Team Sauz Body PDF

PAMANTASAN NG LUNGSOD NG MAYNILA
(University of the City of Manila)

College of Business and Management 1
Department of Finance
CHAPTER I
Introduction
This study deals with the relationship of financial literacy to the behavior of the
respondents towards consumption, investment, borrowing, savings and risk
management. Specifically, the researchers would seek answers to find the behavior of
the respondents on marketable securities, non-marketable securities and physical assets.
Through this study, the researchers would want to know if the level of financial literacy
has an impact on the way the respondents deal with their income allocation as well as
the significance of their demographic profile when it comes to consumption, investment,
borrowing, savings and risk management.
This study will assess the respondents behavior and will measure their financial
literacy to find how well they use off their monthly disposable income. This study also
aims to know if the level of the respondents literacy could affect their behavior and
decision making in terms of personal investment. This research will not only assess the
present behavior of the respondents but also the behavior of the respondents for their
future needs. The study will be beneficial for the respondents because it will give them an
overview of their personal investment behavior. This study will also give
recommendations that will fit the majority of respondents investment behavior and that
will raise their financial awareness.

Background of the Study
Income earning is a primary motivation of an individual employee to meet his/her
needs and wants. Even if there are different factors that could affect the way employee
allocate their disposable income, he/she still look forward to gains and savings for the
future.
Ideally, the first thing an individual does to his disposable income is to identify the
amount needed for his consumption. Consumption refers to the utilization of limited
resources. It is the money spent on goods and services that yields to satisfaction. Of this
amount, the part of income that is not consumed is savings. Thus, disposable income is
a determinant of savings and consumption.
Savings on the other hand is related to investment. Savings can be an investment
if a person makes a decision to forego the use of money saved for a period of time, in the
hope of earning a return. However, not all investments originate from savings (Mehta, JK,
1961). There are some people who borrow for investment. This is why investment is the
employment of funds with the purpose of earning additional income or growth in value
(NCAER, 1964).
Every individuals mindset differs on how he/she decides which particular
investment avenue to choose. Each persons methodology varies according to his/her
risk appetite, investment objective, and his/her literacy towards the chosen investment.
An individuals ability to invest is can also be affected by his/her reason for wanting to
invest and how much of his/her disposable income he/she wants to allocate for
investment.
In various empirical studies, it has been found that information, being an important
factor on taking the decision to invest, influences individuals on his/her choice of
investment and later on also influences how he/she acts after investment (Kasilingam &
Jayabal, 2008). With these, it could be inferred that the investment pattern and saving
habits of the employee is determined by his/her expectations from various avenues and
their level of literacy, as well as the assessment of different investment opportunities
Being financially literate not only guides an individual to properly use off his/her
disposable income, but also raises awareness on the importance of savings for the
purpose of investment. According to Puneet (2014), financial literacy helps to improve the
individuals level of understanding of financial matters which enables them to process
financial information and make in-formed decisions about ones finances. Financial
literacy is more useful for income earners because it can guide them on their decision-
making that involves personal finance such as savings, borrowings, investing and
retirement planning. It is difficult for a common man to understand the risk associated with
various financial products; hence to understand a certain level of financial literacy is
required. The level of literacy of an individual will have an impact on his behavior towards
personal investment.
In the Philippines, investment is one matter that the Filipino people should be
engaged in, but, it is not in the common Filipinos priorities. This is a sad statistic as
investment is something that is procured which will gain in value in the future. As most of
the studies suggest, majority of the Filipinos are not involved in investment. They tend to
spend all of their disposable income for present consumption and failed to allocate for
their future unexpected needs. Therefore, investment is one of the factors Filipinos need
to overcome poverty and to ensure financial wellness.
Many people do not know how to invest or save their money properly because of
their little knowledge about financing their money; this financial illiteracy causes people
to experience bankruptcy (Mitchelle, 2010). It is a sobering fact that financial illiteracy is
the main cause why people tend not to invest. The lack of awareness on the capital
market sets great barriers on the access to financial freedom in the future. With proper
knowledge and skills, Filipinos will be capable of inclining their economic status through
investments. Literacy in money matters aids in improving the quality of financial services
and contribute to the economic growth and development of a country (Puneet, 2014).This
study aims to assess the behaviors of employees toward personal investment. Thus, the
researchers would want to know if the employees are regular savers and investors, as
well as if there are the significant differences in their financial literacy and behavior.
Furthermore, the researchers narrowed down their study to examine the behaviors
the employees of City of Manila as the target market, to know if they invest and if they
invest, how they respond to and handle their investment. Also, this study aims to know
the different factors affecting these employees engagement in investment such as having
less income, being financially illiterate, etc. Through this study, the researchers can
suggest ways on how these employees can improve their financial knowledge because
people who increase their financial knowledge also increase their ability and confidence
to make quality financial decisions; subsequently, reduce financial problems.
It is interesting to know if employees of the City Government of Manila have other
money streams, how they save money, and how they engage in investment. In this study,
the researchers will identify if the employees are financially literate, especially how they
respond to and handle investment, considering they are government employees. The
study also aims to identify if their income is budgeted even before they receive their
salary, just like how the government budgets the public fund for public use before they
release it. Being financially literate is nonsense if one does not have enough money to
apply it to.
In line with these, the researchers want to know if the demographic factors of
investors such as age, sex, number of dependents, monthly disposable income and
position or salary grade have much significance in the development of the employees
behaviors on personal investment.
Finally, this study aims to understand the behavior of specific group of people,
employees of City Government of Manila, towards personal investment. Through the

course of the study, information can be shared for current investors and potential
investors. To aid the possible improvement of financial behavior of these employees
behavior, the researchers have to identify their savings, consumption, investments and
borrowings. To facilitate this study, the research team has incorporated a questionnaire
survey to be used for all participating employees of the City of Manila.
Statement of the Problem
This study aims to determine the behavior of selected employees of the City
Government of Manila towards personal investment. Specifically, this sought answers to
the following questions:
1. What is the profile of selected employees of the City Government of Manila
according to:
a. Age;
b. sex;
c. Civil status;
d. Position/ Salary Grade;
e. Monthly Income; and
f. Number of Dependents?
2. What is level of financial literacy of the selected employees of the City
Government of Manila?
3. How the respondents allocate their disposable monthly income according
to their demographic profile in terms of:
a. Food;
b. Shelter;
c. Transportation Expense;
d. Communication Expense;
e. Utilities Expense;
f. Health;
g. Education;
h. Investment;
i. Luxury Spending; and
j. Leisure?
4. Are there significant differences on the respondents allocation of their
disposable monthly income in terms of:
a. Age;
b. Sex;
c. Civil status;
d. Position/Salary grade;
e. Monthly income; and
f. Number of dependents?
5. What are the respondents behavior in terms of:
a. Consumption;
b. Borrowing;
c. Savings;
d. Investment; and
e. Risk Management?
6. Are there significant relationships between the respondents financial
literacy and their behavior in terms of:
a. Consumption;
b. Borrowing;
c. Savings;
d. Investment; and
e. Risk Management?
7. What are the respondents behavior towards the following investment
avenues:
a. Marketable Securities;
b. Non-marketable Securities; and
c. Physical Assets?
8. Are there significant relationships between the respondents financial
literacy and their behavior towards the following investment avenues:
a. Marketable Securities;
b. Non-marketable Securities; and
c. Physical Assets?
Objectives of the Study
This study aims to determine the behavior of the selected employees of the City
Government of Manila towards personal investment.
1. To determine the demographic profile of the selected employees of the City
Government of Manila according to age, sex, civil status, occupation, monthly income,
and number of dependents.
2. To determine the level of the respondents financial literacy in terms of
consumption, borrowing, savings, investment and risk management.
3. To get the profile on the allocation of the respondents disposable monthly
income according to food, shelter, transportation expense, communication expense,
utilities expense, health, education, investment, luxury spending and leisure.
4. To establish the significant differences on the respondents allocation of
their disposable monthly income in terms of age, sex, civil status, occupation, monthly
income, and number of dependents.

5. To determine the respondents behavior in terms of consumption,
borrowing, savings, investment and risk management.
6 To determine the significant relationships between the respondents
financial literacy and their behavior in terms of consumption, borrowing, savings,
investment and risk management.
7. To determine the respondents behavior towards marketable securities,
non-marketable securities and physical assets.
8. To establish the significant relationships between the respondents financial
literacy and their behavior towards marketable securities, non-marketable securities and
physical assets.
Hypothesis
The target population of this research work are employees of the City Government
of Manila who are assumed to have high inclination on their financial health. For the
purpose of this study, the following hypotheses have been proposed:
1. There are no significant differences in the respondents allocation of their
monthly disposable income in terms of:
a. Age
b. Sex
c. Civil status
d. Position/salary grade
e. Monthly income
f. Number of dependents
2. There are no significant relationships between the respondents financial literacy
and their behavior in terms of:
a. Consumption
b. Borrowing
c. Savings
d. Investment
e. Risk Management
3. There are no significant relationships between the respondents financial literacy
and their behavior towards the following investment avenues:
a. Marketable Securities
b. Non-marketable Securities
c. Physical Assets
Significance of the Study
This research is conducted to help inform the readers about the different ways
financial literacy can affect the financial decisions of every person and company. A person
can be confident in his financial decisions if he is financially literate. A person who is

financially literate will obviously be more ready to embark in a securities market; in this
regard, the study can inform about the ways a single person can improve in his everyday
living financially. This study can also help institutions on how being financially literate can
be useful and helpful to a common person as they have the ability to impart their
knowledge and teach less knowledgeable people about personal finance. Thus, financial
literacy is not only important to people; it is also a way for institutions to be a vessel of
financial knowledge.
Specifically, this research is beneficial to the following sectors and parties:
Employees who are not financially literate
This study will benefit the employees who are not financially literate because
through this research, the researchers can suggest different ways a person can improve
his everyday living financially. Moreover, these ways can boost their confidence in making
the right financial decisions in life.
Family of those employees who are not financially literate
This study will benefit the family of an employed person who is not financially
literate, because as the researchers suggest ways on how to improve financial life, it
might result to a good decision making for those people as they embrace their financial
future. This can also strengthen their family relationship if the person who is responsible
will be able to handle his budget very well for the basic needs of his family.
Graduates of Finance Education
The research may serve as a guide for the finance graduates as they take the next
chapter of their lives. As a graduate of finance, it is assumed that they are financially
literate; however, the most important thing is the application of their knowledge to reality
to overcome upcoming challenges specifically, financial challenges. Through this study,
the graduates can be aware of their financial future and help them handle their future
investments properly.
Aspiring Investors
To those people who are willing to take the risk in investing, as they have enough
money, but, are not financially literate. This research could help them make the right
financial decisions and avoid being poor.
Financial Institutions providing investment outlets
Since people are helped by the researchers to know the different ways to improve
their financial life, they will be motivated and confident to invest their money to different
investment outlets. This is beneficial for the financial institutions because they can have
more investors. Moreover, they can attract more investors if they teach willing investors
about financial knowledge which is beneficial for the both parties.

Scope, Limitations and Delimitations
The scope of the study will revolve around the financial literacy and behavior of
the selected employees of the City Government of Manila towards consumption,
borrowing, savings, investment, and risk management, as well as their behavior towards
marketable securities, non-marketable securities, and physical assets as investme nt
avenues. It will also find out the respondents profile according to age, sex, civil status,
position/salary grade, monthly income, and number of dependents. The study will also
discuss how the respondents allocate their disposable monthly income according to food,
shelter, transportation, communication, utilities, health, investment, luxury, and leisure.
Conclusively, the researchers will determine if there are significant differences on the
respondents allocation of disposable monthly income in terms of their demographic
profile. In addition, the researchers will also determine if relationships exist between the
respondents financial literacy and behavior towards consumption, borrowing, savings,
investment, and risk management, as well as towards marketable securities, non-
marketable securities, and physical assets
On the other hand, this study is conducted with limited time and resources. With
the time given to the researchers, the gathering of data, as well as the review of related
studies and literature was conducted only within the span of less than two months. The
researchers could have gathered more related studies and literature if given longer days
to research further in other libraries. In addition, the researchers gathered answers only
from the employees situated at the Manila City Hall and the isolated department located
at Arroceros Street Ermita, Manila because of the time-consuming process of securing
permission from each department to conduct survey and to commute to and from the
departments not located near Manila City Hall.
Further, in the survey questionnaire, the part of financial literacy is limited to
measuring the respondents knowledge through questions that are practical and can be
encountered in their daily lives. It excludes technical, fundamental, and theoretical
questions about finance. The research does not cover the educational attainment of the
respondents nor how they learned about finance. Also, the study does not dwell into who
influences the respondents knowledge and decision in investing and how long they have
been investing. Moreover, the research does not aim to know how long the employees
have been serving the institution, thus the researchers cannot discuss the relationship of
how long the employees have been working and how long they have been investing. The
companies and amount of investment the respondents engage in are not named and
mentioned in this study.

