The Philippine central bank’s new hero is Raj Hortaleza, aged 11.
While most of his friends trooped to shopping malls to spend their Christmas money last holidays, Raj put the $57 he received in the bank, adding to the $2 per week allowance he’s been saving.
“My parents always tell me not to spend too much on unnecessary things,” he said. “In case of an emergency, I can use it for something more important.”
Bangko Sentral ng Pilipinas wants more like him to raise one of the lowest savings rates in Asia and help sustain the nation’s economic growth. Six out of 10 Filipino adults don’t put money aside and most of those who do keep it in piggy banks or safe boxes, according to the central bank. So it is targeting kids to try to instill the saving habit.
“It’s strategic,” said Governor Nestor Espenilla, 59, who championed inclusion programmes such as the use of electronic wallets and better credit access for farmers and rural entrepreneurs when he was a central bank deputy. “Preferences that are formed in early life stay into adulthood.”
The central bank has expanded the availability of deposit accounts for children and teenagers, published comic books and made lesson plans about financial planning for high-school teachers.
As a proportion of its population, the Philippines has the most adults without a deposit account in South East Asia, according to World Bank estimates. It’s a deficit which the IMF says the nation needs to narrow to sustain over 6 per cent growth, among the world’s fastest.
In the past, most Filipinos were subsistence farmers with little spare cash to save. But the country has thrown off its mantle of “Asia’s sick man” and strong domestic consumption has kept economic growth fizzing. A steady flow of funds from an outsourcing boom, record-low interest rates, and Philippine workers abroad sending money home have helped raise disposable incomes and lifted at least 2 million people out of poverty this decade, according to World Bank estimates.
“It’s been proven that Filipinos don’t plan finances because they weren’t taught about it,” said Alvin Ang, an economics professor at Ateneo de Manila University who has studied how households save and invest. “Traits of financial planning - even just saving - are things that are acquired from parents or elders.”
Mr Ang said in many regions of the country, people historically have relied on community support to survive and the areas that have the strongest links to savings are the ones prone to major natural disasters such as typhoons or volcanic eruptions.
A key to the success of the central bank drive will be to ensure those who are educating the children also save, Mr Ang said. “You can’t teach about saving if you don’t save,” he said. “It’s easy to say, but it’s hard to do.”
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Policymakers last year raised the age limit to 19 years from 12 years for a savings account that can be opened with just a $2 deposit. The product, known locally as “Kiddie Accounts” was first unveiled nationally in 2011 and now has about 1.4 million accounts, central bank data show. Together, they contain about $577 million, a total that’s risen by almost one third in the past three years.
Developing financial management skills at an early age lessens social and financial vulnerability and reduces the risk of poverty, according to the United Nations. More than two fifths of the 107 million Filipinos will be below the age of 20 at the end of 2018, the government statistics agency estimates. That makes it one of the youngest countries in Asia.
For banks such as BDO Unibank, the nation’s biggest lender by assets, signing up young savers not only increases the capital available for investment in future, but also their customer base. Parents can open a Junior Saver account for kids from 0-12 years old with as little as 100 pesos (Dh7) and the deposits start earning interest upon reaching 2,000 pesos.
“These kids will be the next generation of customers who provide loyalty to the bank,” BDO said. “We want to be there starting from youth to adult life.” The bank said it uses communication channels such as its website, Facebook, ATMs and branches to drive awareness of its Junior Savers accounts.
This year, the central bank will almost triple the number of its resource centres around the country to 285. At these venues, you can find graphic novels, guides and books discussing savings and economic matters. In February, the bank released the third of a series of comic books explaining financial concepts through the story of fictional teenagers David and Milo. A phone app and computer game for teenagers are being considered for next year.
Young Raj for one has got the message. He wants to be an entrepreneur or a lawyer and he’s already wondering how to make his savings work a little harder.
“I heard that there are products where you can leave money and it will earn. I’d like to know more about that.”
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
EA Sports FC 25
Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S
Rating: 3.5/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
MATCH INFO
Day 2 at Mount Maunganui
England 353
Stokes 91, Denly 74, Southee 4-88
New Zealand 144-4
Williamson 51, S Curran 2-28
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Roll of honour
Who has won what so far in the West Asia Premiership season?
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
West Asia Cup - Winners: Bahrain; Runners up: Dubai Exiles
West Asia Trophy - Winners: Dubai Hurricanes; Runners up: DSC Eagles
Final West Asia Premiership standings - 1. Jebel Ali Dragons; 2. Abu Dhabi Harlequins; 3. Bahrain; 4. Dubai Exiles; 5. Dubai Hurricanes; 6. DSC Eagles; 7. Abu Dhabi Saracens
Fixture (UAE Premiership final) - Friday, April 13, Al Ain – Dubai Exiles v Abu Dhabi Harlequins
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Federer's 19 grand slam titles
Australian Open (5 titles) - 2004 bt Marat Safin; 2006 bt Marcos Baghdatis; 2007 bt Fernando Gonzalez; 2010 bt Andy Murray; 2017 bt Rafael Nadal
French Open (1 title) - 2009 bt Robin Soderling
Wimbledon (8 titles) - 2003 bt Mark Philippoussis; 2004 bt Andy Roddick; 2005 bt Andy Roddick; 2006 bt Rafael Nadal; 2007 bt Rafael Nadal; 2009 bt Andy Roddick; 2012 bt Andy Murray; 2017 bt Marin Cilic
US Open (5 titles) - 2004 bt Lleyton Hewitt; 2005 bt Andre Agassi; 2006 bt Andy Roddick; 2007 bt Novak Djokovic; 2008 bt Andy Murray
UAE currency: the story behind the money in your pockets
Company profile
Company: Eighty6
Date started: October 2021
Founders: Abdul Kader Saadi and Anwar Nusseibeh
Based: Dubai, UAE
Sector: Hospitality
Size: 25 employees
Funding stage: Pre-series A
Investment: $1 million
Investors: Seed funding, angel investors
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
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French Touch
Carla Bruni
(Verve)
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)