People's Domain

The Rise of Financial Literacy

In this age of Google and Facebook, you search about financial literacy and this is what it can offer to you – “it is a possession of knowledge and understanding of financial matters, in particular, personal finance.” Literacy on financial matters entails having knowledge about making decisions on personal property, investment, insurance, retirement and savings.

The advocacy and campaigns effort by Sun Life of Canada – Philippines on financial freedom is instrumental in the promotion and popularization of financial literacy in this part of the world. The institution holds a 150-year history in the Philippines which started in 1895 when it first introduced life insurance in the country.

The campaigns effort effectively employed a range of brand makers like TV talk show host Paolo Bediones, musician Kevyn Lettau, small and medium entrepreneur advocate, and now senator Bam Aquino, basketball star James Yap, and Piolo Pascual, who now stands as the brand ambassador for financial freedom campaign #LiveFreePH.

Through the years, the personalities who acted either as brand pushers of a campaign or as brand ambassador of the company, were helpful in bringing to public awareness what financial literacy is all about by offering the opportunity to attend public discussions about financial management and interact with financial advisors.

These encounters slices broad concepts familiar only in the finance sector into bite sizes facilitating improved understanding for Filipinos who intend to internalize its importance to daily life.

Financial literacy, however, is not a pretty new concept. It goes as far back as 200 years and many of us stood as mute witness of its gradual rise to significance. Thanks to Sun Life from my end, but its development was driven by the vibrant financial education movement and which later found its way into legislation and government programs.

The first recorded effort on the need for financial literacy was initiated by John Adams when he wrote a letter to Thomas Jefferson in August 23, 1787, saying: “All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.”

Fast forward to 1914. After the Smith-Lever Act was passed in the United States which created the Cooperative Extension Service, financial literacy and skills slowly became part of the education effort. The Smith-Lever Act integrated financial literacy as part of the learning experiences that would develop skills at home, in the farm and in communities across United States.

Since then, financial literacy had become part of the effort for public education manifesting into several task forces, survey and research undertaken for its purpose. Eventually, laws were passed for its institutionalization.

For a little over 100 years, many countries have contributed in writing the history of financial literacy. From the United States and Guam, financial literacy penetrated into government consciousness and with its importance revealed in many different efforts by various countries from Russia, United Kingdom, Canada, Australia, India, Pakistan, Sri Lanka, Uganda, Namibia, Singapore, Japan, Indonesia and many more in Asia.

In 2003, the United States government embarked on the campaign by establishing the Financial Literacy and Education Commission, an agency responsible in assisting individuals who intend to gain financial literacy.

In Canada, the land where Sun Life Financial originated as a Sun Life Assurance Company of Canada; its government established the Financial Literacy Month only in November 2009 through the Financial Consumer Agency of Canada and the Financial Literacy Action Group.

On the other hand, the Philippines is catching up to contribute in the narrative of financial literacy after House Bill No. 5603 and Senate Bill No. 2212 was passed as Republic Act 10679 and signed into law by President Benigno C. Aquino III last August 27 this year. The law is now known as an “Act Promoting Entrepreneurship and Financial Education Among Filipino Youth.”

The RA 10679 declared that it is now “the policy of the State to promote the sustained development of young Filipinos whose aptitude and skill in the field of finance and entrepreneurship shall be encouraged and honed through education and specialized training programs. Towards this end, the State shall establish, maintain, and support a complete, adequate, and integrated system of education and training to encourage the entrepreneurial spirit among our youth as well as support and promote the growth of young entrepreneurs nationwide.”

With the passage of the law, entrepreneurship and financial literacy program will soon find its way into the curriculum of basic education in the country. Given its 150 years of presence in this archipelago, Sun Life Financial – Philippines will have more reason to step up campaign for financial literacy among Filipinos with the hope that more and more people will attain knowledge on how to adequately manage personal resources in order to enjoy financial freedom.

As a leading international financial services organization today, it requires no further elaboration about Sun Life’s institutional contribution on the rise of financial literacy from its humble origin in the United States into what it is today.###

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