1

CHAPTER I

INTRODUCTION

Background of Study

The level of knowledge is a significant factor in the access of financial services.

(Llanto, G.M. & Rosellon, M.D, 2015). Adults with low level of knowledge are less likely

to value the importance of transacting with financial institutions, own a savings account,

or access credit and insurance products and services. Education can be a measure of

knowledge, skillset and capacity to make decisions; hence it is often used as a measure

of financial knowledge and capability to participate in financial markets. Financial

knowledge allows individuals to decide whether to save, apply for a loan, or get

insurance depending on their needs and preferences (Martinez et al 2013). It is

essential that students and youths have ability to appreciate or recognize the value of

financial services offered by financial institution from an early age, as it will serve them

in good stead as they progress through life.

Knowledge of the importance and benefits of availing financial services offered

by financial institutions can influence positive change in behavior and attitudes toward

money practices such as savings, spending, investment, insurance and risk

management which results to patronage of the products of financial services. Having an

understanding and knowledge of money matters not only impacts sound financial

decision making but also the financial health and confidence of the individual enabling

him to deeply value the significance of the products of financial institutions. (Norman,

2010; Tschache, 2009).

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This study is in support to financial inclusion which has become a policy objective

for developing countries such as Philippines aiming at inclusive economic growth and

poverty reduction. Theoretical and empirical studies suggest that financial systems

serving the low-income segment of society promote pro-poor growth (Hannig and

Jansen, 2010). Access to finance allows the poor to accumulate assets like savings and

insurance to protect them from potential risks and shocks, and invest in income

generating activities. In this context, financial sector development in developing

countries has increasingly focused on measures toward inclusive financial systems. In

this regard, the Philippine policymakers have exerted efforts to improve financial

inclusion, education and regulation (Llanto, 2017).

Notwithstanding present efforts at greater financial inclusion, the Bangko Sentral

ng Pilipinas (BSP) finds that access to financial products and services remains a

challenge. Only about 43 percent of the adult population in the Philippines save while 68

percent keep their savings at home; a big portion of the population who borrow (72%)

transacted with informal resources; and only about 30 percent of small and medium

enterprises (SMEs) have formal lines of credit and/or bank loans. Twelve percent of

local municipalities have no access to banks or other financial service providers.

Moreover, while the Philippines is considered a leading pioneer in mobile financial

services, only a small percentage of payments are transacted electronically (Llanto and

Rosellon, 2017).

Access and use of financial services are an important tool for consumption

smoothing, making productive investments, and coping with catastrophic risks.

Particularly, keeping money for a specific purpose is important and having ways and
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means to do so are likewise important. As for insurance, about 8 out of 10 adults

believe that insurance will provide financial aid when unexpected circumstances

happen, and disagree that insurance are for the rich. About 80 percent of adults

expressed desire to access to save and acquire insurance; while a lower proportion,

about 56 percent, desire to avail of credit in formal financial institutions (Llanto and

Rosellon, 2017).

This is the reason why the study is undertaken. This study aims to know the level

of knowledge and patronization of MPSPC-Bontoc students on financial services offered

by financial institutions specifically savings and fund transfers as they are the services

that can generally be availed by students. In addition, it also aims to come up with

measures such as advocacy programs to improve the students’ financial knowledge nd

inclusion. As was said by Llanto, G.M. & Rosellon, M.D, being knowledgeable about

these services will encourage a person to patronize them since he is able to appreciate

their significance.

Review of Related Literature

Knowledge of Filipinos to Services Offered by Financial Institutions

Financial literacy, financial knowledge and financial education are used

interchangeably in formal literature and popular media. Various sources provide various

definitions to financial literacy, but have one thing in common – everything revolves

around money, knowledge and use. Mandell (2009) defines financial literacy as “the

ability to use knowledge and skills to manage one’s financial resources effectively for

lifetime financial security.” Huston (2010) explains that financial knowledge is made up
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of two elements: understanding and use. Meanwhile, Hastings, et al (2013) refers to

financial literacy as knowledge of financial products, knowledge of financial concepts,

having the mathematical skills or numeracy necessary for effective financial decision

making, and being engaged in certain activities such as financial planning.

There is substantial evidence that lack of financial knowledge and skills

contributed to the recent global financial crisis. It is a well-accepted hypothesis that

limitations in consumers’ ability to fully understand the financial products and risks they

had taken on, contributed significantly to the worst financial crises since the great

depression (Geradi et al. 2010; Klapper et al. 2012).

The financial literacy level of the average Filipino remains alarmingly low – a

problem that begins with poor childhood education that persists until their adult years,

according to the country’s financial regulator. In a statement, the Bangko Sentral ng

Pilipinas (BSP) said Filipino adults could correctly answer only three out of seven

financial literacy-related questions covering basic numeracy, computing compounding

interest, fundamentals of inflation and investment diversification. Citing the results of a

study by the World Bank, the BSP said only 2 percent of Filipino adults answered all

questions about financial literacy correctly. “The study also showed that Filipinos lack

specific knowledge to make informed financial decisions,” the central bank said,

stressing that financial education was an “imperative,” considering the country’s low

financial literacy levels (Lucas, 2018).

Improving financial literacy and broadening access to financial institutions like

banks and insurance companies are key to achieving financial inclusion in the country.

This was according to a study by state think tank Philippine Institute for Development
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Studies (PIDS) on factors affecting financial inclusion in the Philippines. The research

showed that more educated individuals are more likely to have savings and insurance

than their less educated counterparts (Llanto and Rosellon, 2017).

“The BSP believes that a financially-learned citizenry can be more effective in

productively contributing to the Philippine economy,” BSP Governor Nestor Espenilla Jr.

said. “To date, financial education remains a formidable task, one that requires

coordinated multi-stakeholder action.” Moreover, the central bank also pointed to a

growing body of literature indicates that a financially literate population was able to

make better financial decisions, have higher levels of savings and diversified

investments, and were more competent in managing and safeguarding finances (Lucas,

2018).

Moreover, Llanto and Rosellon said that the first step to encourage people to

access banks and other formal financial institutions is to improve people’s education. “A

higher level of education increases the likelihood of saving and borrowing from a formal

financial institution.”

Furthermore, ownership of a bank account that can be used to save and receive

money, as well as pay bills, is a basic indicator of financial inclusion as a result of being

financially literate. In the 2017 Financial Inclusion Survey (FIS), the central bank cited

some reasons for not having an access on bank which consist of lack of knowledge on

how to open an account, joblessness, and lack of awareness. As for an approximate

breakdown of the 22.6 percent of adults who do own bank accounts, 11.5 percent of

them are in the formal banking sector. Around 8.1 percent are in non-government

microfinance organizations, 2.9 percent are in cooperatives, and 0.3 percent are in non-
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stock savings and loan associations. Only 1.3 percent of adults have electronic (e-

money) accounts (Luchi de Guzman, 2018).

