Based on data from the Bangko Sentral ng Pilipinas, the answer appears to be yes.
Pinoys now own P13.9 trillion in savings as of March 2021. This record is the latest in a moderate uphill trend we have been seeing since 2017, so nothing new really, but what we did not expect is that COVID-19 did little to hurt the trend and in fact boosted it as more and more Filipinos are choosing to save rather than spend.
Bank deposits are up 8 percent from last year as of the first quarter of 2021. If we carve out foreign currency deposits, the number is even more impressive at 10 percent growth or P11.8 trillion.
What’s interesting here is that bank interest rates have been dropping since 2020. So it means even without the promise of good return, people are choosing to keep their money in the bank and not touch it in the meantime.
If you have yet to add your money to the P13.9 trillion or P11.8 trillion in tracked deposits, now is a good time to try as we enter the second half of 2021. Here are some tips to boost your savings.
#1 Just save it.
One of the top reasons people fail to save is that they set an unrealistic amount or commit to save only after they have paid all bills. If you do this, chances are you will fail after a few months and end up not saving at all. The key to saving is actually saving, so just set aside what amount you can now, and add to it later when you can.
#2 Pay yourself first.
Many wealthy people will tell you that their secret to saving is paying themselves first. This means whenever they get their pay or realize an income from an investment, the first thing they do is set aside a percentage as savings. The ideal is 20 percent. If this is tough, you can start with 5 percent, or 10 percent and build it up to 20 percent over time. If 5 percent is still a bit hard for you, go 2 percent, even 1 percent. The important thing is to start your saving journey, like now.
#3 Start cutting back
One way to find money to save is to spend less, which appears to be what happened to the country’s saving rate. With malls closed, and many entertainment areas not open to the public, Filipinos were able to boost their deposits amid life in lockdown. Just imagine all that gourmet coffee and sugared milk teas you did not get to drink going straight to your bank account. You and your bank account are guaranteed to come out of this healthier.
#4 Make your money work harder.
But while saving is good, making your money work harder for you is even better. With inflation rates on the rise (May 2021 is double that of May 2020), your money kept at the bank is actually losing value even as you read this. To make sure your money is making money, you have to do two things: one is to beat inflation, meaning make sure your money will grow at inflation rate so your purchasing power is not affected; and two, get a return better than inflation so you are growing your money’s value. This can only happen if you invest, and invest wisely.
#5 Set your money goals.
Nothing like a goal to keep you focused – whether it’s to take a trip to your dream destination when you are vaccinated or to go back to school and learn new skills to market yourself better. But goals usually come with a price tag so your savings will help turn these into realities. You can have as many goals as you like, from short- to long-term ones, and save for them all at the same time. Put a little in your travel savings pot, and a little in your education pot, even some in your new car or new house pot. Take advantage of the market slow down to get better deals so you can be ready to face the world healthier and money-wiser.
Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.