CHAPTER II
Theoretical and Conceptual Framework
This chapter presents related studies and literature that discuss the different ways
people allocate their money for consumption, savings, investment, and borrowings. It also
deliberates their behavior towards personal investment according to their financial
knowledge.
Theoretical Framework
The researchers were inspired by the life of Warren Buffett to conduct this study.
He is known for living a modest lifestyle despite having tremendous wealth. Part of the
reason his wealth has grown to such enormous levels is that he controlled his expenses
and kept his money invested rather than having it spent it frivolously. Do not save what
is left after spending; instead spend what is left after saving and If you buy things you
do not need, soon you will have to sell things you need. These two are Buffets fam ous
quotes on consumption. These quotes provide a simple yet significant meaning about the
behavior of the people towards consumption, which is one of the topics the researchers
of this study aim to understand.
The researchers also drew their study to the Life-Cycle Hypothesis of Franco
Modigliani and his student Richard Brumberg. The hypothesis commenced from the
surveillance that most of the time, income and consumption are not equal on different
stages of their life (Crown, 2002). It studied the spending and saving behavior of the
people on various time of their entire life (Deaton, 2005).
This study also tackles the behavior of the subjects towards investment which is
the focus of the The Profits Theory Investment by Edward Shapiro. His theory states
that the profit is the main source of funds in financing an investment. Investment mainly
depends on the income which in return depends on the profit of the previous investment.
This implies that the higher the profit of the investment, the higher the income of an
individual, the higher he can invest.
Review of Related Literature
Foreign
Consumption
Consumption is the aggregate of all economic activity that does not entail the
design, production and marketing of goods and services. The consumer function devised
by John Maynard Keynes is used to calculate the total consumer spending in an
economy. Consumption according to Keynes is essentially defined as the part of
disposable income that does not go into savings. According to Johnson (2007), whenever
someone is making a decision to buy or not to buy something, there are short term and
long term consequences. In short term, people may able to consume a sandwich, go to
movie or buy some clothes. People also have made a short-term decision to allocate
resources such as time and money, to that acquisition. That purchase may have long -
term benefits and costs. In Al-Jeraisys (2008) viewpoint, the purchase goal is to satisfy
a need or wants of his own or of his family members. In that regard, a distinction is to be
drawn between the consumer and the customer. Whereas, the consumer looks for a
certain products or services to buy, to evaluate and to use it or the customer will buy his
need regularly from a particularly.
A consumers level of involvement is how interested they are in buying and
consuming a product. Low-involvement products are usually inexpensive and pose a low
risk to the buyer if they make a mistake by purchasing them. High-involvement products
carry a high risk to the buyer (Saylor, 2013). Household expenditures as they result from
budget limitations at the one hand and choices based on needs, demand, preferences
etc. on the other may be regarded as manifestations of economic and social inequalities
as well as cultural differences and social distinctions (Mannheim, 2007).
According to Goodwin (2008), people are also often interested in goals such as
self-realization, fairness, freedom, participation, social relations, and ecological balance.
These may be either served by, or in conflict with, their goals as consumers. People also
often get intrinsic satisfaction from working and producing. For many people, work defines
a significant part of their role in society. Work can create and maintain relationships. It
may be a basis for self-respect and a significant part of what gives life interest.
Investment
De Salvo and Baker (1977) mentioned in their book Consumer Finance that
investors have different reasons why they invest. Like planning spending, investments
are also influenced by goals and problems encountered. So people who are planning to
have a family in the future should invest to ensure the college education of their children.
According to Statman (2011), an investor is investing to not be a jail of poverty and have
a financial freedom. He also said in his book that investors who hate risk invest in
insurance or bonds while those who can tolerate higher risk buy lottery tickets. Either way,
they are motivated by the promise of richness in the future. Based on the same book
written by Statman (2011), successful investors are the people who are self-controlled.
They mentally account their expenses to make sure that their expenses are lower than
their income. This is to make sure that they are not saving too little or too much. This is
also to supervise their desire to whether spend or save. On the other hand, if a flexible
budget seems to be constraining, one must at least be able to authorized his employer to
withhold a certain percentage from his pay check each month to be invested to his credi t
union or company stock, if available (Bailard, 1977).
Since finance is concerned with the management of assets, especially of financial
assets and sources of finance used to acquire the assets (Mayo, 2001.). These financial
assets are put in the purpose of gaining income or some value, or it is being invested.
Investings primary objective is to produce income and to preserve capital in the long term
(Moore, n.d.). However, financial plan as well as the investment needs differ from each
person. It may also change from time to time, in relation to the age, financial status, future
plans, risk aversion characteristics and needs (Reilly & Brown, 2011.). Specifically, a life-
cycle assumes that a person tries to maintain a relatively stable standard of living over
the course of his or her lifetime. According to Skinner (2010), that those save at high rates
during their working lives are accustomed to consuming less and therefore do not need
as much for retirement. More profit brings pride while losses inflict regret. Realizing losses
is especially painful because investors give up hope of recouping loses. Investors must
realize gains quickly and procrastinate, in the realization of loses (Statman, 2011). In
addition, Hong (2002) distinguished news watchers, who focus on privately observed
information, and momentum traders, who seek to advantage of a price trend. Both are
subject to bounded rationality, not taking into account all publicly available information.
News watcher focus on information that may spread slowly, giving momentum traders an
opportunity to step in and to trigger an overreaction followed by a reversal. Slow
information diffusion is characteristic of small-cap stocks with low analyst coverage.
In the perception of Brady (2012), income from investment is a difficult task given
the seductive nature of yield and the symmetry of fixed-income investment. The current
market environment wherein the rates are extraordinarily low and both dramatic inflation
and debilitating deflation are possible are among the factors that doesnt make the task
of income investing easier. Also according to Brady (2012), the investors expectations
are the biggest problem in income investing. Studies determined that contrary to
conventional financial advice recommending investment in well diversified portfolios,
some individual investors achieve superior returns by concentrating their investment in a
few stocks. Financial returns in excess of the norm correlate with local stocks, and stocks
with less analyst coverage (Hickman, 2008).
Briands (2013) said that value style of investing, an investors out-of-favor stocks
with low price to earnings and price-to-book value ratios, stocks that the investors
believes are trading below their intrinsic value. Growth style describes an approach to
investing that focuses on high growth stocks. To imply that growth investing is an
investing mistake would be an overstatement. Nonetheless, an investors choice of
growth or value-investing styles may affect the outcome of his or her results. When it
comes to investing, one must be cold and calculating (Winger, n.d).
According to Klein (2009), in a practical matter in business cycle control, it has
often more satisfactory for the state to adopt counter-cyclical measures to maintain an
even flow of investment rather than an even flow of consumption, speaking roughly of the
two as exhausting national product. In many cases it is not politically feasible or desirable
to try to influence personal, household expenditures in a predetermined fashion, but direct
state investment or state support of private investment is a workable alternative only if
public authorities knows such things as the correct timing of their action, the correct
magnitudes involved, and the underlying factors that determine investment decisions.
Financial Literacy and Behavior
Expanding the financial knowledge of employees will also expand their capacity
and confidence to have superior financial decisions and less their financial problems. It
makes the employees to become more focus on work and fewer problems on financial
position according to the article of University of Minnesota on the Benefits of Workplace
Comprehensive Financial Education (2015).
Many people dont know how to invest or save their money properly because of
their little knowledge about financing their money which leads to them into bankruptcy.
According to Mitchelle (2010), ignorance in finance and the lack of belief in financial
markets portray important roles in controlling the involvement of retirement plans. So that,
the employer-sponsored retirement plans requiring their employees to participate and to
have plans. In addition, people with low financial literacy are less likely to invest in stocks
than those who are financially literate. According to Lusardi (2005), there is a link between
financial literacy and retirement planning. Financially literate investors who plan for the
future tend to use formal tools and methods rather than relying on relatives and coworkers
for advice. In addition, the investment success is dependent on planning, wide disparities
in household wealth upon retirement.
While most households know about basic financial concepts such as compound
interest, inflation and time value of money, very few households understand the more
advanced financial concepts often considered necessary for successful investing, such
as the difference between stocks and bonds and the inverse relationship of bond prices
and interest rates and risk diversification (Van Roiji, 2009). Due to lack of knowledge with
the more advanced financial concept, many tend to buy stocks due to wrong reasons.
They may have bought certain stocks because analysts or advisers told them to do so,
not because they did their own research or what they think are suitable.
The characteristics of a winning investment are sustainable competitive
advantage, strong financial metrics, long term free cash flow generation, shareholder
focus and insider ownership (Kaminsky, n.d.).
In relation to the literacy of the investors, there are still some investment mistakes
even smart investors make, it is being overconfident. Investors overconfidence are
evident on their behavior and perception on different investment avenues. There are
investors who underperform appropriate benchmark and another evident thing is the
stock selections of women do not outperform those of men, women produce higher net
returns due to lower turnover. Another situation is that individuals who trade the most,
produced the lowest net returns presumably due to misplaced confidence (Swedroe &
Balaban, n.d.). Loss-averse investors sell high performing investments hoping to recoup
their losses on poor performers but, in fact, achieve the reverse (Barber & Odean, 2007).
Money management is always important for personal finance, but today its more
critical due to the changes of the external environment over the past decades. Even a
college student, a parent with mortgage or senior citizen thinking about retirement, may
experience this kind of situation. If you request other people to level their financial
objectives, being wealthy will surely level high on the record (Boone, 2006). Additionally,
accumulation of wealth is not easy and can be distinguish overnight, and if you are like
other people, you will consider yourself arriving over several years to grow your net worth
according to Koh (n.d).
On the other hand, the fact that most of the executives do have enough income to
live quite well during their entire adult lives, especially during their income-earning years.
The proper use of adequate controls will not prevent from making errors in implementing
personal financial plans (Carrithers, 1975). The making of the choice of which core values
are most important to the person has a significant long-term impact upon the kind of life
he choose. Aside from personal knowledge a person has, personal core values are also
important in making investment decisions (Kiyosaki, 2013). Being engaged in the
investment is all about trust, limited participation in the stock market, particularly among
wealthy investors, are due to lack of trust and fear of being cheated by the participants in
the capital market. The level on how trusting the people are, as well as whether and how
much are they willing to invest are determined by subjective and cultural factors (Guiso,
2010).
Local
Financial Literacy
Financial literacy is not prevalent in the Philippines, which makes it difficult to do
financial planning, and in addition to this, the countrys savings rate is low. According to
Ong (2014), developing a financial future requires having the right money mindset. It
means having the right financial habits which determine ones attitude towards managing
money. The right mind helps one build core values in financial planning. Without it, no
matter how much money he has in the bank, he may eventually end up losing it all. A big
behavior issue is that Filipinos spend much more than they should and save far less than
what they are supposed to (Tiongson, 2013). Many Filipinos do not really know how to
properly invest and they borrow too much. According to Standards & Poors Study in 2015
among the 140 countries, Philippines is one of the 30least financially literate countries.
Only 25% of Filipino adults are aware of basics of managing money (Montecillo, 2015).
Regardless of ones situation in life, may he/she be an ordinary employee or an
outstanding one, he/she needs financial planning. This will enable him to set his/her
priorities so he/she can focus on achieving his/her financial goals. A persons ability to
balance his financial goals with his/her current needs will reflect how financially fit he/she
is and achieving a high level of financial fitness requires continuous learning.
According to the Consumer Finance Survey of the Bangko Sentral ng Pilipinas
(n.d.), there is a need to continue to educate Filipino households on the advantages of

saving in financial institutions and investing in various forms of financial instruments
compared with traditional sources of financing and investment. The respondents
investments in other financial instruments are small, if not negligible, thus highlighting the
need for greater financial education. This will help the households make informed
decisions about their investments. According to Castaeda (2016) more people are
getting interested to pursue a professional financial career and to promote financial
literacy. This should include a listing of financial products available in the market and if
the program succeeds, financial stability is enhanced because stakeholders make
rational decisions and manage their funds and businesses well (Beltran, 2016). The
Philippine Information Agency and the Presidential Communications Development and
Strategic Planning Office are mandated to allot airtime for programs, and to produce and
disseminate printed and online materials for economics and financial literacy awareness
enhancement (Mendez, 2015).
Borrowings
On borrowing too much, a human resource practitioner of a company revealed that
their employees actual take-home pays are lower than what they expected. This is due
to salary deductions for loans the employees they themselves availed. Their mindset for
availing loans is that they get to enjoy their future salary at the present. Employee
productivity is not just about accurate job analysis, adequate remuneration, participative
management, sufficient skills training and objective staff appraisal, employers need to be
concerned also with how employees handle their personal finances (Cruz, 2011). People
see budgeting as a tedious homework to be dealt with and for the control factor which is
commonly associated with it. To put it simply, a budget is just a tool for keeping track of
income and expenses, budgeting is money in, money outjust this simple. It is a financial
guide that allows one to plan for future purchases (Bangko Sentral ng Pilipinas, Wealth
Watch, n.d.).
According to Tiongson (2014), proper management of your finances is the
foundation of your quest for wealth. Sometimes, people tend to borrow due to shortage
in their budget in order to satisfy their basic needs. Budgeting is affected as person spend
money not aligned to his/her necessity. Personal finance explains the rhyme and reason
as to why people find it so easy to spend and borrow according to Cruz (2012). Moreover,
most people that are less fortunate tends to borrow money in order to overcome poverty.
According to Bangko Sentral ng Pilipinas (2009), the Philippines launched first Consumer
Finance Survey that generates data about how much a Filipino borrows to know the
sources of credit and level of indebtedness. If a person is indebted and has inability to
manage their money they will suffer from financial stress. The mindset of people that
suffers from financial stress is to borrow money.

