Commentary

Philippines: A Case Study in Financial Literacy for Foreign

Workers
by FinancialCorps, 11 October 2013

The financial literacy community was buzzing today over news that an alliance of major international
organizations, including the United Nations, the European Union and the Philippine government, has
rolled out a major financial literacy initiative to teach important skills in financial education to Filipino
workers.
Eight countries have been selected to participate in the worldwide Joint Migration and Development
Initiative Phase II Project (JMD12) organized by the EU, the Swiss Agency for Development and
Cooperation, and the Swiss Federal Department of Foreign Affairs. The eight countries are the
Philippines, Costa Rica, Tunisia, Ecuador, El Salvador, Morocco, Nepal and Senegal. A consortium led
by various United Nations entities will administer the project locally.
The Philippine JMDI2 is set to commence in the fourth quarter of 2013 and is designed to buttress
financial education and literacy, along with capacity-building and entrepreneurial skills. The program
also is focused on galvanizing support from local cooperatives, rural banks, micro-lending entities and
other institutions to provide the education, tools and resources to individuals who are in need of such
services to boost their levels of financial literacy.
The Philippine program is driven in large part by the fact that many Filipino workers who are on
contract to work abroad return to the country devoid of meaningful savings, which forces them to
search for and pursue employment abroad on a continuous basis. Education relating to their financial
affairs is critical not only for these workers, but also for their families who are left in the country when
their family members secure jobs abroad.
This circumstance taking place in the Philippines, where workers are forced to take jobs outside the
country on a continual basis due to lack of savings and retirement funds, combined with the lack of
financial education among this workforce, is representative of the situation in many other countries as
well. Many financial literacy proponents believe that as awareness of this problem grows, a greater
spotlight will shine on the need for financial education in these regions to support not only the
individuals working abroad, but also their families left in the home countries without an understanding
of basic money management topics. To the extent this dynamic takes hold, we should see a rise in the
number and scope of financial education programs in these areas in the months and years ahead.