Younger Filipinos are becoming more concerned about their financial security amid the continuing global health crisis, according to a recent study by life insurer Manulife Philippines.
Melissa Henson, chief marketing officer of Manulife Philippines, said in an online briefing Wednesday that millennials (ages 25 to 40) and generation Zs (ages 15 to 24) expressed heightened financial and mental health challenges, prompting them to take more proactive steps toward achieving financial security and personal wellness.
The report titled, “Know Your Ys and Zs: A closer look at the financial and mental well-being of Filipino Millennials and Generation Z in the time of COVID-19,” surveyed 500 respondents across the Philippines between April and May 2021, to further understand the attitudes, behaviors and habits of younger generations toward finance and personal well-being, as well as actions they are taking to achieve financial independence and improve mental wellness.
“The far-reaching consequences of the pandemic on public health, personal relationships, and the global economy have made the younger generations of Filipinos more aware of the importance of their physical, mental and financial health, and how interconnected these are to achieving optimum well-being,” Henson said.
Top concerns
The Manulife’s study showed that the top concerns millennials and generation Z are grappling with during the pandemic are running out of money, getting sick, losing their lives or their loved ones, declining mental health and drowning in debt.
Millennials and gen Zs also feel they have limited funds and limited job opportunities during the pandemic, so 77 percent of them prioritize spending more on necessities than wants. Also, 82 percent don’t want to incur debt or take loans as much as possible, 82 percent save money every pay period or every month, 75 percent follow a monthly budget and 87 percent avoid going over budget.
While they claim that at least 25 percent of their monthly income goes to savings, and they stick to a budget conscientiously, in reality, they are only able to save about 10 percent.
Financial security
Despite these constraints, the study found that 81 percent of millennials and Gen Zs started taking steps to secure their future financially because they both believe it is important to know where their money goes. In addition, 67 percent percent of millennials started investing in financial instruments, 79 percent are looking for ways to grow their money and 77 percent are exploring diversifying their portfolios to mitigate risks.
On the other hand, Gen Zs are actively educating themselves about finance, recognizing that they are not yet financially stable amid the COVID-19 situation. As they pursue ways to achieve financial security, though, they have been quite ahead of the preceding generation. Filipino Gen Zs, on average, start saving money at 17 years old and investing at 21, while millennials only began saving at 23 and investing at 27.
Moreover, 92 percent of Gen Zs plan to purchase an insurance plan in the next one to two years, with life, health and variable unit-linked products as their top considerations.
Mental health
About 53 percent of Gen Zs, particularly students, turn to social media to relieve stress and cope with the pressures of the extended lockdowns. Unfortunately, social media exposure may have added to their mental health struggles, as they consider toxic social media posts as a prominent stressor for them.
Mental health issues also affect working Gen Z and millennials, mainly due to worries about debt and the possibility of job loss.
To look after their mental well-being, Gen Zs practice various ways to improve their health. Their top-ranked activities to care for their mental health include getting enough sleep (84 percent), enjoying a proper meal (76 percent), talking to friends and family (74 percent), making time for hobbies (74 percent) and being active through fitness activities and exercise (62 percent).
Growing their money
As they take on more responsibilities at work or start to have their own families, Manulife’s study found that millennials have become more conscious and deliberate in growing their money to secure their future. While both millennials and Gen Zs own financial products, millennials’ approach to investment is more accepting of risk, while acknowledging the need for protection.
Seventy-nine percent of Millennials own insurance, 78 percent are subscribed to government savings programs, 60 percent are into cryptocurrency, 45 percent own accident insurance, and 38 percent have mutual funds.
More than 40 percent of Filipino millennials also own pension and retirement products, while 29 percent own Unit Investment Trust Funds.
Navigating volatility
Informed by these study findings, Manulife aims to introduce more financial products, investment solutions and initiatives that support mental wellness to better address these generations’ overall being.
“Unlike the generations who came before them, Millennials and Gen Zs’ most formative years have been marked by hyper-digitalization, easy access to information, rapid social, political and economic shifts, environmental issues, and unprecedented global change. Because of the pandemic, what should have been an optimistic period in their personal and professional lives has become a chapter filled with uncertainty and concern,” Henson said.
“As we strive to navigate present realities, and forge a path toward a better post-pandemic world, we find hope in the fact that younger generations of Filipinos are taking concrete steps toward making every day better for themselves and their loved ones. We aim to help them future-proof their finances, so they can achieve their aspirations and live their lives to the fullest,” Henson said.