Investment
According to Mejorada (2001), investment, it is not necessarily a matter of
continuously accumulating wealth or being materialistic. Rather it should be looked upon
as a means of reducing future financial worries and ultimately, in providing financial and
personal independence. Dividing the pie into three main chunks works, one chunk for
pure saving which is used for any unplanned expenses, the other is for pure investment,
and the third slice is a spare because different people save for different reasons and a
good money management is always important (Bangko Sentral ng Pilipinas, n.d.).
Providing personal finance education training for employees followed up by investment
facilities and other personal finance reinforcing systems will lead to the employees to
become ready for their retirement. According to the research conducted by the Personal
Finance Advisers Philippines Corp. or PFA, around 70% of employees suffer from
financial stress (Cruz, 2011).
There are two kinds of money that should be put in the banks, the business Money
and emergency Money. But it takes time for their money to grow unlike investing in stock
market it depends on their strategy and risk appetite. If they invest in stock market, twenty
years from now, they can retire as millionaires (Sanchez, 2010). This is a proof that no
matter how low your salary is, if you know how to invest or if someone taught you the
strategies how to invest in the stock market, you will definitely earn more than what you
expected. According to 5 Smart Strategies When The Stock Market Is Down (2015),
investors get excited when the stocks are rising in value, however, when it is down they
get nervous and they wish that their friend would not know about the downfall and they
are hurting inside.
Review of Related Studies
Foreign
Consumption and Borrowings
In economics, consumption is defined as the use of goods and services by
households. Consumption is distinct from consumption expenditure, which is the
purchase of goods and services for use by households. Consumption is a basic action
done by a person to his money, because it is a necessity to spend and consume. Of
course before consuming, people need to work to earn income. People tend to budget
their money, but sometimes shortage on money is not avoidable which leads people into
borrowing. One form of borrowing is the use of a credit card. This allows the cardholder
to pay for goods and services based on the holders promise to pay for them. According
to a study of Deviranjitham and Thamilarasan (2004), there are a number of bank
customers who do not have any knowledge about credit cards. Although credit cards
allow customers to spend money without the actual money and function as a financial
backup for emergency purposes, the customers purchasing power tends to exceed
through its use, so it is important that one is aware of its drawbacks. The consumers
behavior towards a credit card is that he is likely to purchase goods and services for the
satisfaction of their wants because he could (Rani, 2014).
A consumer keeps buying goods and services according to his wants using a
credit card without realizing the disadvantages of it. Mansfield and Rodd (n.d.) said
attitude towards money is not equivalent to attitude towards credit, and likewise, attitude
towards credit in general, is not the same as attitude towards credit cards. The usage of
credit cards depends on how a customer handles debt, its up to the customer whether
he will consider credit card as a good debt or bad debt. It's important to be aware of the
emotional factors that influence how he handles credit. That way, he can control his
behavior and avoid running into problems with debt.
According to the study of Lawrence & Lyons, et al. (2003), if people do not allow
themselves to avail credit cards, it means they are actually saving money, because they
only avail goods they can pay with the money they have. Although having a credit card is
really tempting, if one realizes the usage of credit card, he will see that it tends to be a
distraction in saving money because it allows him to spend money first before even
earning it. People also borrow from other people and financial institutions. Borrowing from
people differs from borrowing from a financial institution; people may have many factors
like verbal agreement and things like a promissory note. On the other hand, financial
institutions use instalment and interest for payment of borrowings.

However, in the study of Achar (2012), it was found out that the proportion of
income invested in deposits and small savings increases with increase in income level.
While economic motives dominated savings and investment, even social considerations
cannot be lost sight of. Christofferson (2003) suggests to offer seminar and workshops to
small groups of individuals on the subjects of money management and credit usage.
Credit card issuing institutions should be approached for funding support of this and other
programs.
Savings and Investment
People tend to know and understand simple day-to-day money management
concepts like budgeting, credit, savings, and debt, but struggle with more complex
concepts like investments, annuity, and saving for retirement. (Asic, 2011).
Savings is the income that is not spent, and is put aside for the future. Saving
money can provide financial security and can act as a safety net in case of emergency.
People need to know while budgeting they have to save their money. Individuals with
more savings usually invest a large part or all of their savings.
In line with this, before engaging into investment, a person should know how to,
where to, and what to invest in. An investment is an asset or item that is purchased in the
present with the hope that it will generate income or appreciate in value in the future.
Economically speaking, this is the purchase of the goods that are not consumed today
but with the purpose of sale in the future. And financially speaking, an investment is a
monetary asset purchased with the idea that the asset will provide income in the future.
Based on the study of Voipe, Chen, and Pavlicko (2000), the importance of
personal investment decisions cannot be overemphasized because they have a direct
impact on people's quality of life. Such decisions include accumulating funds for a down
payment for a home or an automobile, a child's education, personal goals/dreams, and
retirement. Family characteristics such as monthly family income, stage of family life
cycle, and upbringing status emerged as determinants of their investment. Economic
motives and even social considerations dominate investment decisions (Achar, 2012).
On the other hand, running a business or investing is not easy for encountering
many different types of risk is inescapable. Some of these potential hazards can destroy
a business, while others can cause serious damage that can be costly and time
consuming to repair. Financial risk is one of the major problems of every business across
fields and geographies. It involves financial loss to firms and generally arises due to
instability and losses in the financial market caused by movements in stock prices,
currencies, interest rates and more (Edshna, 2012). It is important for investors to
understand financial risk in relation to saving for retirement. According to Collard and
Breuer (2009), the ability of an investors to willingly take the risk depends on their
responsibilities of raising a family and keeping up with financial commitments. The lower
the income, the less risk taker an individual can be, considering they had no money to
spare for investments. Life without taking risk will never achieve something in life, but
allowing you to take the risk without having a financial back up is considered irresponsible.
According to a study conducted in India (Thulasipriya, 2015), investors prefer to play safe
even though they are financial educated and the investment offers high income. No one
wants to place their money in danger. The employees still prefers to invest in financial
products which give risk free returns.
Financial Literacy and Behaviour
Money plays a vital role in ones life. Man works to earn income in order to meet
his unlimited needs and wants. According to Ishawara (2014), the predominant and prime
motive in everybodys life is income earning. Aside from the prime motive of man in
income earning which is satisfying his needs, still the desire of man to earn and save for
the future dominates. In the study, he analyzed the behaviour and level of satisfaction
toward various investment alternatives by salaried class employees. Through his study it
was revealed that majority of the respondents behave in a positive way while choosing
their investments.
Based on the research, almost all of the topics pertaining to financial literacy say
that it is a valuable part of the lives of people. It is also said that financial literacy can have
a big impact in their daily lives by knowing more of financial concepts (Tschache, 2009).
People with less experience towards learning financial literacy would know less about it.
They should at least have adequate time of learning and experience in order for them to
be really financially literate (Sabri, 2011). Studies show that financial literacy is also not
mastered by everyone who has experience learning it, because of these; there are people
who make mistakes with their financial decisions in life. This shows that not everyone
who learns and has experience with financial concepts are financially literate. Because of
this, financial literacy should be mastered and should be studied with great depth (Huston,
2010).
A study also shows that many factors affect the decisions of investors towards
choosing the right investment outlets, these decisions depend on the financial literacy of
the person. Being financially literate will also help in making the right financial decisions.
According to the studies, behaviour can be affected by religion, rumors, personal
decisions, and other factors. These factors help in the improvement of financial status of
a person (Hassan Al-Tamimi & Bin Kalli, 2009).
According to recent national surveys conducted by the National Endowment for
Financial Education, personal investment advice is the most frequent request made by
the public. Also, the mandated financial education had positive results; young adults in
the treated states had higher credit card scores and lower loan delinquencies and the
different mandates have various effects on financial literacy and it could be the case that
the different mandates vary their effect on saving (Wagner, 2015).

Based on the study of Al-Tamimi and Al-Anood (2009), the financial literacy level
is found to be affected by income level, education level, and workplace activity. High
income respondents hold high educational degrees, and those who work in the field of
finance/banking or investment had as expected a higher financial literacy level than
others. Whereas, financial illiteracy exists regardless of the age of the respondents. A
significant difference in the level of financial literacy was found as well between the
respondents according to their gender. Specifically, women have lower level of financial
literacy than men. Government employees belonging to the age group of above 50 years
have high level of preference for investment. Female government employees have high
level of preference for investment. Government employees who are single have high level
of preference for investment. Government employees, having 3 to 4 members as number
of family members showed high preference for investment (Thulasipriya, 2015).
Additionally, parents can influence their childrens financial knowledge, as well as
their financial attitudes and behaviors. This could be a positive or negative influence
depending on what their parents know, their attitude toward money, and how they act with
their money (Jorgensen, 2007).

Local
Financial Literacy and Behaviors
The study of Angeles (2014) focused on the contributing factors that help the
Filipino seafarers in enhancing their financial literacy. The study found out that families,
peers and co-workers have the major contributions. The study recommends that Junior
Financial Executives can enhance their knowledge by conducting some programs
regarding personal finance.
On the other hand, based on the analysis of Arboleda (n.d.), only 76.92% of the
respondents from the selected employees of Red Asia, Inc save money. Most of the
respondents preferred to put their money in savings. 70% of those who save money have
literacy in investment and only 32% have experience in investing. The researcher
concluded that the respondents are satisfactorily efficient in managing their finances.
Majority of them save their money for housing, for parent's welfare and for the future of
their children. Several studies investigated the relationship between personal financial
management behavior and personal financial knowledge. One of these studies shows
that financial attitude, not financial knowledge, has substantial influence on practices in
financial management. Similar results had also found in some studies.
Studies show that huge part of the consumer's disposable income is allocated to
food consumption. Food consumption is followed by utilities expense. Each consumer's
behavior towards spending is always affected by different factors. Most particularly it is

affected by the increase in prices of the goods they consume. Due to the increase in
prices of primary necessities, savings become their least priority. (Coyu, 2015) These
findings might be a key point for educational initiatives to be more aware of the financial
attitude role in financial behavior. In line with this, in the students perspective of savings,
the major reason why they were not able to save is due to their insufficient allowance.
The insufficiency of their allowance is due to the high family expenses due to high
commodity prices or the inflation. This is also the main reason why some income earners
do not have enough savings that could be used to utilize investment (Austria, 2014).
According to the study of Ardon (2012) investors rely heavily on the profile of the
company as their basis on investing and with the assessment of the profile of the company
the people who invest has to be financially literate to effectively in the right securities.
With this in mind the companies should also be financially literate because they would
want more people to invest in them for them to profit. For example, life insurance
companies where encouraged by the researcher to make further efforts in reaching out
those consumers who thought they cannot afford purchasing their own policy, those who
can afford but lacks knowledge of the terms. With that said, it only means that not only
the people should be financially literate but also the company should be so that they can
help people be financially literate.

Investment
In relation to investment, the study about the Inclination of Selected Faculty
Members of Pamantasan ng Lungsod ng Maynila in Investing in the Capital Market (2014)
shows that 24% of the faculty members has satisfactory level of literacy. And the study
also shows that 98.35% of the faculty members of PLM are highly inclined in terms of
their knowledge in the world of investing. With these, the researchers have concluded
that the faculty members are knowledgeable in investing in the capital market. One
advantage of having a deeper knowledge about the investment product is that they will
have a competitive edge over others. In this case, knowledge on this area would help
some potential investors to gain on their chosen investment.
On the other hand, in relation to investing in the capital market, the study on the
Perception of Selected Respondents on Networking as a Form of Investment (2012),
suggest that networking is a good form of investment if one is equipped with the
knowledge of the system, structure and ways to earn in the networking company. In
connection, the study also suggests that although networking may be profitable, it cannot
sustain income for a long time.
Because acquisition of real estate property is also a form of personal investment,
the buyer should have a lot of courage and enough funds and most importantly a right
mindset in acquiring this. Buying real estate property is a large investment and one should
see to it that he is capable and prepared to fulfil the obligations pertaining in the
acquisition of this property. In the study, it has been found out that most of respondents
who acquired real estate property are at the age of 41-50. The study suggested that the
buyer of real estate property should know how to determine his long term goals and must
know if home ownership fits on his plan. The buyer should assess his financial situation
and find the right property that would meet his financial preference and criteria (Alquino,
2014).
According to Almarez (2009) in his study, there are factors that manipulate the
investment portfolio management treasury department of different chosen banks. The
study concluded that managers secured their investments from risk by investing their
funds on a diversified manner. Since the riskiest outlet of investment is stock, the
managers mostly avoided this and because this outlet is less profitable in that year. To
avoid or lessen the risk, the researchers recommend avoiding placing your funds on your
own bank.
Synthesis
The previous studies and literatures showed that financial literacy in our country is
not as vast as in the other countries. Filipinos, unlike foreigners, are less knowledgeable
about personal finance. Although Filipinos are active when it comes to being financially
efficient, not all have technical knowledge about finance. Not all Filipinos who learn about
financial planning are active about it, because some do not have the sufficient resources
to engage in financial securities. Majority of the people who are financially literate only
know the basic and fundamental concepts, and there are only few people who are
educated in more advanced financial concept, which is much needed in investment
practices. Being financially literate means that a person has the capability to be financially
diverse and decisive with his assets. Although studies have shown that financial literacy
is a big part of daily living among people, it is not so about Filipinos because about 30%
of them are financially literate. Filipinos are not the only ones who are greatly financially
illiterate, but also other countries that are not much capable of giving financial education
and do not have sufficient outlets of investment. Due to this, the practices on such
activities are not as high as with well developed countries with active citizens who are
engrossed in different financial activities.
It was revealed in the previous studies and literature that being financially literate
would open the persons mind in the field of investing. It would be an advantage if one is
financially literate since it could guide him in his investment decisions and it could help
him to gain more. Investment is a way of a person to achieve financial freedom and be
able to lessen financial worries in the future. The primary objectives of investment are to
gain income and to preserve capital in the long-run. However, investment is affected by
the investors age, financial status, investment objectives and risk appetite. On the other
hand, with the proper knowledge about investment, an investor would be able to
understand the risks arising from investing. An investor must have courage and must be
on the right mindset to arrive on a good decision.
Most of the investors only engage in the activity if there is an excess on their
disposable income after consumption. Since not all Filipinos are practicing financial
budgeting, most of the time they have deficit budget which will definitely lead to
borrowings. However, if theres surplus in their budget it can be used as savings. Savings
can be used to acquire things that will gain income and interest in the future. If savings is
used for that purpose, it is considered as investment.
Investors have different behaviors in investing. Some are risk takers while others
are risk avoiders. The success of an investor does not only depend on his literacy but
also on how he behaves. There are still some investment mistakes even smart investors
make, and it is being overconfident. Investors overconfidence is evident on their behavior
and perception on different investment avenues.
The studies and literatures above failed to identify whether the demographic profile
of an individual affects his behavior towards personal investment. This study will give rise
to the information on the various demographic factors that could affect the selected
employees of the City Government of Manila in terms of their consumption, borrowings,
savings, investing and risk management. Moreover, they would focus more on the
behavior on the different investment avenues such as marketable securities, non-
marketable securities and physical assets. The research will make a thorough study of
the different actions done by the respondents towards Investing, borrowing, saving, risk
management, and consumption. This will help in obtaining proper information about how
well educated the respondents are and how they react on financial activities.
Conceptual Framework
Fig. 1
DEPENDENT VARIABLE
INTERVENING VARIABLE
INDEPENDENT VARIABLE Behavior on:
Consumption
Assessment of Financial
Employees' Financial Savings
Literacy on the
Behavior Borrowings
Employees
Personal Investment
The illustration shows the concept of the study and the relationship of each variable
presented herein. The employees financial behavior being the independent variable, the
behavior on consumption, savings, borrowings, and personal investment as the
dependent variables, and the assessment of financial literacy of the employees being the
intervening variable. The researchers will seek to find out the significant relationship
among the variables using different strategies. In determining the financial literacy and
behavior of the selected employees of the City Government of Manila, the researchers
will gather data through questionnaires that will indicate the respondents knowledge and
behavior.
Definition of Terms
The following terms used in this study were defined for the purpose of clarification.
Behavior. The way in which the respondents act toward personal finance
Bonds. It is a debt instrument in which an investor loans money to an entity
(typically corporate or governmental) which borrows the funds for a defined period of time
at a variable or fixed interest rate.
Borrowings. The action of taking and using money from an institution or person
who lends money with the promise to pay it back in future time.
Budgeting. A plan for the allocation of money; it is specifically pertaining to the
income allocation of the respondents.
Consumption. The act or process of using up the disposable income
Correlation. It is a statistical measure that indicates the extent to which two or
more variables fluctuate together.
Disposable Income. Also known as disposable personal income (DPI), is the
amount of money that households have available for spending and saving after income
taxes have been accounted for. It is often monitored as one of the many key economic
indicators used to gauge the overall state of the economy.

