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According to Lusardi & Mitchell (2007; as cited in Andrew & Linawati, 2014:
35), financial literacy is financial knowledge and an ability to apply the knowledge
(knowledge and ability) that aim to achieve prosperity. Similar to Maulani (2016: 18).
Financial literacy is a series of financial knowledge that is beneficial to improve one’s
skills in managing finances, thus, financial problems can be avoided. In addition,
Lusardi & Tufano (2009; as cited in Erawati & Susanti, 2017: 2) state that financial
literacy is a main factor which determines individuals’ behavior because it has an
important implication for financial behavior. Furthermore, Bhushan & Medury (2013:
156) states that saving behavior significantly influenced by financial literacy. The
higher individual’s financial literacy will have an impact on better saving behavior.
FINANCIAL LITERACY and BUYIING BEHAVIOR
Theodora & Marti'ah (2016) in general financial literacy is very important to help someone
manage their money independently and make appropriate financial planning. Yap,
Komalasari & Hadiansah (2016) good financial literacy can shape a person's financial
attitude, which after that will determine how they manage financial goods through decisions
and actions. The existence of an adequate understanding of an aspect certainly helps a person
in choosing the best alternative in making a decision and behaving (Humaira & Sagoro,
2018).
The low knowledge of financial institutions will have an impact on the low interest of society
to invest their money (Laily, 2013). Philippine Gross Domestic Product (GDP) posted an
annual growth of 5.6 percent in the fourth quarter of 2023,
According to Lusardi & Mitchell (2007; as cited in Andrew & Linawati, 2014: 35), financial
literacy is financial knowledge and an ability to apply the knowledge (knowledge and ability)
that aim to achieve prosperity. Similar to Maulani (2016: 18). Financial literacy is a series of
financial knowledge that is beneficial to improve one’s skills in managing finances, thus,
financial problems can be avoided. In addition, Lusardi & Tufano (2009; as cited in Erawati
& Susanti, 2017: 2) state that financial literacy is a main factor which determines individuals’
behavior because it has an important implication for financial behavior. Furthermore,
Bhushan & Medury (2013: 156) states that saving behavior significantly influenced by
financial literacy. The higher individual’s financial literacy will have an impact on better
saving behavior.
According to Desello, Jared. (2022) surveyed on basic financial literacy questions, only 2 in
10 Filipinos gained perfect scores, while 7 in 10 correctly answered at least half of the
questions. Only 42 % of adults correctly identified inflation’s effect on purchasing power in
2021, and the World Bank found that only 25% of adult Filipinos are knowledgeable on basic
financial concepts.
This research looked into the 2019 Financial Inclusion Survey (FIS) published by the central
bank of the Philippines (in Filipino: Bangko Sentral ng Pilipinas or BSP) to profile financial
literacy in the country, and to measure the impact of financial literacy scores to owning an
investment or an insurance account. Our calculations have shown that respondents who are
female, are aged 21-40 years old, have at least a college education, and belonging to a higher
socioeconomic class acquired higher test scores when compared to their respective cohorts.
Subsequently, higher financial literacy scores had a statistically significant positive impact on
the probability of account ownership of insurance or investments. The respondents' awareness
of BSP's financial programs, receiving international remittance, and being an internet user
likewise demonstrated this positive effect. This study concludes that financial literacy and
knowledge positively contribute towards owning insurance or investments. In this sense,
policy can intervene and encourage greater financial education to the public through seminars
or programs, and affect positive change in financial behavior and attitudes such as owning
investments or insurance.