Sample Thesis

EFFECTS OF TRAIN LAW ON THE FINANCIAL STABILITY
OF HOUSEHOLDS IN SELECTED CITIES IN CAVITE
Undergraduate Thesis
Submitted to the Faculty of the
College of Economics, Management, and Development Studies
Cavite State University
Indang, Cavite
In partial fulfilment
of the requirements for the degree
Bachelor of Science in Business Management
Major in Financial Management
KIM GILMORE R. AURE

DONNA MAE S. CALO
MA. BIANCA L. ROSALES
June 2019
i
Republic of the Philippines
CAVITE STATE UNIVERSITY
Don Severino de las Alas Campus
Indang, Cavite
Tel. (046) 415 0013 Telefax (046) 415 0012
E-mail: cvsu.op206@gmail.com
COLLEGE OF ECONOMICS, MANAGEMENT AND DEVELOPMENT STUDIES
Department of Management
Authors: KIM GILMORE R. AURE

DONNA MAE S. CALO
Title: EFFECTS OF TRAIN LAW ON THE FINANCIAL STABILITY OF

HOUSEHOLDS IN SELECTED CITIES IN CAVITE
A P P R O V E D:
ii
BIOGRAPHICAL DATA
Kim Gilmore R. Aure was born on July 08, 1998 in Estrella Hospital, Silang,
Cavite. He is the second child of Arnold and Aunora Aure. He has two siblings, namely:
Nixon Adrian and Julius Limuel. He is currently residing in Mendez, Cavite.
He completed his elementary education at Gahitan Elementary School in 2011
and graduated as first honorable mention. In the same year, he enrolled at Tagaytay-
Mendez Academy and completed his secondary education as salutatorian in 2015.
He enrolled in Cavite State University in Indang, Cavite where he took Bachelor
of Science in Accountancy until the second semester of 2015. In 2016, he decided to
pursue Bachelor of Science in Business Management major in Financial Management.
He obtained his degree in June 2019.
iii
BIOGRAPHICAL DATA
Donna Mae S. Calo was born on October 24, 1998 in South Cotabato,
Mindanao. She is the eldest among the four children of Mary Ann and Edgar Calo. She
is currently residing in Biclatan, General Trias City, Cavite.
She obtained her elementary education at Gawaran Elementary School and
awarded third most outstanding student in 2011. Her secondary education was
obtained at Governor Ferrer Memorial National High School and graduated as seventh
honorable mention in 2015.
In 2015, she enrolled at Cavite State University in Indang, Cavite and took
Bachelor of Science in Accountancy until the second semester of 2015. In 2016, she
decided to pursue Bachelor of Science in Business Management major in Financial
Management.
She obtained her degree in June 2019.
iv
BIOGRAPHICAL DATA
Ma. Bianca L. Rosales was born on February 25, 1997 in Munting Ilog, Silang,
Cavite. She is the youngest among the four children of Emiliano and Rhodora Rosales.
She is currently residing in Munting Ilog, Silang, Cavite.
She finished her elementary education at Munting Ilog Elementary School as
and graduated as first honorable mention in 2010. She pursued her secondary
education at Munting Ilog National Highschool and graduated with honors in 2013.
In 2015, she pursued college education at Cavite State University in Indang,
Cavite and took Bachelor of Science in Accountancy until the second semester of
2015. In 2016, she decided to pursue Bachelor of Science in Business Management
major in Financial Management and obtained her degree in June 2019.
v
GENERAL ACKNOWLEDGMENT
The authors would like to express their deepest gratitude and appreciation to
several individuals who contributed and extended their valuable assistance, time,
effort, moral support, and encouragement from the beginning until the end of the study:
Ms. Mary Grace A. Ilagan, thesis adviser, for her meaningful advice, time,
everlasting support, unconditional kindness and understanding that she provided
throughout the completion of the study;
Ms. Ma. Grasya M. Tibayan, technical critic, for her assistance, endless support
and perceptive review of all technical aspects of this study and for being detailed, and
constructive;
Ms. Princess M. Feliciano, thesis coordinator, for her valuable comments and
suggestions, guidance, and support;
Ms. Tita C. Lopez, chairperson of the Department of Management, for her great
suggestions and comments, and approval;
Ms. Mailah M. Ulep, college research coordinator, for her assistance and
approval of the study;
Dr. Marlon A. Mojica, dean, College of Economics, Management, and
Development Studies, for the comments and suggestions and the permission to
conduct the study;
Mr. Gener T. Cueno, former chairperson of the Department of Management,
for his worthy comments and suggestions, moral support, and approval of the study;
Dr. Marietta C. Mojica, former college research coordinator, for her assistance
and useful comments and suggestions that is beneficial in the study;
Dr. Florindo C. Ilagan, former dean, for his inspirational words that motivate the
researchers;
All faculty members of the College of Economics, Management, and
Development Studies, for sharing their experiences throughout their college years;
vi
All barangay captains of Bacoor, Dasmarińas, Imus, and General Trias for the
help and for being compassionate;
The participants, for the cooperation and time they spent in providing the
information to complete the study;
Special gratitude to their loving families, siblings, and their relatives for the
unconditional love that served as an inspiration to succeed and for all financial support,
endless prayers, and encouragement in all their struggles;
Above all, the Almighty God, for giving them the strength, divine love, wisdom,
for the endless guidance in helping to surpass all the trials and all the blessings He
bestowed in the pursuit of the study. Indeed, the authors are nothing without Him.
To all of them, this piece of work is wholeheartedly dedicated.
THE AUTHORS
vii
PERSONAL ACKNOWLEDGMENT
The author would like to thank the following people who gave their full support
and invaluable contribution in the success of this study:
His thesis partners, Donna Mae and Ma. Bianca, for giving their time, effort,
support, and patience to accomplish the study, and as well as for the happy moments
together;
His A’port, Airra, Amiel, Donna, Riza, Marjorie, Jobelle, Amaville, Chairelle,
Bianca, madam Cha and their college friends, for their support through good and bad
times, giving motivational talks to be strong and positive enough to overcome all the