Financial Institution. It is a company engaged in the business of dealing with
monetary transactions, such as deposits, loans, investments and currency exchange.
Financial Literacy. It is the possession of knowledge and understanding of
financial matters. It is also defined as the knowledge of making decisions pertaining to
different areas of finance in application to ones personal financial management.
Financial Planning. It is an ongoing process to help you make sensible decisions
about money that can help you achieve your goals in life.
Investment outlet. This study used this term to pertain to the following investment
vehicle: mutual fund, stock market, networking, real estate, money-market instrument,
bond, and other securities.
Investment. An asset where the investor puts his money with the hope that it will
generate income or appreciate in the future. It also refers to the money-generating outlets
where an investor can put his money in to create wealth.
Marketable Securities. These are financial instruments that are very liquid and
can be quickly converted into cash at a reasonable price.
Maslow Hierarchy of Need. It is a motivational theory in psychology that argues
that while people aim to meet basic needs, they seek to meet successively higher needs
in the form of a pyramid.

Non-marketable Securities. These are securities that are difficult to buy or sell
due to the fact that they are not traded on any normal, major secondary market
exchanges.
Personal Investment. An amount of money that is invested in something by a
person, rather than by a company or organization, or these investments as a whole.
Physical Assets. These are items of economic, commercial or exchange value
that has a tangible or material existence.
Risk Management. It is a process that identifies loss exposures faced by an
organization and select the most appropriate techniques for treating such exposures.
Salary Grade. This is a step within a compensation system that defines the
amount of pay an employee will receive. The pay grade is generally defined by the level
of the responsibilities performed within the job description of the position, the authority
exercised by the position, and the length of time the employee has performed the job.
Savings. Part of income that is not spent, the amount left when the cost of a
person's consumer expenditure is subtracted from the amount of disposable earns in a
given period of time.
Stocks. A type of security that signifies ownership in a corporation and
represents a claim on part of the corporations assets and earnings.

CHAPTER III
Methodology
This part of the study discusses the methodology used by the researchers in
conducting the research. Methodology is the process used to gather data that will be used
in the research. It includes the research design, description of the respondents, research
locale, sampling design, instrumentation and its validation, data gathering, procedures
and statistical treatment of data.
In conducting the assessment in the behavior and the level of financial literacy of
the employees of the City Government of Manila, the researchers used survey
questionnaire for data gathering and the result gathered were computed and consolidated
for the analysis of data.
Research Design
The intent of the research is to assess the behavior and the level of financial
literacy of the selected employees of the City Government of Manila towards personal
investment. Thus, in line with the studys objectives, the researchers used the descriptive
research design for it allowed the researchers to gather quantitative and qualitative
information that describes the respondents.
This research design is what the researchers considered to be appropriate for the
study because it involves collections of qualitative information that can be tabulated along
a scale in numerical form, and it can also describe categories of information. Descriptive
statistics often uses graphs and charts to aid the reader comprehend the data distribution
because presenting a large mass of raw data will not bear conclusive and comprehensive
information to them. This is why it is very important to compress the data into manageable
form.
Several matters are to be assessed in this research; thus, creating the need to
present data using tabular forms. First, it is assessed herein the level of financial literacy
of the respondents and their behavior towards personal investment, specifically, in
consumption, spending, borrowing, investment, and risk management. Next is their
behavior towards selecting marketable securities, non-marketable securities, and
physical assets as investment avenues. The existence or non-existence of the
relationship of the respondents income allocation and demographic profile were also
assessed in this study, as well as the relationship of their financial literacy with their
behavior towards consumption, spending, borrowing, investment, risk management,
marketable securities, non-marketable securities, and physical assets.
Research Locale
The research locale refers to the place where the data are collected. In this study,
the researchers gathered data from Manila City Hall located at Arroceros Street Ermita,
Manila. The survey questionnaires are distributed in distinct department within the Manila
City Hall including the isolated office of the Department of Public Service near the Central
LRT Station. The reason of conducting the study at the given place is the institution is
near the school where the researchers are studying, the accessibility of data and the
hospitality of the employees in helping the researches gather data with regards to the
research topic.
Sample and Sampling Technique
Most populations can be segregated into several mutually exclusive populations;
the process by which the sample is constrained includes elements from each of the
segments. A simple random sample is an unbiased surveying technique.
In this research, the researchers used simple random sampling, also called
unrestricted random sampling, which means that every individual in the population had
an equal chance of being chosen to be included in the sample, in the execution of the
survey. There are three reasons the researchers chose simple random sampling: first, it
is easy to understand and is easy to apply; second, is to generalize the large population
of employees of City Government of Manila; and lastly, to avoid subjectivity of population.
A simple random sample can be taken within the population. The results from the
study can then be weighted and combined with appropriate population estimates. The
researchers used the employees of the City Government of Manila as their population.
The sample size, which is 383, was computed as follows:


The formula used to determine the sample size is = 1+2
Where:
n = the size of the sample
N = the size of the population (8817)
e = the margin of error (5%)

8817
n = 23.0425
n = 382.64 or 383
Instrumentation
The researchers use survey questionnaire as the instrument for data gathering for
it is apt in collecting firsthand information. Also, the selection of this statistical tool is based
on what the researchers find to be efficient and effective way to gather data.
The questionnaire use aims to gather specific and sufficient data needed as a
basis of answering all the questions stated in the statement of the problem. The answers
to the questions provided the bases for the hypothesis testing. The first part of the
questionnaire contains the purpose and the title of the research. Thereafter are the
indicated instructions necessary to answer the questionnaire. The questionnaire will be
the statistical tool used to measure the knowledge and behavior of the City Government
of Manila employees towards personal investment.

For the questionnaire proper, respondents are to supply the data essential for the
research study - including facts, behavior and insight regarding matters about their
behavior on personal investment and knowledge about personal finance. Likert scale,
identification of demographic profile, and open-ended and closed-ended questions form
were used to answer the questions.
Before doing the actual survey questionnaire, the validity test is used to make sure
the questionnaire is able to collect the necessary data used for the research. With this
the questionnaire is able to gather information about the respondents behavior and
financial literacy about personal investment. The pre-test was conducted by having 10
respondents answer the survey questionnaire. Through the survey questionnaire, the
researchers found out that some respondents were not able to answer few of the given
questions, thus, they improved other parts of the questionnaire to let them be able to
gather appropriate answers to determine the financial literacy and behavior of the
respondents.
Data Gathering Procedures
The researchers started the study by researching in the internet, libraries of
different universities, National Library, and the library of the Bangko Sentral ng Pilipinas
to gather sufficient local and foreign related literatures and studies.

After reviewing pertinent studies and literature, the researchers decided to use
survey questionnaire as the instrument of this research. This particular instrument has
been chosen because the City Government of Manila is populous and survey
questionnaire is the most efficient instrument for data collection. The survey questionnaire
is composed of open-ended and closed-ended questions, all of which were based on the
research objectives, statement of the problem, and hypothesis of this study.
Then, the researchers sent a request letter to the City Government of Manila
asking for its approval to conduct a study a within its vicinity and with its employees as
subject. After given the permission, validity test was conducted prior to the actual survey
to observe if the survey questionnaire is sufficient to answer the hypothesis. Pretesting is
relevant to allow the researchers identify the weakness of their chosen instrumentation
and to improve its deficiency as well.
Preview of the final outcome of this survey was recognized by the researcher after
having the result of the response of the 10 employees who undergone pretesting. The
researchers apprehended that their survey questionnaire lacks proper measurement of
respondents investment for it focused only on limited investment outlets. The survey
questionnaire was then revised so that it will provide appropriate responses to test the
hypothesis.
Followed by the pretesting was the actual survey. The researchers scrutinize and
analyze the data and formed a tabular sheet presenting the result of the response. The
evaluation was concluded after having the sufficient results.
Statistical Analysis of Data
The responses of the subjects, selected employees of the City Government of
Manila, were statistically scrutinized by using different statistical tools that are applicable
and suffice to prove the hypothesis of this study. The following are the statistical tools in
accordance to the statement of problem:
Percentage and Frequency Distribution. The researchers used the Percentage
Frequency Distribution to show individual frequencies as a percentage of the total
frequencies. Frequency Distribution is used to know the actual frequency of each
category while the Percentage Frequency Distribution is used to know the percentage of
each frequency. The said statistical tool is used to determine the answers in the first and
fifth statement of the problems. Percentage Frequency distribution is used to determine
the demographic profile of the selected employees of the City Government of Manila in
terms of their age, occupation, sex, disposable monthly income and number of
dependents. Also, it is used to determine the behaviors of the selected employees in
terms of their consumption, borrowing, savings, investment and risk management.


Percentage Frequency Distribution= 100%

Where:
F= frequency
n= respondents
Percentage. In determining the second statement of the problem which sought
to answer the level of literacy of the respondents, the researchers used percentage of
actual score of the respondents to the total number of items.

% = x 100
Mean Percentage. Also, in concluding the allocation of the respondents
presented in the third statement of the problem, in terms of food, shelter, transportation
expenses, communication expenses, utilities expenses, health, education, investment,
luxury spending, leisure, and others, same statistical tool is used which is percentage.

%= x 100

Analysis of Variance (ANOVA) through Statistical Package for Social
Sciences (SPSS). To determine the significant differences on the variables in the study,
the researchers used the Analysis of Variation which was ran through the Statistical
Package for Social Sciences for the fourth statement of the problems. The demographic
profile and exact amount of income allocation to different expenses were input in the
SPSS as variants to determine the p-value of the variables, the t-computed, and the
decision on the null hypothesis.
Pearson Product- Moment Correlation. The researchers also used Pearson
Product- Moment Correlation to determine the correlation of coefficient of the sixth and
eight statement of the problem. They used the statistical method in concluding the
relationships between financial literacy and their behavior in terms of consumption;
borrowings; savings; investments; and risk management; and lastly to determine the
significant relationships between the level of financial literacy of the respondents and their
behavior towards the following investment avenues: Marketable Securities; Non-
Marketable Securities; and Physical Assets.
( )( )
=
[( )2 ][( )]
Where:
x = observed scores of respondents financial literacy
= mean of respondents financial literacy

y =observed scores of respondents behavior
= mean of respondents behavior
To test the significance coefficient of correlation of data, the researchers used to
find out if the computed Pearsons r could have occurred in a population in which the two
variables are related or not. The test statistic follows the t distribution with n 2 degrees
of freedom. The significance is computed using the formula
2
=
1
Where:
t = t-test for correlation coefficient
r = correlation coefficient
n = number of paired sample
Weighted Average Mean. The researchers also used Weighted Mean in
determining the behaviors of the respondents in terms of different investment avenues:
Marketable Securities; Non-marketable Securities; and Physical Assets, which is
presented on their seventh statement of the problem:
()()
=

Where:
= Mean
w= weight of each items
x= value of each items
n= total number of values
= summation notation
CHAPTER IV
Presentation, Analysis, and Interpretation of Data
In this chapter, the researchers presented all the data gathered. The analysis and
interpretation of data are presented to give meaning to the findings of the study.
TABLE 1.A
Frequency and Percentage Distribution of the Respondents

According to Age
Age Frequency Percentage Rank

21-30 88 22.98% 3
31-40 104 27.15% 2
41-50 106 27.68% 1
51 and above 85 22.19% 4
TOTAL 383 100.00%
This table shows that most or 27.68% (n=106) of employees of the City Government
of Manila are of age 41-50. This is followed by those who are of age 31-40 with 27.15%
(n=104) and 21- 30 with 22.98% (n=88). Those who are of age 51- 60 has 19.84% (n= 76)
of the total sample. The least comprises of those who are above 60 with 2.35% (n=9) of
the total number of respondents.

TABLE 1.B

According to Sex
Sex Frequency Percentage Rank
Male 191 49.87% 2
Female 192 50.13% 1

Total 383 100.00%
This table shows that majority of the respondents are female, which comprises of
50.13% (n=192) of the sample, while only 49.87% (n=191) of the respondents are male.
TABLE 1.C

According to Civil Status
Civil Status Frequency Percentage Rank
Single 147 38.4% 2
Married 224 58.5% 1
Widowed 8 2.1% 3
Separated 4 1.0% 4
Total 383 100.00%
This shows that majoity of the respondents is married. It has a frequency of 224 or
58.5% of the total sample size. It is followed by those who are single that is 38.4%. A
small portion constitutes both the widowed and separated which is 2.1% and 1.0%,
respectively. It could be inferred from the data above that most of the employees are of
marrying age since most of them are married.