Financial knowledge and skills are even more important in an environment where

financial products are increasingly complex and being delivered through new

distributions channels. In line with global trends, policy makers in the Philippines

recognize the importance of financial knowledge and skills (financial literacy) for

peoples’ ability to take informed financial decisions and to benefit from the financial

services they use. Financial supervisors in 81 economies are currently involved in

financial capability enhancing activities according to the WB’s 2013 Global Survey on

Consumer Protection and Financial Literacy which interviewed regulators involved in

financial consumer protection in 114 jurisdictions from all regions.

Furthermore, financial knowledge gap identified through the objective financial

literacy quiz conducted by World Bank Group (2015, July) on Enhancing Financial

Capability and Inclusion in the Philippines are largely confirmed through participants’

subjective self-assessment of their levels of awareness and understanding of financial

concepts. Likewise, a better understanding of basic financial concepts is strongly

associated with individual characteristics such as completed tertiary education, higher

income, and the usage of print, broadcast, and internet media on a regular basis.

Patronization of Filipinos to Services Offered by Financial Institutions

Financial Institutions have a variety of services to offer with matching benefits to

its customers as was discussed in the preceding paragraphs. However, based on the

study conducted by Banko Sentral ng Pilipinas on 2017, 86% of Filipino households do

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not have bank accounts. While according to the study conducted by National Baseline

Survey on Financial Inclusion in 2015 they determined the following information

regarding the usage or involvement of Filipinos with the specific services offered by

financial institutions.

For the Involvement of Filipinos with Financial Institutions as to Savings, they

observed that 4 out of 10 Filipino adults (43.2%) currently have savings, 32.3% used to

save in the past but stopped saving money, while the remaining 24.5% have never

experienced saving money.

They found out that 65% of those adults who are not saving in banks cited lack of

money as the main reason for not having a bank account. The other reasons include the

lack of need for a bank account (16.9%), limited knowledge and capability to manage an

account (16.8%), cost (11, 2%), distance of the bank (7.6%), and failure to meet

documentary requirements (4.6%), among others.

As to loans, most Filipinos have or had debt but only 47.1% of adults borrow

money in banks, while 33.8% did so in the past and do not borrow anymore. Only

19.1% of adults do not borrow at all.

Based on the study they conducted the primary considerations in borrowing

money are interest rate (57.5%), loan amount (41.7%), period to pay for the loans

(35%), and ease of loan application (33.1%). Reputation of the credit institution or

lender (24.5%), amortization (14.9%), collateral (14.3%) fees and other charges

(11.4%), and processing time (11%) are also considered.

During their survey, they were also able to determine the patronization of

Filipinos as to the Payments and Remittance Services offered by Financial Institutions.

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They observed that Filipino adults are most aware of ATMs as means of sending and

receiving money or remittances to/from persons. 69.2% are aware of ATMs; followed by

pawnshops (65.5%) and remittance agents (62.4%). Among those who are aware of

remittance channels, most people have experienced using remittance agents at 63%,

followed by pawnshops (51%) and ATMs (38%).

For those Filipino adults using payment and remittance services, their purpose of

remittances received is mainly for food (71%). Some other uses are for education

(39%), medical expenses (28%) and emergencies (22%). Very few cited using the

remittance for productive purposes such as buying assets (13%) and starting a

business (6%).

For insurance, based on the study conducted Filipino adults are most aware of

health insurance (77.7%), life insurance (67.3%) and accident insurance (60.3%). There

is low awareness of micro insurance (14.5%), lower than other non-life insurance

products like vehicle (47.4%), fire (39.1%) and building (32.2%) insurance, but slightly

higher than cellphone insurance (9.5%).

They determined that the most common reason given for not having life, health

or accident insurance is lack of money. The second most common reason is the

perception of high cost. The most common reason for not having vehicle insurance,

building insurance, cellphone insurance and micro insurance is the perceived lack of

need for these types of insurance products.

“It pays to be wise with the way we handle money- that’s what this survey is

telling us,” said World Bank Country Director Motoo Konishi. If people have more

knowledge about money matters, this can help them access financial services.
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Promoting financial literacy is therefore important to achieve greater financial inclusion

and boost the growth of micro and small enterprise.

Factors Affecting the Level of Patronization of Products and Services offered by

Financial Institutions

In the study of Savyanavar and Patel (2015), it states that Bank reputation,

potential benefits, quality service are important factors which are influencing customers,

their study also reveals that technology plays an important role in the selection of banks

by customer. In today’s environment, customers require more and more personalized

and value-added services like ATM, e-Banking, and mobile banking. In

supplementation, customer service is also a factor affecting patronization of financial

institutions, in an article titled Factors that Influence the Consumer Behavior on Choices

of Local Commercial Bank for Banking Products and Services in Perak (2016),

customer service was found out to have a significant effect on consumer behavior

towards patronizing the services offered by Financial Institutions.

There are many different reasons why the poor do not have access to finance,

loans, savings accounts, insurance services. Social and physical distance from the

formal financial system may matter. According to Aslı Demirgüç-Kunt (2015) the poor

may not have anybody in their social network who knows the various services that are

available to them. Lack of education may make it difficult for them to overcome

problems with filling out loan applications, and the small number of transactions they are

likely to undertake may make the loan officers think it is not worthwhile to help them.
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“One reason Filipinos don’t avail from financial institutions is simply because of

lack of awareness or lack of knowledge on the matter,” Riza Mantaring, CEO of Sun Life

Financial (2017), stated. In addition, availing of these services is not intuitive and not

taught at home. No matter how beneficial it can be to its users, some still have no idea

about it the leading stock market advocate, Marvin Germo (2017), said.

In a survey conducted by Worldbank, Enhancing Financial Capability and

Inclusion in the Philippines-a Demand Side Assessment (2015) it was found out that

those who are knowledgeable of the significance of financial institutions are able to

utilize their money well through saving, investing, availing of fund transfers, loan and

others since they are aware of the benefits it could give them.

Also, according to the same survey conducted by World Bank, some simply don’t

avail because they lack the need of it because they are not faced with situations that will

urge them to transact with financial institutions. Specifically, 18% stated that they are

not in need of savings account.