challenges in life, and making this whole college life fun and memorable;
His parents, Arnold and Aunora, siblings, Nixon Adrian and Julius Limuel, and
his relatives, for their unconditional love and words of encouragement to pursue his
dreams, understanding, endless support financially, morally and emotionally, patience,
and for being the inspiration from the beginning until the end of this study;
Above all, the Almighty God, for His wisdom, divine love, and endless guidance
throughout the data gathering and completion of the study. All of these will not be
possible if not because of Him.
To all of them, this piece of work is humbly dedicated.
KIM GILMORE R. AURE
viii
The researcher would like to extend her deepest and sincerest gratitude to all
the people who helped her in any manner, who have shared their time and effort for
the accomplishment of this study:
First, to Jesus Christ, the Almighty, who gives the unconditional love and
strengthen the author every step so that she could finish the study;
Her parents, Edgar and Mary Ann, and her siblings, for their unconditional love
and support to pursue her dreams;
Her second parents, Elizabeth, Arsenia, Vilma, and Manuel, for their undying
love, words of encouragement, immeasurable patience and unending support
financially and emotionally, and for being an inspiration from the beginning until the
end of this study;
Her thesis partners, Kim Gilmore and Ma. Bianca, for the immeasurable
patience, word of encouragement, and for all the unforgettable moments they had
shared;
A’ports Airra, Amiel, Riza, Marjorie, Jobelle, Amaville, Chairelle, madam Cha,
and all her college friends, for their love, pieces of advice, for listening to all her
nonsense dramas, and for a memorable college journey;
Lastly, her grandparents, Arsenia and Herminio Sr., for the endless love and
support, for empowering her, for being the source of her strength and inspiration since
her journey begin.
DONNA MAE S. CALO
ix
The author would like to thank the following people who gave their full support
and invaluable contribution in the success of this study:
Her thesis partners, Donna Mae and Kim Gilmore, for their time, effort, support,
and patience as well as for the happy moments together;
Her A’port, Airra, Amaville, Amiel, Chairelle, Charlen, Jobelle, Marjorie, and
Riza; her classmates as well as all of her friends, for their love and support throughout
her journey and for a memorable college experience;
Her parents, Emiliano and Rhodora Rosales, for being an inspiration to pursue
her studies despite the fact that they are long gone;
Her siblings, Rhomilyn, Ramil, and Rommel Rosales and her whole family, for
their unconditional love, words of encouragement, understanding, patience and
unending financial and moral support, and for being an inspiration from the beginning
until the end of this study;
Above all, the Almighty God, for His wisdom, divine love, and endless guidance
throughout the data gathering and completion of the study. All of these will not be
possible if not because of Him.
x
ABSTRACT
AURE, KIM GILMORE R., CALO, DONNA MAE S., ROSALES, MA. BIANCA L.
Effects of Train Law on the Financial Stability of Households in Selected Cities
in Cavite. Undergraduate Thesis. Bachelor of Science in Business Management major
in Financial Management, Cavite State University, Indang, Cavite. June 2019. Adviser:
Ms. Mary Grace A. Ilagan.
Filipino households prioritize their expenditures instead of valuing their financial
stability in terms of savings, emergency fund, investment, and retirement fund to
prepare for the future and unforeseen events.
The study aimed to compare the household expenditures and financial stability
before and after the implementation of TRAIN law. Moreover, the study sought to
assess the effects of TRAIN Law on the financial stability of households.
It was carried out among the households in selected cities in Cavite.
Specifically, this was conducted in the cities of Bacoor, Dasmarińas, Imus, and General
Trias from August 2018 to May 2019. A multistage sampling technique was employed
to select the participants.
Moreover, using t-Test, it was found that the amount for expenditures and
financial stability were significantly different upon the implementation of TRAIN Law.
In addition, simple linear regression with Durbin-Watson diagnostic test revealed that
TRAIN Law had a positive effect on the financial stability except for retirement fund
and the model fits.
It was concluded that there are other possible factors that may affect the
change in financial stability of households aside from the implementation of TRAIN
Law. Thus, it is recommended that the future researchers conduct a similar study since
it is a longitudinal study but widen the scope through considering salaried employees
to assess more the effects of TRAIN Law.
xi
TABLE OF CONTENTS
Page
BIOGRAPHICAL DATA………………………………………………………….. iii
ACKNOWLEDGMENT…………………………………………………………… vi
ABSTRACT……………………………………………………………………….. xiii
LIST OF TABLES ………………………………………………………………… xiv
LIST OF APPENDICES …………………………………………………………. xv
INTRODUCTION …………………………………………………………………. 1
Statement of the Problem ………………………………………………. 3
Objectives of the Study ………………………………………………….. 4
Hypotheses ……………………………………………………………….. 5
Significance of the Study ………………………………………………... 6
Time and Place of the Study ……………………………………………. 6
Scope and Limitation of the Study ……………………………………... 6
Definition of Terms ………………………………………………………. 7
Conceptual Framework ………………………………………………….. 8
REVIEW OF RELATED LITERATURE ………………………………..………. 11
METHODOLOGY ………………………………………………………………… 23
Research Design ………………………………………………………… 23
Sources of Data ………………………………………………………..… 23
Participants of the Study ………………………………………………… 24
Sampling Technique ……………………………………………….……. 24
Data Gathered ……………………………………………………………. 25
Statistical Treatment of Data …………………………………………… 26
RESULTS AND DISCUSSION………………………………………………….. 29
Sociodemographic Characteristics
of Households in Cavite ………………………………………… 29
xii
Socioeconomic Characteristics
Household Expenditures in Cavite …………………………………….. 33
Financial Stability of Households in Cavite …………………………… 46
Effects of TRAIN law on the Financial Stability