TABLE 1.D

According to Salary Grade
Salary Grade Frequency Percentage Rank
1 to 3 75 19.58% 3
4 to 7 97 25.33% 2
8 to 11 111 28.98% 1
12 to17 58 15.14% 4
18 and above 42 10.97% 5
Total 383 100.00%
This table shows that 28.98% of the respondents belongs to salary grade 8 to 11
(n=111); followed by salary grade 4 to 7 with 25.33% (n=97); then salary grade 1 to 3 with
19.58% (n=75); and salary grade 12 to 17 with 15.14% (n=58). The least percentage is
salary grade 18 and above with only 10.97% (n=42) of the total respondents.
TABLE 1.E
Frequency and Percentage Distribution of the Respondents According to Monthly

Disposable Income
Disposable Income Frequency Percentage Rank
Below P15,000 165 43.08% 2
P15,001 P30,000 172 44.91% 1
P30,001 P45,000 39 10.18% 3
P45,001 P60,000 4 1.04% 4
P60,001 and above 3 0.79% 5
TOTAL 383 100.00%
This table shows that 44.91% (n=172) of the respondents have a monthly
disposable income of P15,001 P30,000. Followed by below P15,000 which is 43.08%
(n=165) of the sample. Then, 10.18% (n=39) has P30,001- P45,000 monthly disposable
income. Meanwhile, respondents who has P45,001 P60,000 has a 1.04% (n=4) and
P60,001 and above got the least percentage which is 0.79% (n=3).
TABLE 1.F

According to Number of Dependents
No. of Dependents Frequency Percentage Rank
0 112 29.24% 2
1-2 168 43.86% 1
3-5 97 25.33% 3
6 and above 6 1.57% 4
TOTAL 383 100.00%
This table shows that most or 43.86% (n=168) of the employees of the City
Government of Manila have 1 to 2 dependents. The table also shows that 29.24% (n=112)
of the respondents have no dependents. This is followed by 3 to 5 dependents with
25.33% (n=97) of the sample. Only 1.57% (n=6) of the total respondents have a total of
6 and above number of dependents.

TABLE 2

According to Level of Financial Literacy
Level of Financial Literacy Frequency Percentage Rank
Highly Literate 42 11% 3
Literate 209 55% 1
Barely Literate 120 31% 2
Needs Improvement 12 3% 4
Total 383 100%
This table shows that majority of the employees of the City Government of Manila
are literate with a percentage of 55% (n=209). This means that majority of the
respondents got scores ranging from 16 to 20. The table also shows that 31% (n=120) of
the sample are barely literate, they are those who got 11 to 15 score. This is followed by
those who are highly literate which is 11% (n=42) and those who needs improvement with
3% (n=13) of the sample. There is no portion in the total number of respondents who are
poorly literate.
TABLE 3
Allocation of Combined Disposable Monthly Income of the Family
EXPENDITURE Ave. Expenses Percentage Rank
Food P 8,281.59 31.37%

1
Shelter 2,718.16 10.29%
3
Transportation 2,252.13 8.53%
5
Communication 1,124.79 4.26%
7
Utilities 2,537.52 9.61%
4
Healthcare 1,083.37 4.10%
8
Education 3,257.05 12.34%
2
Savings 2,166.37 8.02%
6
Investments 548.89 2.08%
12
Insurance 570.89 2.16%
11
Luxury Spending 840.21 3.18%
9
Leisure 735.38 2.79%
10
Others 334.33 1.27% 13
TOTAL P 26,401.35 100%
Table 3 shows that an average of 31.37% of the combined disposable monthly
income of the respondents is allocated for food. This is followed by the allocation for
education and shelter with 12.34% and 10.29% respectively. Utilities, transportation and
savings with 9.61%, 8.53% and 8.02% respectively, while communication, healthcare,
luxury and leisure with 4.26%, 4.10%, 3.18% and 2.79% respectively. Lastly, the
respondents combined disposable monthly income is allocated for insurance, investment
and for others with 2.16%, 2.08 and 1.27%.

TABLE 3.A
AVERAGE MONTHLY DISPOSALS ON EXPENDITURES, SAVINGS AND

INVESTMENT IN TERMS OF AGE
Age
Expenditure
21-30 31-40 41-50 51-60 Abov e 60
Av e. Rank Av e. Rank Av e. Rank Av e. Rank Av e. Rank
Food 5,317.30 1 8,374.44 1 10,377.46 1 8,346.30 1 9,060 1
Shelter 1,871.48 3 2,450.37 5 3,245.59 3 3,161.17 3 2,400 3
Transportation 1,250.06 5 2,242.18 6 2,981.78 5 2,432.72 5 1,898 4
Communication 809.65 8 1,096.05 7 1,393.51 8 1,163.39 7 870 8
Utilities 1,203.91 6 2,583.07 3 3,174.8 4 3,095.96 4 1500 6
Health 756.99 9 1,035.81 8 1,491.63 7 1,041.49 9 1,560 5
Education 1,578.67 4 3,424.16 2 4,510.48 2 3,577.42 2 1,100 7
Sav ings 2,038.06 2 2,553.6 4 1,854.70 6 1,969.8 6 2,650 2
Inv estment 177.12 11 659.17 11 727.46 12 708.12 11 0 12
Insurance 154.72 12 870.53 10 826.88 10 761.33 10 100 10
Luxury 850.14 7 638.40 12 1,002.22 9 1,045.63 8 0 12
Leisure 623.5 10 877.91 9 819.07 11 672.34 12 500 9
Others 101.97 13 364.4 13 386.55 13 403.96 13 0 12
Total 16,733.57 27,170.09 32,792.13 28,379.63 21,638
This table shows that respondents whose age is 21-30 allocate P5,317.30 on food;
while 31-40 allocate P8374.44; then age 41-50 spend P10377.46; whereas 51-60 with
P8346.30; and above 60 has P9060. Then when it comes to shelter, respondents with age
21-30 allocate P1,871.48; then 31-40 with P2450.37; whereas respondents with age 41-
50 spend P3245.59; while 51-60 allocate P3161.17; and above 60 spend P2400.
Correspondingly with transportation, respondents with age 21-30 apportion P1,250.06;
then 31-40 with P2242.18; next 41-50 with P2981.78; whereas respondents with age 51-
60 with P2432.72; and 60 and above with P1898 of their income goes to transportation.
When it comes to communication, those with age 21-30 spend P809.65; next is 31-40 with
P1096.05; then 41-50 with P1393.51; whereas respondents with 51-60 of age spend
P1163.39; and above 60 respondents with P870.

TABLE 3.B

INVESTMENT IN TERMS OF SEX
SEX
Expenditure
Female Male
Ave. Rank Ave. Rank
Food 8,133.33 1 11,663.17 1
Shelter 2,738.08 3 3,449.63 2
Transportation 2,169.80 5 2,417.54 5
Communication 1,192.81 8 1,353.09 7

Utilities 2,476.09 4 2,454.19 4
Health 1,196.97 7 1,170.88 8
Education 3,497.14 2 2,652.15 3
Savings 2,118.96 6 2,224.60 6
Investment 436.72 12 1,030.26 9
Insurance 616.17 11 522.75 12
Luxury 754.21 9 820.11 11
Leisure 692.19 10 830.00 10
Others 406.25 13 313.03 13
Total 26,428.72 30,901.40
This table shows that the average expense of female in terms of food is P8,133.33
while P11,663.17 for male. While in terms of shelter, the average expense of female is
P2,738.08 and P3,449.63 for male. In terms of transportation, the average expense of
female is P2,169.80 while P2,417.54 for male. Then, in terms of communication, the
average expense of female is P1,192.81 and P1,353.09 for male. Next, in terms of utilities,
the average expense of female is P2,476.09 while male has P2,454.19.
Subsequently, in terms of health, the average expense of female is P1,196.97 and
P1,170.88 for male. Afterwards, in terms of education, the average expense of female is
P3,497.14 and P2,652.15 for male. Then, in terms of savings, the average expense of
female is P2118.96 and P2,224.60 for male. Furthermore, in terms of investment, the
average expense of female is P436.17 while P1.030.26 for male. While in terms of
insurance, the average expense of female is P616.17 and P522.75 for male. Moreover, in
terms of luxury, the average expense of female is P754.21 and P820.11 for male. Also, in
terms of leisure spending, the average expense of female is P692.19 while P830.00 for
male. Lastly, the respondents other expenses, female has P406.25 average expense while
P313.03 for male.

TABLE 3.C

INVESTMENT IN TERMS OF CIVIL STATUS
CIVIL STATUS
Expenditure
Single Married Separated Widowed
Ave. Rank Ave. Rank Ave. Rank Ave. Rank
Food 6,291.99 1 9,769.26 1 7,540 1 7,750 1
Shelter 1,877.77 2.5 3,370.86 3 2,300 2 2,750 3
Transportation 1,648.60 5 2,744.55 5 1,620 4.5 1,450 6
Communication 926.89 8 1,293.69 7 810 7 662.5 7
Utilities 1,861.36 2.5 3,086.73 4 1,500 6 1,750 5
Health 1,036.13 7 1,157.92 8 1,624 4.5 625 8.5
Education 1,306.65 6 4,783.29 2 1,800 3 2,625 4
Savings 1,706.22 4 2,299.06 6 200 10.5 7,000 2
Investment 465.81 11 621.75 12 200 10.5 500 10
Insurance 438.78 12 705.16 11 0 12.5 0 12.5
Luxury 783.87 9 921.23 9 400 8 375 11
Leisure 688.14 10 798.58 10 0 12.5 625 8.5
Others 239.03 13 427.23 13 260 9 0 12.5
TOTAL 19,271.23 31,979.21 18,254 26,112.5
This table shows that in terms of food, married respondents have highest average
expense with P9,769.26; followed by widowed respondents with P7,750; then separated
respondents with P7,540; and the least are single respondents with P6,291.99. For the
shelter, married spends the most with P3,370.86; then widowed with P2,750; separated
with P2300; and single with P1,877.77. For communication expense, married still has the
highest average expense with P1293.69; then single with P926.89; separated with P810;
and widowed with P662.50.
For transportation, married also spends highest with P2,744.55; then single with
P1,648.60; separated with P1,620; lastly widowed with P1,450. For the utilities expense,
married spends highest with P3,086.73; followed by single with P1,861.36; widowed with
P1,750; and separated with P1,500. For the healthcare, separated allocate most with
P1,624; then married with P1,157.92; next, single with P1,036.13; least are the widowed
with P625. For the average expense for education, married spends most with P4,783.89;
followed by widowed with P2,625; then separated with P1,800; and single with P1,306.65.
For the average allocation for savings, widowed spends most with P7,000; followed
by married with P2,299.06; then, single with P1,706.22; and separated with P200. For the
average expense for education, married spend most with P4,783.89; followed by widowed
with P2,625; then separated with P1,800; and single with P1,306.65. For insurance, the
married spends most with P705.16; followed by single with p438.78; however, separated
and widowed do not allocate for insurance. For luxury, married spends highest with
P921.23; then single with P798.58; separated with P400; and widowed with P375. For
leisure, married spends most with P798.58; then single with P688.14; widowed with P625;
and separated do not allocate for leisure. For other expenses, married spend most with
P427.23; followed by separated with P260; single with 239.03; lastly, widowed do not
allocate for these expenses.

TABLE 3.D

INVESTMENT IN TERMS OF SALARY GRADE
SALARY GRADE
Expenditure
SG 1-3 SG 4-7 SG 8-11 SG 12-17 SG 18 & Abov e
Av e. Rank Av e. Rank Av e. Rank Av e. Rank Av e. Rank

Food 5,803.95 1 6,651.53 1 8,900.00 1 10,484.48 1 12,176.74 1
Shelter 2,388 3 2,505.10 3 3,139.35 3 2,882.76 5 2,658.88 6
Transportation 1,428.08 6 1,813.18 5 2,255.74 5 3,077.24 4 3,610.23 4

Communication 820.92 8 1,004.54 7 1,052.87 8 1,419.83 7 1,672.09 8
Utilities 1,601.33 4 1839.39 4 2,850.09 4 3,237.93 3 4,090.70 3
Health 366.67 10 964.56 8 1,556.43 7 1,298.28 8.5 1,290.00 11.5
Education 2,492.13 2 3,073.10 2 3,815.82 2 3,818.97 2 3,098.84 5
Sav ings 1,541.45 5 1,424.49 6 2,024.27 6 2,542.11 6 4,425.58 2

Inv estment 98.68 13 551.19 10 587.96 11 282.16 13 1,720.93 7
Insurance 252.63 11 186.90 13 449.38 12 1,308.62 8.5 1,318.60 10
Luxury 921.05 7 528.57 11 683.96 10 982.76 11 1,639.53 9
Leisure 438.82 9 639.80 9 711.11 9 1,023.21 10 1,197.67 13
Others 125.00 12 301.53 12 149.53 13 327.27 12 1,279.07 11.5
TOTAL 18,336.87 21,533.89 28,209.51 32,709.62 40,195.88
In terms of food, respondents with salary grade 1-3 have a P5,803.95 average
expense; P6,651.53 for salary grade 4-7; P8,900.00 for salary grade 8-11; P10,484.48 for
salary grade 12-17; and P12,179.74 for salary grade 18 & above. In terms of shelter, an
average expense of P2,388 for salary grade 1-3; P2,503.10 for salary grade 4-7; P3,139.35
for salary grade 8-11; P2,882.76 for salary grade 12-17; P2,658.88 for salary grade 18 &
above. Next, for transportation expense, P1,428.08 for salary grade 1-3; P1,813.18 for
salary grade 4-7; P2,255.74 for salary grade 8-11; P2,077.24 for salary grade 12-17; and
P3,610.23 for salary grade 18 & above.
For communication, respondents with salary grade 1-3 spend P820.25; P1,004.54
for salary grade 4-7; P1,052.87 for salary grade 8-11; P1,419.83 for salary grade 12-17;
and P1,672.09 for salary grade 18 & above. For utilities, salary grade 1-3 earners spend
P1,601.33; P1,839.39 for salary grade 4-7; P2,850.09 for salary grade 8-11; P3,237.93 for
salary grade 12-17; P4,090.70 for salary grade 18 & above. In terms of health, respondents
with salary grade 1-3 spend P366.67; P964.56 for salary grade 4-7; P1,556.43 for salary
grade 8-11; P1,298.28 for salary grade 12-17; P1,920.00 for salary grade 18 & above. For
education, salary grade 1-3 earners spend P2,492.13; P3,072.10 for salary grade 4-7;
P3,815.82 for salary grade 8-11; P3,818.97 for salary grade 12-17; and P3,098.84 for
salary grade 18 & above.
Then, savings, respondents with salary grade 1-3 spend P1,541.45; P1,424.49 for
salary grade 4-7; P2,024.27 for salary grade 8-11; P2,542.11 for salary grade 12-17; and
P4,425.58 for salary grade 18 & above. Next, investment, respondents with salary grade
1-3 spend P98.68; P851.19 for salary grade 4-7; P587.96 for salary grade 8-11; P282.16
for salary grade 12-17; and P1720.93 for salary grade 18 & above. For insurance, salary
grade 1-3 earners spend P252.63; P186.00 for salary grade 4-7; P449.83 for salary grade
8-11; P1,308.62 for salary grade 12-17; and P1,318.00 for salary grade 18 & above. In
terms of luxury spending, salary grade 1-3 spend P921.05, P528.57 for salary grade 4-7;
P683.86 for salary grade 8-11; P982.76 for salary grade 12-17; and P1,639.53 for salary
grade 18 & above. For leisure, salary grade 1-3 earners spend P438.82; P639.80 for salary
grade 4-7; P711.11 for salary grade 8-11; P1,023.21 for salary grade 12-17 and P1,197.67
for salary grade 18 & above. Lastly, in terms of other spending, salary grade 1-3 spend
P125.00; P301.53 for salary grade 4-7; P149.53 for salary grade 8-11; P327.27 for salary
grade 12-17 and P1,279.07 for salary grade 18 & above.