As financial institutions are likely to be in richer neighborhoods, physical distance

may also matter. Leading to another factor that can contribute to the patronization of

financial institution’s services is there accessibility to potential users. According to

Banko Sentral ng Pilipinas (2015), despite the efforts to increase branches and

Automated Teller Machines in the country, significant areas still have no access to

them. In particular, there are still 595 municipalities across the country still without

access to banks and financial institutions. This is because of the remoteness or the

presence of demand in the said areas. Although the Philippines has made some
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progress in promoting an inclusive financial system over the years, increasing access to

financial services still remain challenging (Banko Sentral ng Pilipinas,2015)

Access to financial services remains an important challenge especially in an

archipelago comprising 7,107 islands with a population of more than 92 million people.

The governments can improve access by increasing competition in the financial sector.

As financial institutions find their traditional business coming under competition, they

seek out new lines of profitable opportunities, including lending to the SMEs and the

poor. Given the right incentives, private sector can develop and make use of new

technologies to reach the underserved.

Measures to Improve Knowledge and Patronization of Products and Services Offered

by Financial Institutions

National Financial Education Strategy can be an important organizing framework

to scale up and maximize effectiveness of various interventions on financial education in

the Philippines. (World Bank Group, 2015) Such an effort at the national level can

promote co-operation between relevant stakeholders, avoid duplication of resources,

and minimize gaps and overlaps in addressing the challenges identified through this

survey. The strategy should outline a set of priority programs to enhance financial

capability levels of the overall population and specific subgroups. Priorities could be set

based on a number of criteria, including the need, goals, costs and availability of

resources. Other essential elements of such a document include the roles and

responsibilities of all involved stakeholders, the main groups which shall be targeted, a
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framework for monitoring and evaluation, and most importantly the resources for the

implementation of the strategy. (OECD/INFE High Level Principles on NFES, 2008)

Also, use of mass media and edutainment in particular, can be an effective

channel in delivering financial education to adults. Recent research has shown that

conveying financial messages through innovative ways such as using popular TV soap

operas, films, videos or radio programs can be quite effective, not only in improving

knowledge but also in altering behavior (Berg and Zia 2013). “Edutainment programs

are also presumed to be more effective if messages are delivered in an engaging and

entertaining manner through appealing stories that stick to memories, and if they are

repeated and reinforced over time,” Berg and Zia agreed. For instance, according to an

article entitled Enhancing Financial capability and Inclusion in the Philippines by World

Bank group (2015), in Kenya, a soap opera with more than six million viewers,

‘Makutano Junction’, incorporated financial education messages into some of its stories.

These messages aim to encourage people to save regularly or to open a bank account,

rather than to keep money under a mattress. Other examples of the use of

entertainment education for finance are ‘Scandal!’ in South Africa or ‘Mucho Corazon’ in

Mexico. As with other soap operas, people watch these edutainment dramas because

they identify with the characters and enjoy the stories; but in the course of watching the

shows, they benefit from the financial capability enhancing messages and ultimately

change their behaviors. At the same time some research findings indicate a possible

short-lived impact of these interventions (Di Maro et al. 2014). Further review and

analysis of experience and exploring options for testing such methods in the Philippines

in partnership with private sector and NGOs could help establish information basis for
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determining the role such methods could play in the broader financial education efforts.

(World Bank, 2015)

“In addition to TV and radio programs, possible channels to specifically reach out

to young adults include youth development associations; mobile applications, as well as

social media websites which are popular with the youth. For instance, in Malaysia, the

Credit Counseling and Debt Management Agency (AKPK) undertakes an initiative

known as ‘POWER!’, which is targeted at young adults and first-time borrowers and

which aims to equip them with practical money and debt management skills, which will

help them to become more financially responsible adults. AKPK also provides briefings,

docu-dramas, e-newsletters, a handbook, classroom exercises, and has also created a

social media website. In view of the fact that according to this survey around 85 percent

of young adults uses mobile phones on a regular basis; mobile applications could be

another promising outreach channel. A good example of a mobile app is the mobile

budget app (Mobile Financial Assistant – maFin) which has been developed for young

adults by the polish Financial Supervision Authority. This mobile app is designed to help

monitor and analyze personal spending and to facilitate budget planning and which is

available free of charge to users of mobile phones and other mobile devices.” World

Bank Group (2015)

As recommended by World Bank in Enhancing the Financial Capability and

Inclusion in the Philippines (2015), scaling up integration of financial capability programs

into existing conditional cash transfer initiatives (CCTs) in the Philippines can help

improve long-term financial decisions of vulnerable segments of the population. Around

the world CCTs have been shown to affect people’s investments in health and
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education (Benhassine et al. 2014). CCTs may also provide an opportunity to take

advantage of so called teachable moments which are moments in people’s lives when

they are more receptive to receiving information and are consequently more likely to

acquire and retain knowledge. The Pantawid Pamilya program in the Philippines with

four million beneficiaries may provide a good opportunity for enhancing the ability of

beneficiaries and their families to manage their daily finances and to make provisions

for old age expenses. BSP in collaboration with the Department for Social Welfare have

already introduced financial education elements in this ongoing CCT program. The next

steps could involve evaluation of the effectiveness of these efforts in particular in terms

of the suitability of learning materials and consistency of delivery. World Bank stated in

its article, Enhancing Financial Capability and Inclusion in the Philippines (2015).

Over the medium to long-term it is recommended to scale up and mainstream

initiatives for school-based financial education programs as the survey results (World

Bank Survey 2015) suggest that starting early can have large payoffs. If people form

sound habits on how to manage their money from a young age, they are more likely to

adhere to them throughout their lives. There are lessons learned from other countries

which have implemented such programs. For example, the rigorous evaluation of a

large scale school-based financial education program in Brazil showed that such

programs are particularly effective when financial education is provided in ways which

students find relevant to their lives either currently or in the near future, and if it is

interactive (Bruhn et al. 2014). High-quality material or textbooks are required, and

teachers need to be well-trained on the content and techniques. There are a number of

websites containing links to teaching resources. The BSP collaborated with the
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Department of Education in the development and integration of lessons on financial

education in the elementary curriculum. BSP in partnership with Department of

Education may wish to explore a possibility of the development of a curriculum that

integrates financial education as one of the core subjects. This would not only ensure

that financial education is actually taught, but it will also provide sufficient time for its

teaching. (World Bank, 2015)

Moreover, it is suggested to go beyond financial capability enhancing programs

and evaluate possibilities of the use of nudges and reminders, default options, as well

as smart product design. (World Bank Group, 2015) Studies in Bolivia, Peru, and the

Philippines show that simple, timely text messages reminding people to save can boost

savings rates in line with earlier established goals since Filipino adults struggle with

long-term financial decision making, periodic reminder messages could induce them to

attend to the benefits and tasks of saving regularly and putting money aside for old

expenses. (Karlan et al. 2010) Another experimental study, also by World Bank on

2015, from the Philippines shows that commitment devices can have a strong and

positive effect on people’s financial behavior. Specifically, the study shows that

individuals who had been offered and used savings accounts without the option of

withdrawal for six months, increased their savings by 82 percent more than a control

group that was not provided with such an account.

