SEN. GRACE POE'S SPEECH
at the Consumer Welfare Month Event 30 September 2016

Sino sa inyo dito ang nakakakilala kay Dionie Reyes o nakarinig na sa kuwento niya?

Well, Dionie Reyes was an ordinary office worker who won the lotto jackpot on April 2008. But after three months, Dionie Reyes was broke. Pagkalipas ng apat na buwan, ubos na ang napanalunan niya sa lotto.

Ang tanong - paano nangyari 'to? Ito po ang kuwento. 14 million pesos ang napanalunang lotto jackpot ni Dionie Reyes. Sa araw mismo ng pagkakuha niya ng premyo niya - sa araw mismo nun - bumili kaagad siya ng sports car. Pagkatapos, bumili siya ng house and lot sa BF Homes Parañaque. Binigyan niya ng "balato" ang mga kapatid at malalapit na kamag-anak; at siyempre, pati sa mga kapitbahay at mga ka-opisina niya numudmud din siya ng pera between ?5,000 up to ?50,000 each. Pinautang din niya ang isang pamangkin niya ng ?500,000 upang makapagpatayo ito ng bahay. Binili din niya ng kotse ang pamangkin ng asawa niya at ito ang ginamit niyang "personal driver" niya. He also sunk in money in several dubious, "double-your-money" deals which generated no returns for him.

Gastos dito, gastos doon; bili dito, bili doon - hanggang isang araw, nagising na lang si Dionief Reyes ubos na ang milyones na napanalunan sa lotto. ?14 million in four months - ganun po kabilis maubos ang pera kung hindi "financially literate" ang isang tao.

Kahapon lamang mayroon akong nabasa sa diyaryo, mayroon ding nanalo na isang vendor ng 62 million pesos. Siguro dapat may kaakibat na programa ang lotto na kapag binibigay ang premyo sa mga nanalo at tuturuan ng mga possible options kung papaano makakapag-tipid o mapapalago ang pera nito. Pero isang aspeto lang po iyan. Alam natin ang storya na ito.

It is easy to smile and laugh, but Dionie Reyes I think represents what a typical Filipino would do if he suddenly gets hold of a huge sum of money. I believe that, easily, 90% of our population would have done exactly the same things that he did...

Alam niyo hindi na rin ako lalayo, ang aking ama, bagama't matagumpay na actor at producer, kapag gumagawa iyon ng pelikula at malaki ang kinikita sa takilya, pagkatapos ng ilang buwan ay ubos na rin iyon dahil kailangan na naman niyang gumawa ng bagong pelikula at yung mga sobrang konting kinita niya o malaki man ay ipinapamahagi sa mga lumalapit sa kanya imbes na magtayo ng isang foundation nung mga panahon na iyon.

Financial literacy is about having a basic knowledge of money and asset management, that includes saving, investing, budgeting, and insuring. It also means being able to plan, implement, and evaluate financial decisions.

According to a Standard & Poor's survey conducted in 2014, only 25% of Filipino adults are "financially literate." This means that 75% of Filipinos have no idea about basic financial concepts such as inflation, compound interest, risk diversification, due diligence and the like. And I'm not surprised because even I, I mean I know the basic principles of saving, a little bit about investing but perhaps it wasn't until I started assuming responsibility in the Senate did I knew further into the different jargon in terms of our financial institutions.

Most are unfamiliar of the various financial instruments available in the market today and the risks involved when they buy these instruments.

Kaya naman ang dami nating naririnig/napapanood na nabibiktima ng "scams," yung nangyari noon sa Pagadian na halos buong probinsya ay nabiktima ng scam na double your money. Hindi lang iyon, kasama ang mga government officials na nabiktima rin. Ngayon, nadagdagan pa ng "ATM skimming" at identity theft na pina-imbestigahan ko po sa Senado noon. This problem will only get worse as criminals become more sophisticated and tech-savvy.

Dito na po dapat papasok ang government institutions such as the Bangko Sentral ng Pilipinas. As the Central Bank of the Philippines, you are mandated to regulate and monitor the activities of our financial service providers, and to protect consumers from unscrupulous business practices. As the guardians and protectors of Filipino consumers, I imagine you must always be vigilant and one step ahead of financial criminals, and tireless in your efforts in warning the public of predators. You also need to assist them in finding mechanisms to redress their grievances.

But in the long-run, consumer rights protection can best be realized not through strict regulation but through financial literacy. We cannot protect consumers from these scams so long as the vast majority of our people remain "financially illiterate." Mas marami pa nga ang nakakakilala ng pera padala kesa yung isang aktwal na bangko, kaya nga sabi nila, ilang porsyento lang ang nakatapak sa isang aktwal na financial institution. Kaya ang laki pa ng potensyal ng ating bansa, kahit sa insurance sa banking.

As such, BSP as a public institution should re-orient its role into an "enabler" and not a mere regulator. You've been quite successful in managing monetary aggregates and I congratulate you specially our very credible, respected and competent governor who has stayed above the fray of politics. You've remained respected.

What we did in MTRCB back when I was chair was we shifted from being a "board of censors," I changed MTRCB's orientation from that of censorship to that of "intelligent media viewership." We need to be able to let the public make intelligent decisions through timely, age-appropriate ratings information.