TABLE 3.E

INVESTMENT IN TERMS OF MONTHLY INCOME
MONTHLY INCOME
EXPENDITURE Below 15,000 15,001-30,000 30,001-45,000 45,001-60,000 60,000 Above
Ave. Rank Ave. Rank Ave. Rank Ave. Rank Ave. Rank
Food 7,565.2 1 9,333.7 1 9,764.1 1 11,450 2 33,333.33 1
Shelter 2,766.7 3 3,214.1 3 2,000.8 6 0 12.5 12,267 4
Transportation 2,194.1 5 2,412.7 5 2,775.4 4 4,000 4 12,667 3
Communication 1,102.2 8 1,170.1 8 1,435.9 7 2,875 7 4,466.7 11
Utilities 2,434.9 4 2,839.9 4 3,548.7 2 6,625 3 12,000 5
Health 1,301.9 7 1,397.8 7 1,320.5 10 1,750 10.5 3,666.7 12
Education 3,304.9 2 3,896.6 2 2,673.1 5 2,750 8 7,000 7
Savings 1,876.2 6 2,191.6 6 3,212.8 3 11,750 1 8,333.3 6
Investment 288.79 12 360.14 12 820.51 13 3,000 6 16,667 2
Insurance 553.84 11 688.4 10.5 941.03 12 2,500 9 5,000 9.5
Luxury 753.37 9 741.18 9 1,359 9 3,125 5 6,000 8
Leisure 709.7 10 712.35 10.5 961.54 11 1,750 10.5 5,000 9.5
Others 51.83 13 186.39 13 1,410.3 8 0 12.5 1,666.7 13
TOTAL 24,903.04 29,145.03 32,223.7 51,575 128,066.7
In terms of food, respondents with monthly income of below 15,000 have a P7,565.2
average expense; P9,333.7 for monthly income of 15,001-30,000; P9,764.1 for 30,000-
45,000; P11,450 for 45,001-60,000; and P33,333.33 for 60,000 and above. For shelter,
respondents with below 15,000 spend P2,766.7; P3,214.1 for 15,001-30,000; P2,000.8 for
30,000-45,000; P0 for 45,001-60,000; and P12,267 for 60,000 and above. For
transportation, with below 15,000 spend P2,194.1; P2,412.7 for 15,001-30,000; P2,775.4
for 30,000-45,000; P4,000 for 45,001-60,000; and P12,667 for 60,000 and above. For
communication, respondents with below 15,000 spend P1,102.2; P1,170.1 for 15,001-
30,000; P1,435.9 for 30,000-45,000; P2,875 for 45,001-60,000; and P4,466.7 for 60,000
and above. For utilities, respondents with below 15,000 spend P2,434.9; P2,839.9 for
15,001-30,000; P3,548.7 for 30,000-45,000; P6,625 for 45,001-60,000; and P12,000 for
60,000 and above.
Next, for health, respondents with below 15,000 allocate P1,301.9; P1,397.8 for
15,001-30,000; P1,320.5 for 30,000-45,000; P1,750 for 45,001-60,000; and P3,666.7 for
60,000 and above. For education, with below 15,000 spend P3,304.9; P3,896.6 for 15,001-
30,000; P2,673.1 for 30,000-45,000; P2,750 for 45,001-60,000; and P7,000 for 60,000 and
above. Respondents with below 15,000 save P1,876.2; P2,191.6 for 15,001-30,000;
P3,212.8 for 30,000-45,000; P11,750 for 45,001-60,000; and P8,333.3 for 60,000 and
above. Respondents with below 15,000 invest P288.79; P360.14 for 15,001-30,000;
P820.51 for 30,000-45,000; P3,000 for 45,001-60,000; and P16,667 for 60,000 and above.
For insurance, with below 15,000 spend P553.84; P688.4 for 15,001-30,000; P941.03 for
30,000-45,000; P2,500 for 45,001-60,000; and P5,000 for 60,000 and above. For luxury,
with 15,000 allocate P753.37; P741.18 for 15,001-30,000; P1,359 for 30,000-45,000;
P3,125 for 45,001-60,000; and P6,000 for 60,000 and above. For leisure, with 15,000
spend P709.7; P961.54 for 15,001-30,000; P961.54 for 30,000-45,000; P1,750 for 45,001-
60,000; and P5,000 for 60,000 and above. Respondents with below 15,000 spend on
others with P51.83; P186.39 for 15,001-30,000; P1,410.3 for 30,000-45,000; P0 for 45,001-
60,000; and P1,666.7 for 60,000 and above.

TABLE 3.F

INVESTMENT IN TERMS OF NUMBER OF DEPENDENTS
NUMBER OF DEPENDENTS
Expenditure
0 1 to 2 3 to 5 6 & Above
Ave. Rank Ave. Rank Ave. Rank Ave. Rank

Food 6,227.48 1 7,956.29 1 10,973.20 1 10,000 1
Shelter 1,727.07 3 3,191.57 2 3,061.25 4.5 3,708.33 5
Transportation 1,691.93 4 2,342.87 5 2,716.08 6 3,166.67 6
Com munication 951.03 8 1,165.71 7 1,188.04 7 2,450 7
Utilities 1,543.75 5 2,598.15 4 3,397.73 3 5,150 3
Health 1,159.61 7 1,017.90 8 1,012.76 8 3,833.33 4
Education 1,411.16 6 2,939.40 3 5,541.45 2 9,166.67 2
Savings 1,751.53 2 1,900.6 6 3,041.24 4.5 333.33 10
Investment 537.20 11 340.92 13 958.76 9 0 12
Insurance 439.69 12 588.12 11 735.42 11 0 12
Luxury 779.46 9 903.61 9 840.21 10 500 9
Leisure 671.88 10 770.06 10 706.25 12 1666.67 8
Others 192.41 13 385.54 12 442.71 13 0 12
TOTAL 19,084.20 26,100.75 34,615.09 39,925
In terms of food, respondents with no dependents allocated P6,227.48; one to two
allocated P7,956.29; three to five allocated P10,973.20; and six and above allocated
P10,000. Next are shelter and transportation, respondents with no dependents allocated
P1,727.07 and P1,691.933; one to two allocated P3,191.57 and P2,342.87; three to five
allocated P3,061.25 and P2,716.08; and six and above allocated P3,708.33 and
P3,166.67.
Then communication and utilities, respondents with no dependents allocated
P951.03 and P 1,543.75; one to two allocated P1,164.71 and P2,598.15; three to five
allocated P1,188.04 and P3,397.73; and six and above allocated P2,450 and P5,150.
Respondents with no dependents allocated P1,159.61 and P1,411.61; one to two allocated
P1,017.90 and P2,939.40; three to five allocated P1,012.76 and P5,541.45; and six and
above allocated P3,733.33 and P9,166.67 for their health and education. In terms of
savings and investment, respondents with no dependents allocated P1,751.73 and
P537.30; one to two allocated P1,900.60 and P340.92; three to five allocated P3,041.34
and P958.76; six allocated P333.33; and six and above did not allocate.
In terms of insurance and luxury spending, respondents with no dependents
allocated P439.69 and P779.46; one to two allocated P588.12 and P903.61, three to five
allocated P735.42 and P840.21; six did not allocate; and six and above allocated P 500.00.
On the other hand, respondents with no dependents allocated P671.88 and P192.41; one
to two allocated P770.06 and P385.54; three to five allocated P706.25 and P442.71; six
allocated P1666.67; and six and above did not allocate for their leisure and other expenses.
TABLE 4.A
Significant Difference of Respondents' Age and Income Allocation
Age
Decision
Expenses N p-value Interpretation
on H 0
Food 383 0.001 Reject With Significant Difference
Shelter 383 0.015 Reject With Significant Difference
Transportation 383 0.003 Reject With Significant Difference
Communication 383 0.026 Reject With Significant Difference
Utilities 383 0.001 Reject With Significant Difference
Healthcare 383 0.288 Accept No Significant Difference
Education 383 0.041 Reject With Significant Difference
Savings 383 0.849 Accept No Significant Difference
Investment 383 0.014 Reject With Significant Difference
Insurance 383 0.001 Reject With Significant Difference
Luxury 383 0.521 Accept No Significant Difference
Leisure 383 0.615 Accept No Significant Difference
Others 383 0.458 Accept No Significant Difference
This table shows that most of the null hypotheses are rejected. There is significant
difference between respondents age and allocation of income in terms of food, shelter,
transportation, communication, utilities, education, investment, insurance. On the other
hand, there is no significant difference between respondents age and allocation of
income in terms of healthcare, savings, luxury, leisure and others.

TABLE 4.B
Significant Difference of Respondents' Sex and Income Allocation
Sex
Expenses N p-value Decision on H 0 Interpretation

Education 383 0.525 Accept No Significant Difference
Savings 383 0.029 Reject With Significant Difference
Insurance 383 0.478 Accept No Significant Difference
Luxury 383 0.019 Reject With Significant Difference
Leisure 383 0.012 Reject With Significant Difference
This table shows that all null hypotheses are rejected, which means that there is
significant difference between the respondents sex and allocation of income in terms of
food, shelter, transportation, communication, utilities, savings, investment, luxury and
leisure. There is no significant difference between the respondents sex and allocation of
in terms of healthcare, education, insurance and other expenses.

TABLE 4.C
Significant Difference of Respondents' Civil Status and Income

Allocation
Civil Status
Correlation N p-value Decision on H 0 Interpretation

Shelter 383 0.40 Accept No Significant Difference
Education 383 0.40 Reject With Significant Difference
Investment 383 0.80 Accept No Significant Difference
Insurance 383 1.00 Accept No Significant Difference
Luxury 383 0.80 Accept No Significant Difference
This table shows that most of the null hypotheses are accepted. There is no
significant difference between respondents civil status and allocation of income in terms
of shelter, health care, investment, insurance, luxury, leisure and others. On the other
hand, there is significant difference between respondents civil status and allocation of
income in terms of food, transportation, communication, utilities, education and savings.

TABLE 4.D
Significant Difference of Respondents' Salary Grade and Income

Allocation
Salary Grade
Expenses N p-value Decision on H 0 Interpretation
Others 383 0.001 Reject With Significant Difference
This table shows that almost all the null hypotheses are rejected. With regards to
the respondents salary grade, it has significant difference that is correlated with income
allocation in terms of food, shelter, transportation, communication, utilities, savings,
investment, insurance, luxury and others. While in terms of healthcare, education and
leisure, there is no significant difference.

TABLE 4.E
Significant Difference of Respondents' Monthly Income and Income Allocation
Monthly Income
Correlation N p-value Decision on H 0 Interpretation

This table shows that almost all the null hypotheses are rejected. There is significant
difference between respondents monthly income and allocation of income in terms of
food, shelter, transportation, communication, utilities, savings, investment, insurance,
luxury and other. While in terms of healthcare, education and leisure, the table shows that
there is no significant difference.

TABLE 4.F
Significant Difference of Respondents' Number of Dependents and Income

Allocation
Number of Dependents
Correlation N p-value Decision on H0 Interpretation
This table shows that almost all the null hypotheses are rejected. With regards to
the respondents number of dependents, it has significant difference that is correlated
with income allocation in terms of food, shelter, transportation, communication, utilities,
savings, investment, insurance, luxury and others. While in terms of healthcare, education
and leisure, there is no significant difference.

TABLE 5.A
Frequency and Percentage Distribution of Behavior towards Consumption
Consumption
Behavior Frequency Percentage Rank

Best Behavior 66 17.23% 3
Better Behavior 229 59.79% 1
Good Behavior 74 19.32% 2
Needs Improvement 11 2.87% 4
Poor Behavior 3 0.78% 5
Total 383 100.00%
This table shows that the majority of the respondents falls under the category of better
behavior towards consumption with 59.79% (n=229); followed by good behavior with
19.32% (n=74); third category is best behavior with 17.23% (n=66); on the other hand,
needs improvement and poor behavior are the least with 2.87% (n=11) and 0.78% (n=3).
TABLE 5.B
Frequency and Percentage Distribution of Behavior towards Borrowings
Borrowings
Total 383 100.00%
This table shows that most or 38.64% (n=148) of the respondents has been
categorized to have good behavior towards borrowings; followed by 37.08% (n=142) with
better behavior; third are with best behavior with 19.06% (n=73) and needs improvement
with 5.22% (n=20); on the other hand, poor behavior ranked least with no percent.
TABLE 5.C
Frequency and Percentage Distribution of Behavior towards Savings
Savings

Total 383 100.00%
This table shows that majority of the respondents fall under better behavior in terms
of savings with 65.01% (n=249); followed by the best behavior with 14.88% (n=57); then,
good behavior with 11.49% (n=44); next is poor behavior with 8.62% (n=33); and lastly,
needs improvement ranked least with no frequency.