SUMMARY, CONCLUSION, AND RECOMMENDATION …….…………….. 57
Summary …………………………………………………………….……. 57
Conclusion ………………………………………………………………... 59
Recommendation ………………………………………………………… 60
REFERENCES ……………………………………………………………………. 62
APPENDICES …………………………………………………………………….. 67
xiii
LIST OF TABLES
Table Page
1 Distribution of participants of household in selected cities in

Cavite …………………………………………………………….. 25
2 Sociodemographic characteristics of the head of
households……. 30
3 Socioeconomic characteristics of the households…………………. 32
4 Amount of household expenditures before and

after the implementation of TRAIN Law……………………….. 35
5 Amount of financial stability of households before and

after the implementation of TRAIN Law……………………….. 48
6 Effects of TRAIN Law on savings……………………………………. 54
7 Effects of TRAIN Law on emergency fund …………………………. 54
8 Effects of TRAIN Law on investment………………………………... 55
9 Effects of TRAIN Law on retirement fund…………………………… 56
xiv
LIST OF APPENDICES
Appendix Page
1 Permit Letters ………………………………………………………... 68
2 Research Instrument ……………………………………………...... 88
3 Request for Adviser and Technical Critic ………………………… 92
4 Title Approval Sheet ………………………………………………… 94
5 Proposal Approval Sheet …………………………………………… 96
6 Request for Proposal Oral Review ………………………………... 98
7 Request for Manuscript Oral Review ……………………………… 100
8 Routing Slip ………………………………………………………...... 102
9 Certificate from Statistician ………………………………………… 104
10 Certificate from the Ethics Review Board …….…………………... 106
11 Household’s population in the cities of Cavite …………………… 108
12 Statistician data of results ………………………………………….. 110
13 Curriculum Vitae …………………………………………………….. 120
xv
1
EFFECTS OF TRAIN LAW ON THE FINANCIAL STABILITY

Kim Gilmore R. Aure

Donna Mae S. Calo
Ma. Bianca L. Rosales
An undergraduate thesis manuscript submitted to the faculty of the Department of

