Ronald A. Capile
Jachelle Anne D. Terrago
New Era University
How to Cite:
Capile, R. A., & Terrago, J. A. D. (2024). Financial literacy of public school teachers in Quezon Province. NEU Likha Journal: A Refereed Journal of the New Era University School of Graduate Studies, 1(2), 1–20.
Abstract
This study aimed to determine if there was a significant difference between two groups of teachers categorized based on length of service (i.e., 1 to 15 years and 16 years and above) (the independent variables) in terms of financial knowledge, life and assets protection, and investment (the dependent variables). One-way Multivariate Analysis of Variance (MANOVA) with a sample size of 400 (computed using the G*Power based on .05 level of significance, .02 effect size, and .86 power) was used in the analysis via IBM SPSS v27. The three dependent variables taken simultaneously statistically significantly differentiated the groups of teachers, but not so when the dependent variables were examined individually. Nevertheless, in such condition, financial knowledge showed the greatest contribution (B = .141) in distinguishing the groups of teachers. In general, teachers were found highly financially literate in financial knowledge and moderately so in life and assets protection and in investment. The researchers recommend that mixed research design be done to explore further the structure/dimension of the concepts of financial knowledge, life and assets protection, and investment from the perspective of public school teachers.
Keywords: One-way MANOVA, financial literacy, financial knowledge, life and assets protection, investment
Introduction
Financial literacy has been acknowledged as a vital competency for individuals navigating an ever more intricate financial landscape. It enables individuals to make confident and effective choices within the financial aspects of their daily lives (Thavva, 2021). Moreover, Atkinson & Messy (2012) proposed that financial literacy encompasses a blend of conscious, understanding abilities, outlook, and conduct, all of which are essential for making prudent financial choices and attaining personal financial welfare.
In today’s unpredictable financial situation, teachers face challenges pertaining to financial decision-making. Nerona (2023) asserted that the growing number of loans made by Filipino teachers is an indication that they may only have modest financial literacy or sufficient financial skills to assess their financial objectives. In the same context, Chi (2023) said that public school teachers and other non-teaching personnel have faced persistent challenges in repaying their debts to the Government Service Insurance System (GSIS), a government financial institution that has been relied upon by state workers during times of financial hardship.
Prior to the onset of the pandemic in 2019, the Department of Education (DepEd) reported that teachers had accumulated outstanding loans and accrued interest from GSIS amounting to at least Php 157.4 billion. Moreover, Cruz (2019) said that at least Php 319 billion ($6.38 billion) in loans from both governmental and commercial lending institutions were being paid back by Filipino teachers.
Furthermore, since 2017, there has been a notable growth of Php 18 billion outstanding loans of public school teachers. Newly recruited, inexperienced teachers who do not have yet salary pay slips run the danger of falling for the deceptive “5-6” scheme. Unreliable lenders who charge a high interest rate of 20% are involved in this scam. Another primary cause of teachers’ financial challenges, according to Representative Castro of the Alliance of Concerned Teachers (ACT), is the loan shark scheme. These lenders ask for the ATM cards of the teachers as collateral, a scheme that is known to have bred financial and social problems.
Apparently, the number of teachers involved in various loans is remarkable. Dr. Leonor M. Briones, the former DepEd secretary, thought that part of the solution to teachers’ debt was to raise the pay. To boost the salary of government employees, the Salary Standardization Law (SSL) of 2019—also known as House Bill No. 5712 and Senate Bill No. 1219—was signed into law on January 8, 2020. Employees such as teachers would be given an additional 15% pay increase over three years beginning in January 2020. Salary grades 1 through 17 would see a bigger increase, whilst salary grades 18 through 33 would see a smaller one (Cervantes, 2019). An entrylevel Teacher 1 (Salary Grade 11) in SSL 5 fourth tranche, beginning January 1, 2023, receives a gross base salary of Php 27,000.00. This is an addition to already existing benefits of teachers such as chalk allowance, clothing/ uniform allowance, mid-year bonus, year-end bonus, cash gift, Productivity Enhancement Incentive (PEI), Performance-based Bonus (PBB), and 70 days Proportional Vacation Pay (PVP). For teachers to manage their finances without excessively relying on loan institutions, Briones further underlined the necessity to promote financial literacy among teachers (Malipot, 2017). Former Secretary Briones said that public school teachers in the Philippines are neither undervalued nor underpaid (Yee, 2017). Furthermore, according to Education Secretary Duterte, the DepEd has been working closely with the GSIS to tackle the enduring issues faced by the teachers. Additionally, the Secretary mentioned that the DepEd is currently evaluating the Magna Carta for Public School Teachers and engaging in discussions with members of the House of Representatives and the Senate regarding potential revisions (Chi, 2023; Cervantes, 2023). Due to its potential impact on teachers’ personal financial well-being and overall satisfaction with their work, financial literacy among public-school teachers is a subject that is gaining more attention. Teachers are crucial in forming the next generation, but they frequently struggle with money issues.
