most people are highly in debt.
4. Only few people know how and where to The rich class is the only class which
invest their money. prioritizes
5. To make every Filipino financially assets more than liabilities and that makes
responsible. them rich! Kiyosaki(2013)
FINANCIAL PLANNING
SHORT TERM GOAL
Something you want to do in the near
future.
MIDTERM GOAL
bridge between short term and long term
goal
LONG TERM GOAL
Something you want to do further in the
future.