Management, College of Economics, Management and Development Studies, Cavite
State University, Indang, Cavite in partial fulfillment of the requirements for the
degree of Bachelor of Science in Business Management major in Financial
Management with Contribution No.________________. Prepared under the
supervision of Ms. Mary Grace A. Ilagan.
INTRODUCTION
Philippines remains as one of the fastest growing economy in the Association
of Southeast Asian Nations (ASEAN) today that it gives a lot of opportunities and
money as well (World Bank, 2018). However, most of the Filipinos are struggling in
allocating their finances that results to lack of financial stability. Filipinos are not
confident that their income can cover their daily expenses and be able to save for future
emergencies.
The tax reform in the Philippines for over 20 years was really a burden to
everyone especially to compensation earners. As the new year starts, the Tax Reform
for Acceleration and Inclusion (TRAIN) law also took effect. According to the
Department of Finance (DOF), TRAIN law is implemented to create a simpler, effective
and convenient system of tax collection, as per the constitution, where the rich will
have a bigger contribution and the poor will benefit from the government’s programs
and services. The highlight of the new implemented law is exempting compensation
earners whose annual salary is less than P250,000 or those who earn monthly of
2
P21,000 and below from personal income tax, expanding value-added tax and an
increase on excise tax especially petroleum, tobacco, and sweetened beverages.
Almost 83 percent of the working-class Filipinos belongs to the compensation
earners bracket of P0 to P250,000 yearly, meaning majority of the taxpayers will be
exempted from paying their taxes. Filipinos, especially consumers are against to the
new tax reform because of an increase on excise tax but the government did that to
accumulate funds for the “Build, Build, Build” projects which are mostly for education,
health care services, and infrastructure programs and also to prevent diseases
acquired from sweetened beverages, cigarettes and many more.
Only 18 percent of Filipinos are financially stable or “thriving financially”, while
the 82 percent of the population saw themselves suffering and struggling financially.
Gallup-Healthways State of Global Well-Being Index (2014) stated that the financial
stability perception of Filipinos is notably below the Asian and global averages of 25
percent. The Filipinos had a weak response on financial questions on “do you have
enough money to do everything you like to do?” and “do you worry so much about your
money?”. The global study also showed that 41 percent of Filipinos aged 45 and above
are said to be suffering money – wise more compared to 25 percent of Filipinos aged
44 and below.
Cavite has been the most populous province in the Philippines for the last
seven years (Philippine Statistics Authority [PSA], 2017). It was also declared as the
province with the biggest number of industrial firms and the biggest labor force
(Department of Labor Employment [DOLE], 2017). This shows that the province has a
huge volume of compensation earners struggling in allocating funds and are highly
affected of the new tax reform.
Filipinos felt the sudden changes on the first quarter of 2018 brought by TRAIN
law especially on the increase of their expenses due to price swelling on oil products,
fruits, vegetables, grocery items, sugar, sweetened beverages, electric charges, and
other goods and services. Price swelling entails a record of highest inflation rates in
3
more than three years: 3.4 percent inflation in January, 3.8 percent in February, and
4.3 percent in March.
Therefore, the purpose of the study is to assess the effect of Tax Reform for
Acceleration and Inclusion Law on the financial stability of households in selected cities
in Cavite and to determine the factors that greatly affect financial stability.
Statement of the Problem
The study investigated the effect of Tax Reform for Acceleration and Inclusion
law on the financial stability of households in selected cities in Cavite.
Specifically, it sought to answer the following questions:
1. What is the sociodemographic characteristics of the head of households in
selected cities in Cavite in terms of:
a. age,
b. sex,
c. civil status,
d. educational attainment, and
e. employment status?
2. What is the socioeconomic characteristics of the households in selected cities
in Cavite in terms of:
a. household size,
b. number of dependents, and
c. household income?
3. What is the household expenditures before and after the implementation of
TRAIN law on:
a. food,
b. rentals,
c. transportations and communications,
d. utilities,
4
e. education,
f. medical care,
g. payments of loans,
h. taxes, and
i. recreation and leisure?
4. What is the financial stability of households before and after the implementation
of TRAIN law in terms of:
a. savings,
b. investment,
c. emergency fund, and
d. retirement fund?
5. What is the effect of TRAIN law on financial stability of households?
Objectives of the Study
The study aimed to determine the effect of Tax Reform for Acceleration and
Inclusion (TRAIN) law on the financial stability of household in selected cities in Cavite.
Specifically, it aimed to:
1. describe the sociodemographic characteristics of the head of households in
selected cities in Cavite in terms of:
a. age,
b. sex,
c. civil status,
d. educational attainment, and
e. employment status;
2. describe the socioeconomic characteristics of the households in selected
cities in Cavite in terms of:
a. household size,
b. number of dependents, and

5
c. household income;
3. compare the household expenditures before and after the implementation of
TRAIN law on:
a. food,
b. rentals,
c. transportations and communication,
d. utilities,
e. education,
f. medical care,
g. payments of loans,
h. taxes, and
i. recreation and leisure;
4. compare the financial stability of households before and after the
implementation of TRAIN law in terms of:
a. savings,
b. investment,
c. emergency fund, and
d. retirement fund;
5. ascertain the effect of TRAIN law on financial stability of households.
Hypotheses
Below are null statements that served as the initial statements that proved or
rejected the results of the study:
𝐇𝐨𝟏 : Household expenditures do not differ before and after the implementation
of TRAIN law.
𝐇𝐨𝟐 : Financial stability does not differ before and after the implementation of
TRAIN law.
𝐇𝐨𝟑 : TRAIN law has no effect on financial stability of households.

