Allianz tags ‘backlog’ in PH financial services
Consumer loans acquired by Filipinos through the formal sector remain low, European financial services firm Allianz SE noted in its latest “Global Wealth Report.”
“In 2017, consumer loans increased by 17.2 percent. However, only 14 percent of the loans were borrowed from the formal sector, indicating a huge backlog demand in the coverage of financial services,” Allianz said in the report, which analyzed the asset and debt situation of households in over 50 countries.
Citing a World Bank survey, it pointed out that only 32 percent of the Filipino population aged 15 and older had an account in a financial institution.
Also, 20.6 percent of indebted households had negative to zero financial margins and 11.7 percent had financial margins of less than 170 euros, being vulnerable to tighter financial conditions.
In the region, Allianz said that gross financial assets of private households grew by 9.7 percent in 2017 to the equivalent of 48.8 trillion euros.
“Bank deposits were once again the most popular type of investment in Asia in 2017,” it said.
Private households held a total of 43 percent of their financial assets in the form of bank balances as of the end of last year.
In second place were securities at 38 percent and in third were receivables from insurance companies and pension funds, which accounted for around 17 percent of financial assets.
Allianz said access to financial services and the level of development of the financial system were crucial to the diversification of a household’s assets.
“With societies increasingly aging, the question arises of whether households will be able to make adequate provisions to at least maintain their accustomed standard of living in retirement,” it stressed.
“In this context, it is worrying that total debts of Asian households have risen by an average of 9 percent per year in the last 10 years, while their financial assets have grown by only 8.5 percent,” it added.
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