Conceptual Framework

“Financial inclusion should be a collective responsibility and a shared

accountability among BSP and other players, the financial institutions and the financial
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consumers”-Tetangco, 2015. That being said, this paper is designed to uphold financial

inclusion to potential customers as young as students especially now that the society is

moving towards efficiency and safety of financial transactions. Students, being

knowledgeable customers of the hows and whats of the services offered will enable

them to fully enjoy the benefits of availing such transactions. Empowering the students

through this research will enable them to cope up with the requirements. Especially now

that government grantees in MPSPC such as those under CHED and NCIP are required

to apply for savings accounts and ATM cards for a safer and faster processing of their

cash grants. Also, most students are dependent on the money given them by their

parents. It is therefore crucial that they are to be taught on how to properly safeguard it.

One good example is through opening a savings account and making use of reliable

methods of fund transfers for security. And what better way is there than savings

account and availing fund transfer services offered by Financial Institutions? Aside from

offering cash transfers with just a click of the fingers, it also offers a secure line for

transfers of fund since it reduces the risk of misplacement and theft due to manual

transfers.

Further, introducing students to financial inclusion will prepare them for the future

since most employees are encouraged to open their own savings account for a secured

and more efficient receipt of their salary. It could also be useful in paying taxes through

the Electronic Filing and Payment System (eFPS). Many financial transactions

nowadays especially those on online also need bank accounts to accomplish. If not,

fund transfers are being used to send and receive money for transactions with distant

places like buying and selling items online.

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This paper covers the products and services of financial institutions specifically

savings services and fund transfers. Like what our wise grandmothers say, “be cautious

with every penny”, opening savings accounts and availing of fund transfers through

financial institutions is an efficient means to receive and send money out of harm’s way.

The researchers identified course as their moderator. Being able to identify the

students’ knowledge and patronization based on this moderator will help the proponents

in providing measures that can improve their knowledge regarding its importance and

benefit focusing or prioritizing those students from the identified courses that have low

appreciation of the services.

The recommended programs to improve the patronization of the students on

services offered by financial institutions, as one of the major objectives of this paper, are

to be spearheaded by the Department of Accountancy hand in hand with the SSDO in

collaboration with the financial institutions. Since it is a mission of the school and an

objective of the Accountancy Department to produce competitive students, empowering

them with knowledge on the importance and benefits of financial institutions will help

them succeed on their financial decisions and plans now and in the future.

The following paradigm of the study illustrates that determining the patronization

and knowledge on services offered by financial institutions of MPSPC students

regarding selected services offered by financial institutions can help the researches

come up with advocacy programs like seminars and mass information dissemination

through social media to boost their knowledge and financial inclusion.

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INDEPENDENT VARIABLE DEPENDENT VARIABLE

1. Level of knowledge of
MPSPC-Bontoc students on
services offered by financial
institutions.
Programs to improve the
patronization of MPSPC-
Bontoc students on
2. Frequency of patronization services offered by
of MPSPC-Bontoc students
on services offered by Financial Institutions
financial institutions

3. Relationship of level of
knowledge and frequency of
patronization of MPSPC-
Bontoc students on services
offered by financial
institutions

Course

MODERATOR VARIABLE
Figure 1.1 Paradigm of the Study
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Statement of the Problem

The study aims to answer the following problem:

1. What is the level of knowledge of MPSPC-Bontoc students on services offered

by Financial Institutions?

1.1 Is there a significant difference on the level of knowledge of MPSPC-Bontoc

students on services offered by Financial Institutions in terms of course?

2. What is the frequency of patronization of MPSPC-Bontoc students on services

offered by Financial Institutions?

2.1 Is there a significant difference on the frequency of patronization of MPSPC-

Bontoc students on services offered by Financial Institutions in terms of

course?

3. What is the relationship of knowledge and patronization of MPSPC-Bontoc

students on services offered by Financial Institutions?

Null Hypothesis

1. There is no significant difference on the level of knowledge of MPSPC-Bontoc

students on services offered by Financial Institutions in terms of course.

2. There is no significant difference on the frequency of patronization of MPSPC-

Bontoc students on services offered by Financial Institutions in terms of course.

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Scope and Delimitation

The study is limited to the knowledge and patronization of the enrollees of

MPSPC-Bontoc for the school year 2018-2019 regarding the services offered by

Financial Institutions.

Services offered by financial institutions are narrowed down to include savings,

and fund transfers only since are the commodities that are most commonly availed by

students.

Importance of the Study

This study aims to research on the level of knowledge and patronization of the

students MPSPC-Bontoc towards services offered by financial institutions. Through

research, questionnaires and other references, this study aims to benefit the following:

To the students of MPSPC and other potential customers of Financial

Institutions, this research aims to come up with strategies in order to improve their

knowledge and patronization and help them value the importance of availing the

services offered by Financial Institutions.

Most students are still reliant on their guardians for financial support. Students

who are not from Bontoc have that need to travel to their hometowns to ask for

allowance otherwise sent to them through friends and relatives if not wired. Money is

not drawn from thin air so this is where the importance of safe and efficient fund

transfers comes in. Efforts and resources also chances of loss are risked during manual

transmissions.
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Recognizing the importance of savings and fund transfers as services and

products offered by financial institutions will set the starting line for students to practice

secured and safety transactions. This will open them opportunities to wise fund

management and financial success. Grasping the real value of these services will help

them come up with wise saving decisions and save them from strenuous and unsecured

transactions and transfers involving money that will benefit them not only now but in the

coming future.

To the Financial Institutions, a clearer understanding of the characteristics and

preferences of the respondents who can be potential customers.

To the institution, that this paper can give them an insight on conducting activities

and information drives to increase the knowledge of its students on the services of

financial institutions and its importance.

To the researchers, conducting this research will help them appreciate and

improve their knowledge on the importance of financial education and services of

financial institutions

To other researchers, this study aims to become a useful reference in conducting

their future research papers.

Definition of Terms

Factors refer to the element affecting the patronization and knowledge of products and

services of financial institutions.

Financial Inclusion refers to the access of customers to services offered by financial

institutions
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Financial Literacy refers to the knowledge of financial products, knowledge of financial

concepts, having the mathematical skills or numeracy necessary for effective financial

decision making, and being engaged in certain activities such as financial planning.