6
Significance of the Study
The study hopes to provide useful information that can help a lot of parties
regarding financial stability towards Tax Reform for Acceleration and Inclusion (TRAIN)
law. The study will be beneficial to the following:
The study will help the Philippine government to assess if the new Tax Reform
is effective and beneficial to every Filipino household and also to assess if there are
actions that they can provide for poverty alleviation or to lift people from lowest of low.
The study will help the companies in Cavite to become aware of the effect of
the new Tax Reform program towards the financial stability of their employees as well
as to assess the performance of their employees after receiving higher take home pay.
The study will also provide the households the information regarding the
manner of spending and allocating future finances which could result to a positive
financial position and secured finances.
The study will also be beneficial to future researchers who would want to
conduct similar studies.
The study is an assessment of the financial stability of households towards
sudden changes in the tax reform. This includes on how households react financially,
physically, and psychologically after being influenced by Tax Reform for Acceleration.
Time and Place of the Study
The study on the effect of Tax Reform for Acceleration and Inclusion (TRAIN)
law on the Financial Stability of households in selected cities in Cavite was conducted
from August 2018 to May 2019. The data were gathered from the top four most
populous cities in Cavite which are Bacoor, Dasmariñas, Imus, and General Trias.
Scope and Limitations of the Study
The study aimed to evaluate the effect of Tax Reform for Acceleration and
Inclusion (TRAIN) law on the financial stability of households in selected cities in
Cavite.
7
This study focused on the responses of the heads of the households whose
ages ranged from 18 and above, who are considered capable of acquiring income,
incurring expenses, planning for future and securing their finances. These heads of
households were from the top four most populous cities in Cavite: Bacoor, Dasmariñas,
Imus, and General Trias. The financial stability of the head of the households was
measured through the increase and the decrease of their savings, investment,
emergency fund, and retirement fund. This was solely based on the participants’
knowledge of their spending and saving patterns. The study likewise considered the
changes in taxes when TRAIN law was implemented. The period of analysis was one
year upon the implementation of TRAIN law.
Definition of Terms
This section defines the following terms in order to provide a common frame of
references to the readers:
Compensation earner refers to employed households who receives an annual
income of P250,000 and below or a monthly income of P21,000 and below.
Emergency fund refers to an account for funds of households in case of
personal unexpected events like loss of job, illness, and other unforeseen events.
Financial stability refers to having enough income to cover the daily expenses
of households. It also deals with savings, investment, emergency fund, and retirement
fund.
Head of household refers to the member of the household who controls the
finances and who has enough knowledge in saving and spending matter.
Household consists of one or more people whose living together, acquiring
income and sharing expenses.
Investment refers to the asset of households purchased in either form of
stocks, bonds or from other financial instruments with a belief that it will return a greater
value in the future.

8
Retirement fund refers to a special fund which households pay in advance so
that when they retire they will receive money regularly as a pension.
Savings refers to the keeping of money by households either keeping it on
banks or in a piggy bank.
Stability of income refers to the steadiness of income of households either
from being employed or self-employed.
Tax refers to the mandatory financial charge to the head of households to fund
public expenditures.
TRAIN law refers to the new tax reform which stands for Tax Reform for
Acceleration and Inclusion that aims to make the tax system simpler, fairer, and more
efficient.
Conceptual Framework
This part illustrates the conceptual model used to ascertain how the Tax
Reform for Acceleration and Inclusion (TRAIN) law affects the financial stability.
For the past years, most of the households were financially affected by the
different changes in the country. There was unexpected price hike in some services
and products, lower take home pay, higher tax payment, and other factors that results
to unsatisfying their daily expenses. In this regard, the government led by President
Rodrigo Duterte implemented the first package of Comprehensive Tax Reform
Program (CTRP) which was the Tax Reform for Acceleration and Inclusion (TRAIN)
law. The highlight of this was to lessen the burden of households by lowering the
Personal Income Tax Rate that results to a higher take home pay. It could also result
to an opportunity to save more by investing in different investment instruments and
securing future finances.
In this study, the independent variable is the Tax Reform for Acceleration and
Inclusion (TRAIN) law which deals with taxes including lower personal income tax,
expanded value-added tax, real property tax, and excise tax on goods and services.
9
The dependent variable is the financial stability which focuses on the savings,
investments, emergency funds, and retirement fund of households in selected cities in
Cavite.
In addition, the figure shows that the components of the Tax Reform for
Acceleration and Inclusion (TRAIN) law affects the financial stability of households in
terms of savings, investments, emergency fund, and retirement fund.

10
Independent Variable Dependent Variable
Financial Stability
Tax Reform for  Savings
Acceleration and Inclusion  Investments
(TRAIN) law  Emergency
 Taxes Fund
 Retirement
Fund
Figure 1. Conceptual framework of the study

11
REVIEW OF RELATED LITERATURE
This section presents the literatures reviewed that are found to be relevant in
the study. This consists of information about Tax Reform for Acceleration and Inclusion
(TRAIN) law and its highlights, financial stability and its indicators, and characteristics
of households in selected cities in Cavite.
Tax Reform for Acceleration and Inclusion