TABLE 5.D
Frequency and Percentage Distribution of Behavior towards Investment
Investment
Total 383 100.00%
This table shows that the most of the respondents belong to the category of poor
behavior towards investment with 42.82% (n=164); followed by better behavior with
28.98% (n=111); next is good behavior with 20.63% (n=79); on the other hand, best
behavior and needs improvement are the least with 6.27% (n=24) and 1.31% (n=5),
respectively.
TABLE 5.E
Frequency and Percentage Distribution of Behavior towards

Risk Management
Risk Management
Total 383 100.00%
Table 5.E shows that the most or 43.34% (n=166) of the respondents has poor
behavior towards risk management; followed by 35.77% (n=137) of the respondents are
categorized as better behavior; next is best behavior with 14.63% (n=55) and good
behavior with 6.53% (n=25); on the other hand, needs improvement ranked least with no
percent.
TABLE 6
Correlations between Level of Literacy and Behavior towards Consumption,

Borrowings, Savings, Investment and Risk Management
Correlation Decision on
Correlations N p-value Interpretation
Coefficient H0
Consumption Weak positive

383 0.24 0.00 Reject
correlation
Borrowings 383 0.02 0.33 Accept No correlation
Savings Weak positive

383 0.11 0.02 Reject
correlation
Investment 383 -0.01 0.42 Accept No correlation
Risk
383 -0.06 0.91 Accept No correlation
Management
This table shows that there is no significant correlation between respondents
financial literacy and behavior towards borrowings, investment and risk management; on
the other hand, there is weak positive correlation between respondents financial literacy
and behavior towards consumption and savings.

TABLE 7.A
Weighted Average Mean of the Behavior of the Respondents in relation

to their Marketable Securities
Factors Mean Rank Description

Regularly buying Marketable securities 2.3 4.5 Disagree
Putting money on a diversified
3.0 1 Agree
investment
Withdrawal of investment before
2.3 4.5 Disagree
maturity
Choosing the same investment decision

2.6 2 Disagree
again and again
Choosing investment with large return

2.4 3 Disagree
regardless of the risk
This table shows the behavior of the respondents in relation to their marketable
securities. It is clear from this table that most of respondents expressed their views
negatively towards their marketable securities.
From this table, it can be seen that most of the behavior of the respondents falls
under disagree. The mean 2.3 falls under the bracket disagree, meaning, most of the
respondents do not regularly buy Marketable Securities. The mean 3.0 is equivalent to
agree meaning the respondents diversify their investment. The mean 2.3, which belongs
to disagree, reveals that respondents do not withdraw their investment before maturity.
The mean 2.6, which corresponds to agree, means that most of the respondents often
invest in the same investment avenue. The mean 2.4 connotes that respondents disagree
in putting their money in a high risk investments.

TABLE 7.B
Weighted Average Mean of the Behavior of the Respondents in relation to their

Non- Marketable Securities
Factors Mean Rank Description
Regularly buying non-marketable

2.3 5 Disagree
securities
Assessment of all information and details
2.8 1 Disagree
before buying non-marketable securities
Buying insurance to ensure properties 2.6 3 Disagree
Depositing higher amount on savings
2.7 2 Disagree
when the interest rate is high
Buying multiple life insurance for more
2.4 4 Disagree
coverage
This table shows the respondents behavior in relation to their non-marketable
securities. It is clear from this table that most of the respondents expressed their views
negatively towards their non-marketable securities.
From this table, it can be seen that the means for each factors falls under disagree.
The mean 2.3 connotes that respondents do not regularly buy marketable securities. The
mean 2.8 falls under disagree, which shows that respondents do not assess the securities
they are purchasing it. The mean 2.6, which falls under disagree, shows that the
respondents are not availing insurance to protect their property. The mean 2.7
corresponds to disagree, which shows that respondents do not considers the banks
interest rate when saving. The mean 2.4 shows that the respondents do not buy multiple
insurance for more coverage.

TABLE 7.C
Weighted Average Mean of the Behavior of the Respondents in relation to their

Physical Assets
Factors Mean Rank

Description
Discount on price as basis in buying physical
3.1 1 Agree
assets
Buying physical asset depending on the new

2.5 5 Disagree
trend
Buying physical assets in cash instead of
2.8 3.5 Disagree
installment due to price difference
Buying when there is an excess on disposable
3.0 2 Agree
income.
Buying physical assets for future gain 2.8 3.5 Disagree
This table shows the respondents behavior in relation to their physical assets. It is
clear from this table that most of the respondents expressed their views negatively
towards their physical assets.
From this table, it can be seen that the behavior of the respondents in terms of the
factors given falls under disagree. The mean 3.1 falls under agree, which shows that the
discount on price attracts the respondents to buy physical assets. The mean 2.5 belongs
to disagree, which means the decision of the respondents in buying physical asset is not
affected by the trends. The mean 2.8 is equivalent to disagree, which means that
respondents prefer to buy physical asset in installment. The mean 3.0, means that
respondents only buy physical assets when there is an excess in their disposable income.
The mean 2.8 translates that the respondents do not buy physical assets for future gain.
TABLE 8
Correlations between Level of Literacy and Behavior towards

Marketable Securities, Non-marketable Securities and Physical Assets
Correlation Decision
Correlations N p-value Interpretation
Coefficient on H 0
Marketable
383 0.05 0.17 Accept No correlation
Securities
Non-
Marketable 383 0.06 0.12 Accept No correlation
Securities
Physical Weak positive
383 0.15 0.00 Reject
Assets correlation
The table shows that there is weak positive correlation between respondents
financial literacy and behavior towards physical assets; on the other hand, there is no
correlation between respondents financial literacy and behavior towards marketable
securities and non-marketable securities.

CHAPTER V
Summary of Findings, Conclusion, and Recommendation
This chapter presents the summary of findings, conclusion and recommendation of
the study. The summary of findings contains the results of the analysis and interpretation
of the gathered data, the conclusion discusses briefly the findings that answer the
statement of the problem introduced in the first chapter. Lastly, the recommendation
contains the practical suggestions that will improve the solution to the problem
investigated, and to whom the study is significant and beneficial.
Summary of Findings
Most of the respondents are 41-50 years old; followed by 31-40 years old; then,
by 51 years old and above; and the least is age 21-30. Being a government employee is
a stable job; hence, once employed, the respondents usually continue working in the
institution as they grow older.
50.13% or majority of the respondents is female; and 49.87% are male.
Majority of the respondents are married; followed by single; and only very few are
either widowed or separated. It is so as majority of the respondents are in the marrying
age.
Most of the respondents belong to salary grade 8-11; followed by salary grade 4
to 7; then, salary grade 1 to 3; next, salary grade 12 to 17; the least percentage is salary
grade 18. This indicates that the City Government of Manila mostly consists of employees
who are average income earners and minimum wage earners, and only a small number
earns above average income.
Most of the respondents earn P15,001-P30,000; followed by below P15,000; next,
P30,001-P45,000; then, P45,001-P60,000; and the least, P60,001 and above.
Most of the respondents have 1-2 dependents (43.86%); followed by those who
do not have dependents (29.24%); then, those who have 3-5 dependents (25.33%); and
lastly, those who have 6 or more dependents (1.57%). Most have dependents as the
respondents are in the marrying age. Respondents who do not have dependents
constitute a large part of the sample because single respondents are the second biggest
population.
55% or majority of the employees of the City Government of Manila is financially
literate; 31% are barely literate; 11% are highly literate; 3% needs improvement; and no
part of the sample is poorly literate. This means that the respondents have ample
knowledge on finance matters that are practical and are encountered in their daily lives.
The results do not concern their literacy with respect to the technical aspects of finance.
Respondents allocate most or 31.37% of their combined disposable monthly
income for food; 12.34% for education; 10.29% for shelter; 9.61% for utilities; 8.53% for
transportation expense; 8.02% for savings; 4.26% for communication expense; 4.10% for
healthcare; 3.18% for luxury spending; 2.79% for leisure; 2.16% for insurance; 2.08%;
and lastly, 1.27% for other spending. This indicates that the top priority of the respondents
are food, education, shelter, and utilities which are the basic needs in the Maslows
Hierarchy of Needs while the least priority goes to leisure, insurance, investment and
other expenses.
The respondents with age 41-50 spend most on basic necessities such as food,
shelter, transportation, communication, utilities and education as compared to other age
brackets because as they grow older, their obligations increase for they have dependents
who are still attending schools but it will decrease as they draw near to retirement because
their dependents might have their own job that lessen their expenses. In terms of savings,
age bracket 21-30 allocated most among other age brackets because those are the
phases when someone realizes that it is difficult to spend money that he/she personally
earned but as time goes by prioritizing saving became tricky as obligation to the family
increases. Meanwhile, as an employee nears retirement, saving is prioritized again
because it is used to ensure their future wellness. For the respondents' health, it is
prioritized more as they get older, same with insurance. In addition, younger respondents
tend to invest more than older respondents because they have lesser financial
obligations.
Male respondents tend to spend more in terms of food, shelter, transportation,
communication, savings, investment, luxury, leisure than female because of the fact that
male usually is the main source of income for the family and they provide for the needs
and wants of their family. On the other hand, female spend more on utilities, health,
education, insurance and others because they usually prioritize the wellness and relief of
the family.
Married respondents spend most on the basic necessities as compared to other
respondents who are categorized as single, widowed, and separated. They tend to spend
most in terms of food, shelter, communication, transportation, utilities, education,
investment, insurance, luxury, leisure, and other spending. Most married respondents
have dependents so they have greater expenses as compared to others. Married people
have greater responsibilities because they have dependents who are still studying, thus,
they tend to spend mostly on food and education. On the other hand, those who have
been categorized as separated have the least spending among other civil status. Small
portion of their income goes to communication expense, savings, investment, luxury
spending, and other spending. In addition, those who are separated do not allocate part
of their income to insurance and leisure. Overall, the least priority of the respondents in
terms of spending regardless of their civil status are investment, insurance, and other
spending.
In table of salary grade, the researchers found out that respondents with a salary
grade above 18 has the highest average spending in food, transportation,
communication, utilities, healthcare, savings, investment, insurance, luxury, leisure and
other spending. This is because as their salary increase they tend to buy more to sustain
their wants. While those who respondents fall in salary grade 1-3 has the least average
expenses for their income allocation. Since respondents have enough salary, they spend
enough also for their needs. The researchers found also found out that large portion
of their salary goes to food regardless of their salary grade. Studies show that huge part
of the consumer's disposable income is allocated to food consumption. Food
consumption is followed by utilities expense. Similarly, the researchers discovered that
those respondents with a salary grade of 8 and above has the highest average spending
in savings, investment and insurance and those who respondents with salary 1-3 has the
least. Since they small salary, they tend to spend their disposable income primarily for
consumption. This implies that the higher the income of an individual the higher they can
save and invest.
The respondents with monthly income of below 15,000 and 15,001-30,000 allocate
most on the basic necessities as compared to respondents with higher monthly income
because they prioritize the needs on top of everything. They tend to spend most in terms
of food, shelter, transportation, utilities, health, and education. Whereas it showed that
they dont prioritize investment, insurance, luxury, leisure, and others because their
monthly income is just enough for their needs. While the respondents with monthly
income of 30,001-45,000 and 45,000-60,000 focused mainly on savings. This is because
their monthly income can cover not just their basic necessities but also savings.
Moreover, respondents with monthly income of 60,000 and above allotted most on
investment since their income is not only sufficient for their needs but its capable in
investments too.
The respondents with 6 or more dependents spend most on the basic necessities
as compared to respondents with lesser number of dependents because they need to
allocate more to suffice for the family. They tend to spend most in terms of shelter,
transportation, utilities, health, education. While almost not allocating for investment,
insurance, luxury, and others because these are not basic needs. While respondents with
no dependents showed the least income allocation for basic needs next to respondents
with 3 to 5 and 1 to 2 dependents and shows that the income allocation of the 3 brackets
to health, education, savings, investment, insurance, luxury, leisure and others varies
greatly, with respondents that have no dependents being the least to allocate their
expenses as compared to respondents with 1 to 2 and 3 to 5 dependents because they
have no one else to allocate their income to except themselves.
The respondents income allocation varies according to age, explicitly, their priority
in allocating for Food, Shelter, Transportation, and Communication, Utilities, Education,

Investment and Insurance. Otherwise, their allocation for healthcare, savings, luxury,
leisure, and other expenses do not show significant discrepancy according to age.
This shows that the respondents sex is not a basis when allocating expenses to
healthcare, education, insurance, and other expenses since these do not necessarily
have a sex oriented effect in costs.
The income allocation of respondents varies depending on their civil status,
specifically, their allocating for Food, Transportation, Communication, Utilities, Education,
and Savings. On the other hand, their allocation for shelter, healthcare, investment,
insurance, luxury, leisure, and other expenses do not show significant variation according
to age.
The respondents income allocation varies according to their monthly income
specifically in food, shelter, transportation expense, utilities expense, savings,
investment, insurance, luxury, and other expenses. On the other hand, their allocation in
terms of healthcare, education, and leisure do not show significant discrepancy.
The income allocation of the respondents varies according to their monthly income
specifically in food, shelter, transportation expense, utilities expense, savings,
investment, insurance, luxury, and other expenses.
Alternatively, their allocation in terms of healthcare, education, and leisure do not
show significant discrepancy.