Therefore, it is important to determine the financial literacy of public school teachers and to explore the specific areas of financial literacy (i.e., financial knowledge, life and assets protection, and investment) where public school teachers may be lacking. The study aimed to answer the following research questions and hypotheses.
Research Questions
- Is there a statistically significant difference between the groups of publicschool teachers (categorized based on number of years in service) on alinear combination of financial knowledge, life and assets protection, and investment?
- Which of the three dependent variables has the greatest contribution indistinguishing the group?
Method
Population and Sampling
The target population consisted of all public teachers in the province of Quezon, Philippines. Using the G*Power version 3.1.9.7, the sample size was computed based on significance level of .05, effect size of .02, desired power of .86, and one-way MANOVA as the statistical test. The achieved sample size of 396 was rounded up to 400.
This study utilized two-stage random sampling technique. First, four districts were randomly selected from the six school districts of Quezon. A list of all public school teachers was obtained from each of the four districts and each teacher on the list was given a number. Random numbers were generated using MS Excel and those names who corresponded to the random numbers were selected as respondents. One hundred teachers (100) were randomly selected from each district.
Demographic Profile of Respondents
The respondents’ demographic profile shows that the genders are distributed almost equally, with a slightly higher representation of females (51.5%) (Table 1). Most of the respondents were between the ages of 31 and 40 (43%); had a bachelor’s degree (73.8%); are married (60.3%); came from urban places (61.5%); and had loan (80%). Teacher I was the most common teaching position among respondents (57%) and most of the teachers have taught in the public school from 1 to 15 years (67.5%). The sample was predominantly composed of teachers from Junior High School (44.50%).
Source of Data
A survey questionnaire was used to collect data. The survey questionnaire had two parts. The first part collected demographic information (i.e., age, gender, civil status, years in public service, educational attainment, school location, school level and loan status). The second part consisted of 15 items that measured teachers’ financial literacy level in terms of a) financial knowledge, b) life and assets protection, and c) investment.
Validity and Reliability
The financial literacy variables in the questionnaire were adopted from the works of Surendar and Sarma (2018). The final version of the questionnaire used in this study was subjected to face and content validity by the researcher and his adviser. In terms of reliability, the researcher computed the internal consistency using IBM SPSS v27. The overall Cronbach’s alpha was .75.
Administration and Retrieval
A request letter for permission to conduct and gather data was sent to the Division of Quezon Province. The Data Protection Officer shared a copy of Data Sharing Agreement which was notarized. Upon approval, the survey questionnaire was administered through an online platform.
Scoring the Questionnaire
The questionnaire has scales to interpret the financial literacy level of the respondents. Respondents were asked to answer each question using a 5-point Likert scale where 5 is “Strongly Agree”, 4 is “Agree”, 3 is “Neutral”, 2LIKHA JOURNAL 2024 9is “Disagree”, and 1 is “Strongly Disagree”. The average of the item scores was used as index for financial literacy level with interpretation presented in Table 2.
Data Analysis
One-way Multivariate Analysis of Variance (MANOVA) was used to compare two groups of teachers (those with 1 to 15 and those with 16 and above years of service) (the independent variables) in terms of financial knowledge, life and assets protection, and investment (the dependent variables). The following assumptions of MANOVA were addressed and met.
Assumption 1: Multivariate normality
Testing of multivariate normality was approximated using test of univariate normality. Results of Kolmogorov-Smirnov tests showed that the dependent variables were normally distributed in each group of teachers (p > .05).
Assumption 2: Absence of univariate or multivariate outliers.