(TRAIN) law
The newly implemented tax reform was signed by President Rodrigo Roa
Duterte last December 19, 2017 which is the Tax Reform for Acceleration and Inclusion
(TRAIN) law that will overtake the 20-year old tax system in the Philippines (Adrian,
2017). As mentioned by the Department of Finance ([DOF, 2018]), the new tax reform
has two packages: (a) Tax Reform for Acceleration and Inclusion that takes place last
January 1, 2018, and to be followed by (b) second tax reform at the middle part of
2018. The main purpose of TRAIN law is to correct deficiencies in the tax system for
the last 20 years to make it simpler, fairer, and more efficient for every Filipino which
is the main concern of President Duterte’s administration. Presidential Spokesperson
Harry Roque, Jr. assured every Filipinos that the new tax reform will be a big help for
it will reduce the sufferings of every hardworking individuals from low income earner to
middle income earner. Also, the new tax reform is through the initiative to alleviate
poverty through the “Dutertenomics” program which is indeed a government of “tapang
at malasakit”.
The Tax Reform for Acceleration and Inclusion (TRAIN) law will provide a big
relief to almost 99 percent of tax payers in the Philippines as it lowers and exempts
monthly income taxes (Adrian, 2017). The new tax reform is gradually decreasing as
time goes by and expected to lower it more on 2020 and onwards. However, as the
obligation of paying income taxes were lowering, the prices of products that are needed
for everyday survival would increase a lot. Contreras (2018) mentioned the new tax
12
reform theory that the increase on take home pay can spur consumption is believed to
not contribute in the growth of the economy especially in targeting poverty alleviation
but is expected to generate more revenues from excise taxes as the consumption of
goods and services increases.
At the year of 2020, it was expected that the rate of poverty will reduce from
26 percent to 17 percent which is about 10 million of Filipinos got elevated from poverty
and finally achieving the middle-income status. Then in 2040, extreme poverty will
finally get eradicated, opportunities through inclusive economic and political institutions
will be provided equally and high income status will be finally achieved by many
Filipinos. The correction on the tax system plays an important role in the society where
those people who earn a lot will have a bigger contribution and the poor people will
benefit from it. By the means of the new tax reform, every Filipino will contribute in
funding the government’s “Build, Build, Build” project and also can help to alleviate
poverty.
Lower and simplify personal income tax. Compensation earners, self-
employed, and professional taxpayers (SEP) who earn P21,000.00 and below monthly
or annual taxable income of P250,000.00 and below, whether what marital status they
have or how many dependents they acquire, they are exempted from paying personal
income tax (PIT). Moreover, amounting to P90,000.00 and below of yearly 13th month
pay and other bonuses given by their employer was also exempted from taxes.
Expanded Value-Added Tax (VAT) Base. A condition where business who
earns P3,000,000.00 total annual sales and below are likewise VAT-exempt. A new
VAT system with a low rate and exemptions that are limited to raw food, health, and
education related. One of the beneficiaries of VAT exemption is the senior citizens and
persons with disabilities (PWD) advantage once they purchase goods and services.
The following are also exempted from VAT starting January 1, 2019: payment dues in
association, membership fees, charges collected by homeowners associations, and
condominium corporations, selling of gold to the BSP and the most that would be a big
13
ease to the burden of Filipinos is in the sales of drugs and medicines prescribed
towards diabetic people, for high cholesterol and hypertension.
Increase on excise tax of petroleum. Environmental and health complaints
would now be addressed appropriately through an increase on taxes of dirty fuels.
Diesel, regular and unleaded premium gasoline would be affected too much as the
excise tax would increase for three years. There would be an increase on diesel by
P2.50 in 2018, P4.50 in 2019, and P6.00 in 2020, while on regular and unleaded
premium gasoline in 2018 there will be an increase of P7.00, in 2019 an increase of
P9.00 and a P10.00 increase in 2020. However, LPG in the same years as mentioned
earlier would have a minimal increase of P1.00, P2.00, and P3.00 per kilogram (kg)
respectively.
Increase on excise tax of tobacco products. Tobacco products will also have
an increase on excise tax. From January 1 to June 30 in the year of 2018, there would
be a P32.50 increase. By July 1, 2018 to December 31, 2019, there would be a P35.00
increase. Then by 2020-2021, the increase of tax would be P37.50. Then in 2022-
2023, there would be an increase of P40.00, and in 2024 onwards there would be an
annual increase of four percent tax rate.
Increase on excise tax of sugar-sweetened beverages. It is one way of the
Philippine government in promoting a healthier lifestyle of every Filipino. In every liter
of drinks that uses sugar and artificial sweeteners would acquire a P6.00 additional.
While P12.00 in every liter of drinks that uses high fructose corn syrup. While other
beverages such as milks, 3-in-1 coffees, vegetable juices, and medically indicated
beverages will be tax-free.
Benefits of Tax Reform for Acceleration and Inclusion