(Hastings 2013)

Financial Institutions refer to those engaged in the business of dealing with financial and

monetary transactions, such as deposits, loans, investments currency exchange and

fund transfers.

Fund transfer refers to services that will offer students a secured and easy transfer of

funds like Western Union, Cebuana Lhuillier and others.

Knowledge refers to the awareness and appreciation of students to services offered by

financial institutions

Products and Services refers to those offered by financial institutions which are

narrowed only to refer to savings and fund transfer.

Savings account refers to the most basic type of account at a bank which allows the

students to deposit money, keep it safe and withdraw funds as needed.

Students refers to the students of Mountain Province State Polytechnic College as of

the first semester for the year 2018-2019.

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Chapter 2

Design and Methodology

This Chapter presents the research design, locale and population of the study,

data gathering tool, validation of the data gathering tool, data collection procedure and

the statistical treatment of the data.

Research Design

The research made use of descriptive method that is wholly quantitative design

to accomplish the desired outcome. The researcher made use of questionnaires and

follow up nterviews as a primary data gathering tool while publications, published books,

news, journals, research papers, articles and publications from the internet served as

secondary sources. Statistical analysis of data as well were employed to come up with

the findings of the study.

Locale and Population of the study

This study was conducted in Mountain Province State Polytechnic College –

Bontoc campus, the lone state-run higher learning institution in Mountain Province

located at the municipality of Bontoc Mountain Province near Sadanga Jeepney

Terminal.
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Figure 2.1. Location Map of Mountain Province State Polytechnic College

MPSPC – Bontoc Campus students enrolled in the 9 undergraduate programs,

Accountancy, Business Administration, Criminology, Office Administration, Hotel &

Restaurant Management and Tourism, Information Technology, Liberal Arts, Teacher

Education and Nursing, are the respondents of the study. This study only focused on

the student of Bontoc Campus - College of Art and Sciences because it has a higher

population with 9 different undergraduate programs and where the most financial

institutions are located.

 25

Table 2.1. Distribution of Respondents

Sample
Departments Total Population
(n)
Accountancy 118 15
Business Administration 200 26
Criminology 1,110 145
Office Administration 80 11
Hotel & Restaurant Management and Tourism 149 20
Information Technology 122 16
Liberal Arts 41 10
Teacher Education 732 96
Nursing 109 14
Total 2,661 358
Source: Registrar’s Office, MPSPC – Bontoc Campus
Note: Total Population is for the SY 2018-2019 1st Sem

Data Gathering Tool

The researchers used the Yamane’s formula to compute the sample size that will

represent the population per department. The margin of error, 5% which is within the

acceptable range of 5-10 was assumed by the researchers.

The formula is:

N
n=
1+ Ne2

Where: N=Population
n= Sample,
e= Margin of errors

Based on the formula, there are 348 respondents. This sample size was

allocated to the 9 different departments based on their current population.

The study made use of a questionnaire as primary data instrument. The set of

questions were structured based on the objectives of the study of which to arrive on

propose measures to further the level of patronization of the MPSPC-Students on the

services offered by financial institutions. The questionnaire was divided into two
 26

different parts answering the problems of the study. The first part was designed to

assess the level of knowledge of MPSPC-Bontoc students on services offered by

financial institutions. A knowledge test will be conducted for this part.

The second part aims to assess the frequency of patronization of MPSPC-Bontoc

students on services offered by financial institutions. A 5-pointer Likert’s Scale ranging

from 1 to 5 will likewise be used. The questionnaire considered the socio-demographic

profile of the MPSPC-students as to course and municipality of origin. Furthermore,

informal interview will be conducted to supplement the questionnaires.

Validation of Data Gathering Tool

The questionnaire was based on the study’s statement of the problem. The

questionnaire was drafted and was presented to the research’ instructor and advisers

as well as to all of the panel members for checking, editing, evaluation and other

suggestions for revisions and validations. The comments, suggestions and revisions

were consolidated by the researcher and the questionnaire then was finalized and

reproduced.

Data Collection Procedure

The researchers first requested for a copy of the total population of the Mountain

Province State Polytechnic College (MPSPC) students from the college registrar. After

collecting the data, they obtained a letter of authorization to float the questionnaires.

The researchers as well facilitated the students for clarifications on how to answer the
 27

tool. Furthermore, informal interviews were conducted with the students to further

understand and explain the result of the survey.

Statistical Treatment of Data

After data gathering, the data collected will be consolidated, tabulated and

analyzed using appropriate statistical tools.

Descriptive statistics like weighted mean, frequency counts and ranking will be

used to present the knowledge and patronization of the students on the products offered

by financial institutions and factors affecting it.

Friedman’s test (Two-way ANOVA) will be used to test the hypothesis on

significant differences on the perception of the respondents as to their course and

municipality. Further, a Knowledge Test and a five (5) point Likert’s scale will be used to

quantify the responses of the students which will be interpreted as follows:

Table 2.2: Descriptive interpretation for the level of knowledge

Numerical Descriptive
Rating Scale Descriptive Meaning
Rating (Score) Equivalent
5 17-20 Very much knowledgeable VMK
4 13-16 Much Knowledgeable MK
3 9-12 Moderately knowledgeable MoK
2 5-8 Slightly Knowledgeable SK
1 1-4 Not knowledgeable NK

Table 2.3: Descriptive interpretation for the frequency of patronization

Rating
Numerical Rating Descriptive Meaning Descriptive Equivalent
Scale
5 4.20-5.00 Very much Patronized VMP
4 3.40-4.19 Much Patronized MP
3 2.60-3.39 Moderately Patronized MoP
2 1.80-2.59 Slightly Patronized SP
1 1.00-1.79 Not Patronized NP
 28

CHAPTER 3

PRESENTATION, ANALYSIS AND INTERPRETATION

This section presents the results and discussions of the study particularly the

level of knowledge and level of patronization of the students of MPSPC on the services

offered by the financial institutions.

Level of Knowledge of the students of MPSPC-Bontoc Campus on the services

offered by the financial institutions

The following table shows the mean result of the survey conducted on the level

of knowledge of the students of MPSPC-Bontoc Campus on the services offered by the

financial institutions.