BSP's role should be that of an "enabler" and a "steerer" - to provide consumers with accurate and relevant information to "enable" them to make informed decisions on what financial products they can safely invest in and to "steer" them away from bad ones.

Of course, kami noon sa MTRCB may kapangyarihan din mag-penalize - ilang sinehan at mga bus companies rin ang aming pinasara at pinatawan ng multa dahil nagpapalabas sila ng mga X-rated. Similarly, ang BSP po ay may kapangyarihang manghuli at magpasara ng mga kumpanyang nanloloko o nambibiktima ng mga consumers.

But the chief strategy that I adopted in MTRCB was to engage all the stakeholders, parents groups, media producers, etc. I solicited the support of various groups and facilitated their "buy-in" into MTRCB's new policy orientation of "intelligent media viewing." I made it into our common advocacy, its propagation into a shared responsibility.

Alam niyo po noong ako'y naupo bilang chairman noon, yung dating budget ng MTRCB noong panahon ni GMA, siguro mga 60 million pesos a year pero noong nag-austerity measures noong panahon ni PNoy, pagupo ko 23 million na lang ang budget. Imagine, 23 million pesos sa aming kagawaran pero nag-remit kami ng doble pa doon sa gobyerno. Minsan we have to realize that government should not be in the business of making money. Of course we need to able to stabilize certain things but we're not in the business of doing business but rather service.

Kaya tama po ang theme ninyo dito sa BSP. Financial literacy and consumer protection must be a common effort, a "shared responsibility". Your efforts to propagate consumer rights and financial literacy is important. Thus, increasing awareness of the importance of financial literacy must be made clear to all.

Financial literacy is a tool that can be used to break the cycle of poverty. We can start with improving the personal financial education of our youth. To achieve this, financial literacy classes could be incorporated into the academic curriculum. The school's goal would be to provide students with the tools and knowledge needed to make sound financial decisions and avoid costly financial mistakes. It can help them to avert things like a runaway credit card debt or worse, bankruptcy.

It's the first time in the history of the Philippines that we have a broadening middle class base especially with the proliferation of more BPOs. For the first time, more of our countrymen are enjoying the use of credit card kaya mas maraming nagbabyahe, mas maraming nakakapag-shopping. Pero katulad din ng mga nangyayari sa ibang bansa, minsan nakakaligtaan din natin na mabilis tayo mag-overspend at malaki ang interest na binabayaran natin.

A study in the US illustrated how consumers who graduated from states that made financial education mandatory, were more likely to have higher savings rates and higher net worth.

Such classes therefore, could empower young adults and help them to increase their economic security and eventually live successful lives. In turn, these individuals can potentially contribute to the establishment of vibrant communities through their savings and investments, thereby fostering economic development.

Experts have found that there is a direct correlation between a people's level of financial literacy and a country's level of economic development and the strength of its markets. People in highly-developed countries in the world all registered high levels of financial literacy - Singaporeans for example registered a 59% financial literacy rate, the Japanese 43% and South Koreans 33%. People in less-developed countries meanwhile exhibited lower literacy rates - Vietnam for instance has a 24% financial literacy rate while Cambodia only 18%.

Dapat ang mga bata pa lang maincorporate sa K+12 program kung paano makapag-save. Siguro turuan natin sila about sa stock market. It could be a friendly competition if they invest in a particular stock, who will have the highest yield at the end of a quarter. You can have programs like that. It's not just about programs like that but actually doing research of those companies.

Those have to be included in the school's curriculum. i think it's very important because if we want to be able to have more investors here in our country, I think it's better to open up our economy to foreign investments. Filipinos have to be able to have a share in those companies if they are publicly traded.

Incidentally, beginning this school-year, DepEd will start teaching financial literacy and consumer protection subjects to senior high school students curriculum. So kudos to DepEd and I think this should be a good partnership with the Central Bank...what I'm trying to say is we need to make this exciting for children and for high school students. Make it a competition--maybe the BSP can sponsor it. Choose a pilot school in Metro Manila or urban cities and make it a school event but tell them--wag lang kayong pipili based on the naririnig ninyo na magaling na kumpanya ito. Pag-aralan ninyo. These are the key criteria on why you should choose a company.

Before I end, the BSP Charter is currently being deliberated in the Senate. And I am a part of that committee and I was talking to the governor and I was assuring him that there is nothing more that we want than to make sure that our financial institutions are strong. And the Central Bank is key to that--literally key to that. So, we are going to fast-track it. The chairman of the committee, Sen. Chiz, and he works quite fast and I'm sure that we will have this approved in no time.

Definitely, BSP needs to adapt with the changing times and I completely agree that it merits the granting of additional powers to allow BSP to better cope with current global trends and developments. As such, I would like to assure all of you of my support. And for those of you who are exasperated going to work everyday because of the traffic, I also would like to assure you that in my committee we are working overtime to pass this emergency powers bill. I just want to make sure that it's FOI compliant, that it is fiscally responsible, and that it will have deliverables and a time frame on when all of those projects will be completed.

Again, thank you so much for inviting me to be part of your event.