(TRAIN) law
For the next five years, as mentioned by the Department of Finance (DOF)
there would be expected benefits from the newly implemented law for education,
healthcare services and infrastructures programs. As for education, the new tax reform
14
can finally fund 629,120 public school classrooms, or 2,685,101 public school
teachers. In healthcare services, new tax reform can also finally fund 60,483 rural
health units, or equivalent to 484,326 barangay health stations, or 1,324 provincial
hospitals. Additional allocation for infrastructure programs for major highways,
expressways, and flood control project which were the projects of the Department of
Public Works and Highways will also be observed. It is also expected that the tax
reform can finally fund 35,745 km of paved roads, or 786,400 km of temporary bridge
upgrades, or 2.6 million hectares of irrigated land.
According to President Rodrigo Roa Duterte, “Revenues from the TRAIN will
fund our priority projects to ensure a quality education, including free tuition in state
universities and colleges, equally, quality health care, social protection, and conditional
cash transfers, improved infrastructures to the Build, Build, Build program and the
reconstruction of Marawi. This is just an initial part of our gains under the
comprehensive tax reform programs as Congress has passed two-thirds of the
expected revenues from the Package 1 of TRAIN”.
Financial Stability
According to Ahmad, Sabri, Rahim, and Osman (2017), financial stability refers
to the level of savings, the ability to accumulate emergency fund, the stability of income
and the capability to acquire budget for retirement. Financial strains, self-coping
mechanisms, financial literacy, and financial practices are factors that influence the
attainment of financial stability. An example of a way to achieve financial stability is to
focus on important things like reducing expenses and increasing income.
Savings and investment. Savings and investments are the pillars of financial
stability. Savings is a must to ensure that unexpected needs are being covered in order
to achieve financial stability. Another way of attaining secured finances is through
investments. It is used for accomplishing future plans or goals (Gupta & Kashyap,
2018).
15
Savings. Savings is one of the bases of economic growth. It is the state of
sacrificing current consumption for future expenses. Family savings contributes in
ensuring financial stability and is important to cover educational plan, marriage of
children, property, loss of income, illness, death, and other unforeseen events in the
future. In short, savings is necessary for meeting emergencies in the future. According
to Rappaport (2012), saving behavior of single individuals differ from married ones.
The ability to accumulate asset, prepare for retirement, paying of taxes, and availment
of insurances tend to be different also between the two. Married couples are both
responsible for anything related to the finances that they are both acquiring such as
debt, savings, and expenses.
Savers vs. non-savers. Non-savers tend to be more likely to experience
hardships than those who save for an emergency (Gjertson, 2014). Several hardships
that non-savers might encounter are skipping a housing or utility bill, having phone
service disconnected, and food insecurity. The hardships occur when there is a
negative effect on emergency saving status of a household. Savers tend to be more
prepared in coping up with economic shocks by quickly accessing the reserved funds
for emergencies. Hardships for example, having not enough food, means negative
impact to the household’s well-being. Basically, savers and non-savers are different in
coping up with unexpected events.
Household saving motives. Culture and economic environment influences
household saving motives that is why it varies from country to country. For some
country, the two most frequently reported motives for saving are for retirement and for
precautionary. Saving for purchasing a house or car, paying off debts, holidays and
rainy days, and purchasing durable goods are also saving motives from different
countries. Generally, saving for education is the most important motives of saving for
most of the country (Yao, Wang, Weagley, & Liao, 2011). There are several factors
that affect household’s saving motives. First is the income, Yao et al. (2011) mentioned
that savings of workers from rural and urban areas are different. Urban workers with
16
higher salaries tend to save more compared to rural area workers. Age also affects the
saving motives of a household. Households with a younger head were more likely to
purchase more compared to households headed by older ones. Another factor
affecting saving motives is gender. Households headed by female are more likely to
save for daily expenses while male-headed households save for retirement, children,
and growth. Life cycle, education, and home ownership were also found to affect
household saving motives.
Investments. It is the sacrificing of certain present value for the uncertain
reward in the future. It is a process of using resources to gain income in the future and
the expectation of higher return over a certain period of time. Simply, the investments
are anything not consumed today for the purpose of gaining something from it in the
future/all investments have risks, there is no assurance that an investment will gain the
expected return (Gupta & Kashyap, 2018). Expecting returns from investments in the
future means being ready for what might happen in the future. Most people invest for
their children’s education, marriage, and security and safety after retirement. Coping
up with financial situations and reducing future risks can be achieved through
investments. Aside from the purposes above, some people only invest only to use the
proceeds to future social causes. All investments are exposed to one or another type
of risk. Investment decision is knowing when, where, how, and how much to invest in
the pursuit of gaining high return in the future. There are three risk factors that must be
considered before investing: safety, liquidity, and probability. Income of the investors,
past market trends, risk appetite, and expected returns are some of the determinants
of investments. The ability of the investor to save, easy liquidity of the investment, tax
relief, and the reasonable rate of return of an investment are a must for the investor to
consider first before making risky investments.
Same as savings, patterns of investments vary from person to person and even
with the same person during two periods because of different motives. Capital
appreciation, tax planning, diversification, and minimization of risks are examples of

17
investment motives. People invest not only to meet expected requirements in the future
but also the unexpected ones. Investments are essential especially during old age due
to lack of social security measures. Physical and financial investments are safer,
though the rate of return on financial investments has been declining. Therefore,
investors prefer capital and commodity market to take advantage of market determined
income from investment (Gasti, 2017).
Emergency fund. Emergency funds are those liquid assets that can be easily
and quickly converted into cash. According to Chang, Hanna, and Fan (1997),
emergency funds must be equivalent to two to six months amount of household
expenses and it should be liquid. It is also an amount that can cover the household
present needs without sacrificing the household’s current standard of living. Based on
theory, households should accumulate a reserve of wealth to protect themselves
against expected or undesirable financial risk (Deaton, 1992). It was characterized by
the behavior of households who are willing to have financial emergencies. It was also
to meet the expenses for unexpected events as mentioned by Mills and Amicks (2010).
Immediate expenses are vehicles, appliances or home repair, medical and dental
services, and bills not covered by insurance. The increased of households' payment
on their monthly bills, minimum payment on credit cards, utilization of payday loans,
and payment on mortgages or rent will result on a decrease of emergency fund
(Brobeck, 2008). Johnson and Widdows (1985) classified emergency funds into three
types namely quick, intermediate and comprehensive which differs in their liquidity of
assets. A quick fund includes checking, savings, and money market funds which are
very liquid assets. Intermediate funds are all quick funds plus certificates of deposit.
Quick and intermediate funds plus stocks, bonds, and mutual funds equals
comprehensive fund.
Household's ability to meet the three-month expenditure guideline for
monetary, comprehensive, and subjective emergency funds was examined through
specific independent variables. Household's attitude towards credit, whether the