Table 1. Level of Knowledge of the Students of MPSPC on the Services Offered by the

Financial Institutions in Bontoc

Proportion
Scores f
(%)
17-20
18 5.10
(Very Much Knowledgeable)
13-16
218 61.76
(Much Knowledgeable)
9-12
110 31.16
(Moderately Knowledgeable)
5-8
6 1.70
(Slightly Knowledgeable)
1-4
1 .28
(Not Knowledgeable)
Total 353 100
MEAN = 13.17
Much Knowledgeable
 29

Result of survey showed that the students of MPSPC-Bontoc are much

knowledgeable with a mean of 13.17 on the services offered by financial institutions.

This shows that the students are familiar of the fund transfers and savings account

services offered by these institutions.

Presently, the business courses in Mountain Province State Polytechnic College

are integrating in their learning the basic how’s and whys of financial institutions

influencing the high knowledge of the students. As for the other non-business courses,

discussions on financial institutions are not thoroughly inculcated although being

included in their classroom discussions which open their mindset to the importance and

benefit of availing the services of financial institutions. This result agrees with the

findings of Llanto and Rosellon (2017) stating that education has a great effect in

instilling knowledge to the minds of the students in order for them to understand and be

aware of the value of financial institutions. Further, they added that “A higher level of

education increases the likelihood of transacting with a formal financial institution.”

In addition, during the informal interview conducted with the respondents, they

became aware of financial institutions like banks and cooperatives because of

experience. They gained their knowledge by actually availing of the services of financial

institutions. This can be related to the fact that Mountain Province State Polytechnic

College encourages their students especially those who are receiving financial support

from the government like grantees of Pantawid Pamilyang Pilipino Program (4Ps),

Commission on Higher Education (CHED)-Tulong Dunong and National Commission on

Indigenous People (NCIP) to open up their own savings account for a safer transfer of
 30

grants. Because of this, some students who are required to open a bank account,

during the process, acquires knowledge on the services offered by financial institutions.

Significant Difference on the Level of Knowledge of the Students of MPSPC on

the Services Offered by the Financial Institutions According to Course

Table 1.1 presents the difference on the mean level of the students as a result of

the conducted survey on the level of knowledge of the students of the MPSPC on the

services offered by the financial institutions according to course.

Table 1.1. Difference of Means on the Level of Knowledge of the Students of MPSPC

on the Services Offered by the Financial Institutions According to Course

Groups Mean DE
BSA 15.93 MK
BSBA 13.54 MK
BSCRIM 13.25 MK
BSHRMT 14.00 MK
BSIT 13.56 MK
BSN 12.71 MoK
BSOA 13.91 MK
LA 12.1 MoK
TED 12.38 Mok
Computed F-value = 5.30 (SIGNIFICANT)
Critical F-Value (df-8/339;0.05) = 1.97
P-value = 0.0000

Statistical analysis using Analysis of Variance (ANOVA) revealed significant

difference on the mean level of knowledge of MPSPC-Bontoc students on services

offered by financial institutions according to course as manifested by the computed F-

value of 5.30 which is greater than the critical F-value of 1.97 at 0.05 level of

significance. Furthermore, the p-value of 0.0000 is lower than the 0.05 level of
 31

significance. The result rejected the null hypothesis where there is no significant

difference on the mean level of knowledge of MPSPC-Bontoc students on services

offered by Financial Institutions according to course.

Although the table shows that almost all courses are generally much

knowledgeable, the courses related to business have a higher level of knowledge about

financial services offered by financial institutions like BS Accountancy, BS Hotel and

Restaurant Management and BS Business Administration. On the other hand, Liberal

Arts comes last being closely followed by the Teacher Education, both none business

courses.

One factor that has affected this significant difference is because of the

curriculum that is being implemented in every course. BS Accountancy had the highest

mean of 15.93, implying that they are much knowledgeable among all courses given

that they have a highly intensive financial education in their curriculum (CHED

Memorandum No. 03 Series of 2007).

For the Accounting course, an accounting degree provides the academic

grounding and knowledge of students on services offered by financial institutions. In

2005, Varcoe, Devitto and Go noted that using financially designed financial curriculum

improved the knowledge of the students towards financial institutions. The course

shapes the knowledge of the students on financial transactions. They are to learn,

understand, and appreciate these matters through continuous application of the

interrelated subjects of the course.

 32

One factor also to be considered is the subject area of the students under other

course like Liberal Arts, having the lowest level of knowledge on financial institutions,

does not focus on financial management. In their curriculum they only offer few subjects

like the Basic Economics and Law on Obligations and Contracts that will help add

knowledge about the importance of the services offered by financial institution

compared to other students under business courses (CHED Memorandum Order No. 31

Series of 2011). However, the focus of the discussion does not dwell much on finance.

This is supported by the World Bank Group (2015) stating that the level of awareness

and understanding on basic financial concepts is strongly associated with individual

characteristics such as completion and intensity of tertiary education, and the usage of

print, broadcast, and internet media on a regular basis.

From an informal interview conducted with the respondents, according to the

students under non-business courses, they stated that the knowledge they have on

financial institutions is mostly acquired from outside the school experiences like social

media, advertisements being implemented by financial institutions like posters, pop-up

notifications and exposure to fund transfer services in order for them to receive their

allowance.

Frequency Patronization of MPSPC-Bontoc Students on Services Offered by

Financial Institutions

Table two presents the result of the survey as to the level of patronization of

MPSPC-Bontoc students on services offered by Financial Institutions.

 33

Table 2. Level of Patronization of MPSPC-Bontoc Students on Services Offered by

Financial Institutions

Mean DE
1. I deposit to my savings account 2.31 SP

2. I withdraw from my savings account 2.40 SP

3. I receive money through my savings account 2.40 SP

4. I receive money through fund transfers using financial

2.30 SP
institutions

5. I send money through my savings account 1.95 SP

6. I send money through fund transfers using financial institutions. 2.09 SP

7. I pay for my bills through Financial Institutions (LBC, Western

1.87 SP
Union, Cebuana Lhuillier, Palawan Express and others.)

8. I buy things using money from my savings accounts. (Landbank

2.01 SP
and PNB)
GRAND MEAN 2.16 SP
Result showed that the students of MPSPC are slightly patronizing the services

offered by financial institution in Bontoc as shown by the grand mean of 2.16. This

means that the students are availing of the services of financial institutions at an

average of once a month.

Looking at the table, the statements I withdraw and receive from my savings

account garnered the highest mean frequency of patronization of 2.40. This denotes

that the students are not so keen on setting aside a portion of their allowance for their

savings using their bank accounts resulting to the financial institutions being slightly

patronized when it comes to the savings service. This supports the study conducted on

the savings practices of ESGP-PA Grantees conducted by Cubebe et al (2017) stating

 34

that the students do not generally make use of their bank accounts as a form of savings

facility. Instead, they make use of traditional modes of savings like piggy banks and the

likes.