The respondents monthly income differs depending on their number of
dependents, in particular with food, transportation expense, utilities expense, and
education. Conversely, their allocation in terms of shelter, communication, healthcare,
savings, investment, insurance, luxury, leisure and other expense is not affected by the
number of their dependents. Majority of the respondents or 65.01%, showed better
behavior towards savings. They are mostly keeping their savings on their own, saves for
emergency purposes, are saving only when there is an excess in their disposable income,
and do not consider the interest rate on banks.
In terms of Investment, most of the respondents belong to poor behavior with
42.82%, which attests that most of them are not investing. On the other hand, the best
behavior which ranked second to the least reflects the number of respondents who
engage in investment. Behaviors were measured based on their engagement to
investment, specifically, physical assets, marketable and non-marketable securities, and
their behavior before engaging into investment.
In Risk Management, the respondents which fall under poor behavior reach the
highest percentage of 43.34%. The reason for this poor behavior of the respondents
towards risk management is that only few of them are availing insurance. Moreover,
another reason for this is the low number of people who are investing. Further, out of the
respondents who have investment, most of them chooses to invest in securities with fixed
return and are avoiding high risk investments.

The researchers found out that there is slight correlation between the respondents
level of financial literacy towards consumption and savings. Because they are efficient in
managing their finances which reflects to their behavior. However, there is no correlation
amongst borrowings, investment and risk management. For the reason that most of the
respondents tend to expend their finances more than their disposable monthly income for
consumption which lead to borrow and dont invest. Also, they have the knowledge about
borrowing, investing and assessing their risk but they dont tend to practice it in reality.
In terms of the respondents behavior towards marketable securities, most of the
respondents do not engage in marketable securities. Instead of investing in marketable
securities, many choose to put their money on a diversified investment. They believe that
diversification exposes them to lower risk.
With regard to the respondents behavior towards marketable securities, most of
the respondents are hesitant in investing in non-marketable securities. Non-marketable
securities are not a common investing avenue to the employees. Before buying non-
marketable securities, they assess first all information to ensure that their money is in
good condition.
As to the respondents behavior towards physical assets, most of the respondents
are attracted to buying physical assets with discounts. Discount has the most impact on
the respondents in choosing and buying physical assets.

Based on the table, the level of financial literacy of the respondents does not affect
the respondents behavior towards marketable securities, as well as towards non-
marketable securities, because despite of having practical knowledge on the two
investment avenues, they do not engage in it. On the other hand, the level of their financial
literacy slightly affects their behavior towards physical assets since acquiring these is
more common than acquiring the previously mentioned investment avenues.
Conclusion
Being financially literate is one of the aspects to overcome poverty. It is very useful
as a guide for an individual on his/her decision making in terms of his/her personal
finances. In addition, income allocation of an individual limits his/her knowledge of
handling their finances. The focus of this research is to measure the behavior and the
level of literacy of the selected employees of the City Government of Manila towards
personal investment. The researchers used the descriptive research design for it allowed
the researchers to gather quantitative and qualitative information that describes the
respondents. Since the conducted research has a large mass of raw data, descriptive
statistics was used to aid the reader to grasp the data distribution. Also, the researchers
used Pearsons Correlation and ANOVA to further deliberate the significance of
demographic profile and literacy of the respondents towards personal investment.

The majority of the respondents is married and has dependents; in addition,
respondents who do not have dependents constitute a large part of the sample as single
respondents are the second biggest population. The City Government of Manila mostly
consists of employees who are female and who are average income earners and
minimum wage earners, and only a small number earns above average income. It means
that majority of them earn only enough or even less for their necessary expenses.
Majority of the respondents are literate because more than half of them shows
scores ranging from 16-20, wherein, the basis of the respondents level of literacy is the
scale that determines the frequency of the respondents depending on the range wherein
their scores fall. On the other hand, only few of the respondents need improvement in
learning the basics of finance.
The top priority of the respondents in allocating their disposable monthly income is
food. This is because most of the respondents disposable monthly income is P15,001 to
P30,000, which mean it is just enough for their basic needs. Therefore, the researchers
conclude that respondents prioritize necessities over wants. In line with this study, the
study of Coyu (2015) supports that huge part of the consumers disposable monthly
income is allocated to food consumption. The reason for having food as the top priority of
the respondents is explained in the Maslows Hierarchy of Needs that physiological need
is a necessity.
Education is their next priority. This is because majority of the respondents are
married and have one to two dependents which means that it is their obligation to send
them to school. Thirdly and fourthly are shelter and utilities respectively, because these
are also basic needs of human. Next is transportation, since this a necessity for being
able to go to work every day. Then savings, since this is what is left after basic needs and
everyday expenses have been deducted from their disposable monthly income. Then
after, communication and health nowadays are considered as necessity because of
certain circumstances such as emergencies. Subsequently, luxury and leisure ranked
lower for these expenses are just wants.
On the other hand, the least priorities are insurance, investment and other spending.
This is also due to the low capacity of the respondents in terms of their monthly
disposable income.
The study concluded that the respondents allocation varies according to their
demographic profile. It is conspicuous that preference of the respondents differs on every
age bracket. People who are younger tend to spend more on leisure, luxury, while elder
people allocate more on the utilities, education, healthcare, and transportation. Also, the
income allocation differs according to civil status and number of dependents for the
reason that married respondents with dependents is spending higher than those who are
single and has no dependents. Further, monthly income, in line with salary grade,
perceptibly, has an impact on the spending habits of the respondents. It is noticeable that
the spending of the respondents arises aligned with their increasing income, therefore,
those who have high income also spends higher. Their behavior towards spending also
revealed the reason why personal investment is barely visible to them. This is because
their monthly disposable income is almost enough for their daily living that makes them
disregard the fact that savings and investment is also an important part of their finances.
According to Caritthers, due to the inadequate control over finances of workers, including
those employees in executive position, they tend to retire without having enough money
to sustain their remaining adult life.
The study also concluded that there are significant differences on the respondents
income allocation and demographic profile in terms of age, sex, monthly income, and
salary grade. This is due to the fact that as they grow older their preferences and needs
change. As their monthly income and salary grade, being proportionate to each other,
increases their allocation also increases and differs. Otherwise, there are no significant
differences on their income allocation and demographic profile in terms of civil status, and
number of dependents. In addition, there are significant differences between the
respondents civil status and income allocation in terms of basic needs because there are
respondents who have dependents which means they spend more.
Majority of the respondents have been categorized as having better behavior in
consumption and savings. This means that respondents are practicing financial
budgeting. They know their priorities in allocating their disposable income, and they
assessed the products and services to maximize the use of their income and
notwithstanding the fact that the respondents have a low income, they can still save for
the purpose of emergency situations. This is in conformity to the viewpoint of Al-jeraisy
(2008) that the consumer budget and looks for a certain products or services to buy, to
evaluate and to use. However, this is somehow contradictory to the result of survey in
borrowings where majority of the respondents belong in the category of good behavior
which, roughly, means that despite of practicing financial budgeting, they still experienced
financial deficit. Unlike in investment and risk management, the respondents have been
categorized as having poor behavior. In other words, despite of having knowledge about
investment and risk management, respondents are not practicing what they know.
There are no correlations between respondents level of financial literacy on
borrowings, investment and risk management, the researchers determined that despite
of being financially literate of the respondents they have showed poor behavior because
they are not practicing well and are not aware of the technicalities of borrowings,
investment and risk management. They may have been categorized as knowledgeable
but it doesnt mean that it reflects on their behavior towards those factors. However,
respondents literacy when it comes to consumption and savings has a slight correlation
to their behavior because they are more aware of those financial practices because it is
the most basic.

The respondents have negative views towards marketable securities, non-
marketable securities and physical assets because the respondents are not that eager in
investing due to not well established investment knowledge on them. And also due to lack
of initiative of investment institutions to educate people.
There is no correlation between respondents financial literacy and behavior towards
marketable securities and non-marketable securities because even theyre
knowledgeable about the mentioned investment avenues they dont practice investing on
it. However, there is a slight correlation between the respondents financial literacy and
behavior towards physical assets, since acquiring physical assets is more common than
acquiring marketable and non-marketable securities.
In a nutshell, the respondents are financially literate since they have sufficient
experience and knowledge acquired from their long working experience, but due to being
average and minimum wage income earners, only few are engaging in investment.
Respondents prioritize food, which is the most basic need of human and almost neglect
investment which they are categorized as literate only on basic and practical information
and not on its technicalities. Furthermore, out of those who invest most of them put their
money in a low risk investment such as physical assets and small businesses because it
is more practical than acquiring high risk investment such as marketable securities.
Recommendation
The recommendations were based on the conclusion of this research that majority of
the respondents are literate but only a few of them are investing.
For the employees and their families who are not financially literate, the researchers
suggest that it is wise to study the basics of investment, namely marketable securities,
specifically mutual funds, stocks, corporate bonds, money market securities, unit
investment trust fund; non-marketable securities, specifically, bank account, life
insurance, non-life insurance, provident fund, and government savings fund; physical
assets, specifically, business, house, land, vehicles, precious stones or jewelries,
appliances, and gadgets before engaging in it. Moreover, in terms of spending, the
researchers recommend to accumulate savings first before spending in order to have
more cash on hand for investment. Similarly, it is recommendable that employees should
avail insurance to lessen the chances of loss when investing, and to ensure there are
funds for emergency purposes and to secure future financial wellness before investing.
In relation to this, the researchers suggest that instead of allotting their income for leisure
and luxuries, it is better to allocate it to savings, investment and insurance.
In addition, for the graduates of finance education it is assumed that they are
financially literate and they are expected to manage their future investments properly
compared to most of the employees of the City Government of Manila. Consequently, the
researchers recommend that finance education graduates help those who are not
financially literate in building their financial foundation for them to have financial wellness
in the future and to manage their expenses accordingly. Moreover, the graduates
themselves are recommended to apply their knowledge in securing their future financial
wellness.
For the aspiring investors who have no idea at all on where to put their money, the
researchers suggest that it is best to attend free seminars first to gauge what type of
investment fits their risk appetite and their capacity. It is recommendable to go to
entrepreneurial seminars or seminars for different investment outlets, specifically stock
market, foreign exchange, and other investment outlets which offer free lectures.
More so, engaging into investment right away without sufficient knowledge is not
advisable for it might cause further harm to ones finances. Instead of gaining, greater
chance of loss is waiting for those impulsive novice investors who are not prepared.
However, possibility of losing will be tolerable because most of the financial institutions
today render assistance through guiding investors on their personal finances or if they
are into securities market, their portfolio. With a minimum amount of P5,000, employees
can now invest in different marketable securities such as mutual funds and stocks.
For financial institutions, it is a great opportunity to lend their services in masses of
people who are in need of their financial guidance. Therefore, the researchers suggest
that they extend their services in terms of offering seminars, and other materials that are
more informative and are easily comprehensible to all.

Particularly, for the insurance companies, since only few of the respondents have
insurance, this study suggests that they should have a more customer friendly insurance
policies with affordable premium.
For the future researchers, it is suggested that they conduct studies regarding the
significant correlation of the respondents demographic profile and behavior towards
consumption, borrowings, savings, investment, risk management, and different
investment outlets, namely, marketable securities, non-marketable securities, and
physical assets.
The researchers also suggest that the Department of Education should push through
the inclusion of financial literacy program in the K-12 curriculum not only for the SHS
students but also for the students who are in primary and secondary level of education
so that personal financial management can be practice at an early age. The Department
of Education should take initiative to raise financial awareness to create more financially
responsible citizen.
The researchers also suggest that the Capital Market Institute of the Philippines
(CMIP) should provide free trainings and seminars for the Filipinos in rural and urban
areas to educate them and to help them familiarize on the so-called capital market. This
action will pave the way for the increase of Filipinos who are engaged in investing.

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PAMANTASAN NG LUNGSOD NG MAYNILA

(University of the City of Manila)

respondents towards consumption, investment, borrowing, savings and risk

the respondents on marketable securities, non-marketable securities and physical assets.

the significance of their demographic profile when it comes to consumption, investment,

borrowing, savings and risk management.

will raise their financial awareness.

Background of the Study

Income earning is a primary motivation of an individual employee to meet his/her

a determinant of savings and consumption.

Savings on the other hand is related to investment. Savings can be an investment

Every individuals mindset differs on how he/she decides which particular

investment avenue to choose. Each persons methodology varies according to his/her

factor on taking the decision to invest, influences individuals on his/her choice of

their level of literacy, as well as the assessment of different investment opportunities

individuals level of understanding of financial matters which enables them to process

various financial products; hence to understand a certain level of financial literacy is

to overcome poverty and to ensure financial wellness.

to experience bankruptcy (Mitchelle, 2010). It is a sobering fact that financial illiteracy is

to make quality financial decisions; subsequently, reduce financial problems.

It is interesting to know if employees of the City Government of Manila have other

behaviors on personal investment.

employees of City Government of Manila, towards personal investment. Through the

investors. To aid the possible improvement of financial behavior of these employees

survey to be used for all participating employees of the City of Manila.

Statement of the Problem

Government of Manila towards personal investment. Specifically, this sought answers to

the following questions:

1. What is the profile of selected employees of the City Government of Manila

d. Position/ Salary Grade;

e. Monthly Income; and

2. What is level of financial literacy of the selected employees of the City

3. How the respondents allocate their disposable monthly income according

to their demographic profile in terms of:

i. Luxury Spending; and

4. Are there significant differences on the respondents allocation of their

disposable monthly income in terms of:

e. Monthly income; and

5. What are the respondents behavior in terms of:

6. Are there significant relationships between the respondents financial

literacy and their behavior in terms of:

7. What are the respondents behavior towards the following investment

b. Non-marketable Securities; and

8. Are there significant relationships between the respondents financial

literacy and their behavior towards the following investment avenues:

b. Non-marketable Securities; and

Objectives of the Study

Government of Manila towards personal investment.

1. To determine the demographic profile of the selected employees of the City

and number of dependents.

2. To determine the level of the respondents financial literacy in terms of

consumption, borrowing, savings, investment and risk management.

3. To get the profile on the allocation of the respondents disposable monthly

income according to food, shelter, transportation expense, communication expense,

utilities expense, health, education, investment, luxury spending and leisure.

4. To establish the significant differences on the respondents allocation of

income, and number of dependents.

5. To determine the respondents behavior in terms of consumption,

borrowing, savings, investment and risk management.

6 To determine the significant relationships between the respondents

financial literacy and their behavior in terms of consumption, borrowing, savings,

investment and risk management.

7. To determine the respondents behavior towards marketable securities,