Caught in a Debt Trap? An Analysis of the Financial Well-being of Teachers in the Philippines

Abstract

Since the Teacher Advancement for Optimum Well-being or the Project TAO Survey conducted in 2000 by the Philippine Senate, which made a comprehensive study on the well-being of public school teachers in the country, there's has been a dearth of researches that provide empirical data on the current status of the financial well-being of the public school teachers in the country that can inform public policy on the matter. Specifically, this research seeks to investigate the phenomenon that many public school teachers in the country are caught in a “debt trap.” A survey was conducted in two regions, utilizing an adopted version of the instrument used by the Financial Industry Regulatory Authority (FINRA) Investors Education Foundation in the 2012 National Financial Capability Study (NFSC) in the United State and a fourstages stratified cluster sampling determined the 710 public school teachers-participants in the of which 239 are elementary school teachers and 471 are high school teachers. Descriptive statistics such as frequencies and percentages were computed to examine the respondents' household condition and income; their perception on their debt situation and the factors that made them vulnerable to onerous debt and usurious lending. Results revealed that the financial well-being of public school teachers is serious, characterized by burgeoning debt problem and low net income. Contributing to these problems included impaired capability of the spouses of the teachers to earn income for the family, low level of housing ownership and significant housing debt, insufficient skills in managing money and financial planning, and the high incidence of informal credit utilization. Several policies and programs of the government pertaining to teacher's welfare were suggested to be reviewed specifically the effectiveness of Republic Act. 4676, the “Magna Carta for Public School Teachers” in addressing the current financial challenges of the public school teachers.