Another factor why all the other statements in Table 2 got lower mean levels

compared to the statements I withdraw and receive from my savings account is

because of the students’ capacity. This is to consider that most students are financially

dependent on their parents and other relatives. So aside from their monthly allowance,

most of them have no other sources of funds. For that, being able to avail of the

services of financial institutions for more often than once a month is out of their financial

capacity. From an informal interview with the respondents, they stated that they do not

often avail of the financial services because they do not have that much amount of

money to receive and spend through financial institutions. In relation to this, research

says that people don’t tend to utilize and avail of a savings account or other services of

financial establishments for the simple fact that they don’t have money (Business

Inquirer, 2012)

Other factors that also affect the slight patronization of financial institutions

gathered during the interview are requirements and accessibility. The respondents state

that they do not avail of the services offered by financial institutions because of the

policies and guidelines that these institutions implement. According to them, availing of

fund transfers and applying for a savings account and ATM cards requires various

forms to submit and processes to follow. As to accessibility, as perceived by the

respondent, they cannot easily withdraw or deposit because they do not have these

banks in their hometowns, this in support with the struggle that the Banko Sentral ng
 35

Pilipinas is facing now. In an article published by BSP (2015), providing financial

services and ATM Machines to all the corners of the country still remains a challenge

although progress has been observed as compared to the past status.

Specifically, results shows that the items I withdraw from my savings account and

I received money through my savings account got the highest mean level of

patronization on the services offered by the financial institutions as shown by the means

of 2.40 and 2.40 respectively with the same descriptive equivalent of slightly patronized.

These findings show that savings account services are the most availed features by the

respondents particularly as a withdrawal facility or as a means to access cash sent to

them by their families or the granting institutions. This agrees with the undergraduate

research, “Satisfaction of Clients towards the Services offered by Financial Institutions

in Poblacion, Bontoc” by Diclas and Pagusan (2017). Accordingly, the service offered by

financial institutions that has the highest level of satisfaction is the savings services

because of its convenience especially with the presence of ATM machines that are

accessible anytime. Savings services also offer lower charges during fund transfer

transactions as compared to other services and it does not require much process during

every transaction in contrast with other institutions with no ATMs. However, there are

still problems encountered by the respondents when they avail of ATM services. This

includes long waiting lines and machines that are often offline. Consequently,

satisfaction of the students to the services offered by financial institutions, especially

savings services, has a great effect on the statement I receive money through my

savings account. These resulted to the receipt of money through the use of savings
 36

account having the highest mean level of patronization among all the other statements

concerning savings account and fund transfers.

On the other hand, the items I pay for my bills through Financial Institutions

(LBC, Western Union, Cebuana Lhuillier, Palawan Express and others) and I send

money through my savings account, with the same descriptive equivalent of slightly

patronized had the least means of 1.87 and 1.95 respectively. This denotes to the

financial capacity of the respondents considering that students only have a limited

amount of money to spend in these kinds of services offered by financial institutions.

Most students are financially supported by their family or by the government that is why

they are more on the receiving than on the sending. And according to the students they

do not pay bills that can be paid through financial institutions like mortgage, auto,

insurance, utility and government bills.

Significant Difference on the Frequency of Patronization of the Students of

MPSPC on the Services Offered by the Financial Institutions According to Course

The following table presents the difference of the frequency of patronization of

MPSPC-Bontoc students on the services offered by financial institutions according to

their course.
 37

Table 2.1. Difference of Means on the level of patronage of the MPSPC students on the

services offered by financial institution in Mountain Province according to course

BSA BSBA BSCRIM HRMT IT BSN BSOA LA TED

Mean DE Mean DE Mean DE Mean DE Mean DE Mean DE Mean DE Mean DE Mean DE
1. I deposit to
my savings 1.93 SP 2.31 SP 2.26 SP 2.30 SP 2.81 MoP 2.50 SP 2.91 MoP 2.20 SP 2.25 SP
account
2. I withdraw
from my
savings 2.20 SP 2.12 SP 2.34 SP 2.00 SP 2.69 MoP 2.07 SP 2.82 MoP 2.90 SP 2.51 SP
account
3. I receive
money
through my 2.20 SP 2.00 SP 2.24 SP 1.85 SP 2.25 SP 2.14 SP 2.36 SP 2.40 SP 3.15 MoP
savings
account
4. I receive
money
through fund
transfers 2.47 SP 2.62 MoP 2.22 SP 2.05 SP 2.25 SP 2.29 SP 3.00 MoP 2.10 SP 2.28 SP
using financial
institutions
5. I send
money
through my 2.07 SP 1.50 NP 1.97 SP 1.60 NP 2.50 SP 2.07 SP 1.80 NP 2.40 SP 1.94 SP
savings
account
6. I send
money
through fund
transfers 2.33 SP 1.88 SP 2.05 SP 1.85 SP 2.25 SP 2.43 SP 2.73 MoP 2.20 SP 2.04 SP
using financial
institutions.
7. I pay for my
bills through
Financial
Institutions
(LBC,
Western
Union, 2.07 SP 1.69 NP 1.79 NP 1.70 NP 2.31 SP 1.71 NP 1.73 NP 2.30 SP 1.92 SP
Cebuana
Lhuillier,
Palawan
Express and
others.)
8. I buy things
using money
from my
savings 1.80 NP 1.24 NP 2.14 SP 1.90 SP 1.81 SP 2.14 SP 2.82 MoP 2.50 SP 1.94 SP
account.
(Landbank
and PNB)
MEANS 2.13 SP 1.92 SP 2.13 SP 1.91 SP 2.36 SP 2.17 SP 2.52 SP 2.28 SP 2.25 SP
Computed X2 Value = 21.71 Decision: Reject Ho
Critical X2 Value (df-8,0.05) = 15.51 Finding: Significant
 38

Statistical Analysis using Friedman’s Test revealed significant difference of

means on the level of patronage of MPSPC students on the services offered by the

financial institutions according to course as shown by the computed value of 21.71

which is higher than the critical value of 15.51 at 0.05 level of significance. This means

that the different courses differ in their level of patronage on the services offered by

financial institutions in Bontoc, Mountain Province. However, all courses slightly

patronize financial institutions or they avail of its services once month. Furthermore,

basing on Table 2.1, students under the course Bachelor of Science in Office

Administration had the highest level of patronization having a mean level of 2.52. On the

other hand, the course Bachelor of Science in Hotel and Restaurant Management has

the lowest level of patronage with a mean of 1.91.This is due to the fact that the number

of times a student avails of the services of financial institutions is affected by factors

relating to the course the student is enrolled in.