The absence of data points outside the boxplot of each group indicated that there were no univariate outliers in the data (Figure 1). Moreover, the values of Mahalanobis distance were computed and compared to the critical values of chi-square (χ2) distribution with degrees of freedom equal to the number of dependent variable and an alpha level of .001 (i.e., p < .001). All values of Mahalanobis distance were less than the critical value of 16.27 which indicated that there were no multivariate outliers in the data.
Assumption 3. No serious multicollinearity among the dependent variables
The three dimensions of financial literacy were moderately positively
correlated to each other with Pearson r ranging from 0.3 to 0.5 (Table 4). This
indicated that there was no evidence of adverse multicollinearity.
Assumption 4: Linear relationship between the dependent variables for each
group of independent variables.
The scatterplot matrix shows that data points form a linear pattern (Figure
2) Thus, the assumption of a linear relationship between the dependent variables
for each group of independent variables was met. This finding was supported
by the significant correlation between the two dependent variables (Table 4).
Assumption 5: Homogeneity of variance-covariance matrices.
Nonsignificant Box’s test showed that there was a homogeneity of variance-covariance
matrices of the dependent variables, F = .384, p = .890.
Results and Discussion
The first research question refers to determining whether or not a difference in financial literacy between two groups of teachers exists. Overall, on the average, the teachers who took part in the study regarded themselves as moderate financial literacy in terms of financial knowledge (M = 3.58, SD = 1.07). Teachers who served in the public school from one to 15 years reported higher financial knowledge score (M = 3.19, SD = 0.84) than those with 16 years or more of experience (M = 3.05, SD = 0.85). On the other hand, teachers reported a moderate level of financial literacy both in relation to life and assets protection (M = 3.40, SD = 1.36) and investments (M = 3.39, SD = 1.39). Teachers who had been in the profession for 16 years or more reported higher level of financial literacy in these two dimensions than those with one to 15 years of experience (Table 6).
The result of one-way MANOVA shows that the difference between the two
groups of teachers was statistically significant on combined dependent variables, F(3, 396) = 2.765, p = 0.042, Wilks’ Λ = .979, small effect size (partial η2 =.021). A follow-up univariate ANOVA shows that groups of teachers were not significantly different in terms of financial knowledge F(1, 398) = 2.43, p =.120, life and assets protection F(1, 398) = 1.54, p = .216, and investment F(1, 398) = .76, p = .383. In this case, the multivariate analysis was able to detect significant differences between the two groups of teachers that the univariate ANOVA failed to find.
The second research question covers the identification of the variable
with the greatest contribution in distinguishing the two groups of teachers.
Consistent with the results of univariate ANOVA, financial knowledge (t =
1.558, p = .120), life and assets protection (t = -1.24, p =.216), and investment
(t = -.873, p = .383) did not statistically significantly distinguish the groups
of teachers when these variables were examined individually. Nevertheless,
based on the estimates of the parameter of beta when the dependent variables were taken collectively, the variable financial knowledge (B = .141) has the greatest contribution in distinguishing the groups of teachers (Table 9).
The high level of financial knowledge reported by teachers in this study
was consistent with the findings of Elmina (2021) in which teachers concurred
that they had fundamental knowledge in areas such as the time value of money,inflation, risk diversification, except varied applications of financial products. However, the findings of this study contradict the results of Gutti (2021), which indicated that only 23% of teachers possessed advanced financial knowledge. Furthermore, Casingal & Ancho (2021) discovered that public school teachers have a tendency towards overconfidence in their financial knowledge. Most teachers have the belief that they possess a sufficient level of financial literacy, although their actions and behaviors contradict this notion. Despite being aware of the significance of insurance, teachers have either insufficient coverage or have not obtained any insurance pertaining to life, health, and property. Additionally, teachers strongly agreed that their investment was appropriate for their income. However, their knowledge about investment savings appeared to be limited, as evident from the moderate rating given on survey items such as investment portfolio review, investing based on the opinion of others, risk assessments for
various investments, and personal financial planning for both short-term and
long-term investments. Because of this, further research on this topic is highly recommended. Future researchers may explore a mixed research design to have a deeper understanding of the financial literacy of teachers and include all financial dimensions in measuring the financial literacy level of teachers.
References
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