Upon observation of Table 2.1, business courses have the lowest patronage on

the services offered by financial institutions. BS-Hotel and Restaurant Management with

a 1.91 mean closely followed by BS-Business Administration with a mean of 1.92 and

then BS-Accountancy with a mean of 2.13 got the three lowest spots in patronization.

Referring to Table 1.1, these three business courses generally have the highest level of

knowledge. During the interview, the students under these courses stated that their

knowledge had an effect on the number of times they avail of the services. Their

financial subjects have introduced to them the importance of cost analysis. Accordingly,

receiving and withdrawing their allowance all in one transaction will save more money

spent for transfer charges as compared to withdrawing and receiving the same amount
 39

of allowances bit by bit which will cause the sender to incur more transfer charges.

Some even do not avail of the services for the reason that it would cost them more as

compared to manually sending their allowance money. This result is supported by an

article titled Smart Cost Analysis of Business Students-2012 by J.E. Gilliam quoting,

“Financial education has a great effect on the life of students. Teach them how to save

costs and they will find ways to save costs on their daily transactions.” However, the

respondents under the business courses also state that although manual sending saves

them transfer costs, it also has its drawbacks. Accordingly, manual sending often results

to delays especially when the need for the money is urgent. In some cases, when there

are no available couriers, the students would have to wait or go to their hometowns

themselves for the money. They are also not able to receive money coming from their

relatives from far places like the cities or abroad so they result to making use of the

savings accounts of a trusted kin.

Relationship of Level of Knowledge and Level of Patronage of MPSPC-Bontoc

Students on the Services Offered by Financial Institutions

Statistical analysis using chi-squared test revealed no significant relationship

between the level of knowledge and level of patronage of MPSPC students on the

services offered by financial institutions in Bontoc, Mountain Province. This is

manifested by the survey resulting to a computed X2-Value of 22.60 which is lower than

the critical X2-Value of 26.296. This means that the level of patronage does not

depend on the level of knowledge of the students.

 40

Table 3 shows if there is a significant deference on the relationship of level of

knowledge and Level of Patronage of MPSPC students on the services offered by

financial institutions in Bontoc, Mountain Province.

Table 3. Chi-squared Test Analysis on the Relationship of Level of Knowledge and

Level of Patronage of MPSPC Students on the Services Offered by Financial

Institutions in Bontoc, Mountain Province

Level of Patronage
VMP MP MoP SP NP Total
Level of Knowledge fo fe fo Fe fo fe fo fe fo fe
17 – 20 1 0.82 1 1.22 4 3.57 3 4.23 9 7.90 18
(Very Much Knowledgeable)
13-16 12 9.88 18 14.82 48 43.23 54 51.26 86 95.72 218
(Much Knowledgeable)
8-12 3 4.99 5 7.48 17 21.81 26 25.86 59 48.30 110
(Moderately Knowledgeable)
5-8 0 0.27 0 0.41 1 1.19 2 1.41 3 2.63 6
(Fairly Knowledgeable)
1-4 0 0.05 0 0.07 0 0.20 0 0.24 1 0.44 1
(Not Knowledgeable)
16 24 70 85 158 353
Total
Compute X2-value = 22.60 (Not Significant)
Critical X2-value(df-16,0.05) = 26.296
Given the result that there is no significance in the effect of knowledge to the

patronization of the financial services offered by the financial institutions. Basing on

Table 1, the respondents have much knowledge on financial institutions and when it

comes to their patronization, most of them are availing of the services for only once a

month.

Looking at the result, students are much knowledgeable; however, they avail of

the services for once a month. This is because, based on the result of the survey on the

students’ patronazation (Table 2), the respondents use financial institutions mostly as a
 41

withdrawal facility or they avail of savings and fund transfers mainly to receive their

allowance. In other words, other services like depositing to their savings accounts and

purchasing commodities through financial institutions are not being utilized resulting to a

high knowledge but low patronage. The students are not taking full advantage of the

savings services to maintain contingency funds as a result of saving a portion of their

allowance through their savings account.

As for other students who are knowledgeable but do not avail of the services,

hence a low level of patronization, they stated that financial institutions are not a

necessity since their hometowns are just an hour’s ride away so their allowances could

easily be sent via a relative or the bus driver himself. However, accordingly, the real

problem occurs when there is an urgent need for money so they result to borrowing

from their friends or classmates. This shows that financial institutions is a must for

everyone since nobody can control his or her circumstances. In relation to that,

according to an article by World Bank (2015), society is moving to an era where

financial institutions are not just intermediaries but a necessity. This applies especially

to the savings account services since properly utilizing the savings service will result to

wise spending habits. Withdrawing allowances all in one go will entice the students to

spend more. However, if they will allocate a specific budget every week to be

withdrawn, this will encourage them to have money left for their savings. This is in

accordance to Hastings et al (2013) saying that allocating allowances for their timely

budget will make room for a student to save more.

Further, some of the respondents during the interview stated that they are well

versed about financial institutions and it would be very much convenient for them since
 42

they come from far places. However, the real problem is, they are not accessible since

some of them come from barangays with no cooperatives, ATM Machines or money

transfer establishments. If ever there are cooperatives present in their hometowns,

sending money would still be a problem because the institution does not offer money

transfer nor has ATMs. Supporting their statement is an article by Banko Sentral ng

Pilipinas (2015) stating that despite the efforts to increase branches and Automated

Teller Machines in the country, significant areas still have no access to them.
 43

CHAPTER FOUR

CONCLUSION AND RECOMMENDATION

Conclusion

1) The students of MPSPC-Bontoc are much knowledgeable on the services offered

by financial institutions. The level of knowledge of students according to their

courses varies with business related courses having a higher level of knowledge.

2) The students of MPSPC-Bontoc are slightly patronizing the services offered by

financial institutions which are generally once a month. Furthermore, the level of

patronization n of the students as to their courses has a significant difference.

3) The level of knowledge of the students does not significant effect on their level of

patronization. Factors such as accessibility, students’ financial capacity and

presence of banks and other financial institutions in other rural areas affects this

level of patronization.

Recommendation

1) It is recommended that the Department of Accountancy in cooperation with the

different financial institutions conduct seminars and workshops to students under

non-business courses to improve their knowledge on the services offered by

financial institutions.

2) It is recommended that the MPSPC-Bontoc students open a savings account for

efficiency and security of fund transfer.

 44

3) It is recommended that a feasibility study be conducted regarding the viability of

offering fund transfers by cooperatives in partnership with money transfer

intermediaries like Cebuana Lhuiller, Western Union, Palawan Express and

others.