18
household overspent, the expectation of future income, the working status of the
spouse and the alternatives to emergency funds are the independent variable used.
The actual emergency fund level held by the households is more closely related to the
ability to save than to need for emergency fund (Bi & Montalto, 2004).
Factors influencing emergency fund. Failure to save adequate emergency
funds is the result of poor planning or forecasting error. Measurement of financial
knowledge is a must in determining the cause of the problem. Seeking advices from
people who have enough knowledge in finance means greater possibility to
accumulate emergency funds. Differences on local economic climate and respondents’
exposure to state-mandated financial literacy programs influence the status of
emergency funds. Individuals with emergency funds were more likely to the older ones,
male, educated, married and those who have fewer dependents (Babiarz & Robb,
2013).
Factors affecting the short and long term savings of consumers as well as their
levels of preparation for a major financial emergency have been studied already by
several researchers. Most families do not save as much as guidelines must indicate
according to a study. Some looked at the composition of the household as it relates to
savings. Age and education plays a big part on the attainment of the household’s three
month standard. Savings also vary in terms household size. Multiperson households
were more likely to save more than single parents who are the least likely to meet the
standard for a sufficient emergency fund (Brand, Hogarth, Peranzi, & Vliestra, n.d.).
Retirement fund. According to the Security Bank, retirement fund is the plan
that a company sets for qualified employees to fund their retirement or separation
benefit in the future date, it can be set up by using fixed benefit plan, contributory plan
or the combination of the two. In fixed benefit plan, the benefit to be received by the
employee will be based on the length of service and current salary. On the other hand,
in the contributory plan, the benefit consists of the contributions of both employer and
employee plus the earnings earned from these contributions to the fund. It is more
19
flexible, the target benefit level can be easily met and it is also the most prevalent type
among employers. However, it also had disadvantages like greater uncertainty in long-
term plan costs, investment risks pertaining to retirement fund performance. On the
employer’s standpoint, defined contribution plan has also several advantages. Its cost
is more predictable and the investment risk of meeting the target benefit at retirement
is borne by the employees. On the negative side, they have little flexibility in funding
and there will be a greater need for administrative effort.
Household’s expenditures will increase a certain amount each year throughout
retirement as the traditional retirement planning assumes. It is because of higher
increase in withdrawals from retiree’s nest egg as it adjusts to economic changes like
inflation. On the contrary, the reality retirement planning assumes that household’s real
spending will decrease incrementally throughout retirement as they personal needs
will also decrease. It states that with inflation pulling spending needs up, human
nature’s tendencies pulling spending back down (Bernicke, 2005).
Income. According to investopedia.com, the money accumulated from
providing goods or services is called income. It is used to fund day-to-day
expenditures. Salary or wages earned from a job is then typical source of income of
individuals 65 years old and below. Retirees gain income from investments, pensions
and social security. In business, income is equals to overall sales minus all expenses
and taxes. Repeated change in employment, income, or financial well-being over time
is what economic instability means. These changes are not intentional, predictable, or
part of upward mobility. One factor that results to economic instability is the changes
in family structure or composition. It directly affects the income of the household. The
number of children or elders in a household, the marital status of its head can affect
their expenses and accumulation of resources. Low-income individuals have higher
rates of cohabitation, divorce, union dissolution that’s why they are the ones who are
experiencing instability in family composition (Hill, Romich, Mattingly, Shamsuddin, &
Wething, 2017)
20
Household income. According to Bartosova and Longford (2014), household
income refers to overall income accumulated by all the members of a household.
However, household income tends to adjust depends on the composition of the
household. Larger households require greater resources, but they also have greater
capability to generate higher income because they have more number of adults who
can perform works. In contrast, bigger household can reduce amount of required
resources compared to two households with fewer members.
Family income. Total family income is the total amount accumulated from
primary income and from other sources that all family members received during a
certain period of time. Salaries and wages, commissions, tips and bonuses that are
derived from operation of family-operated enterprise and from the practice of
profession are classified as primary income. Income from other sources includes rental
from owner-occupied units, interests, share of agricultural products, pension support
and the value of food and non-food items received as gifts by the family as well as
services rendered free of charge to the family (Ericta & Fabian, 2009).
Household
According to Dambula and Chibwana (2004), household is defined as a person
or group of people living in the same house, sharing expenses and earning income in
order to sustain their needs. A household can be headed by either male or female and
also varies in size. Average household size is the number of usual members of
household in a certain place.
Households in Cavite
The Philippine Statistics Authority (PSA) provides a record of the household's
information in the province of Cavite. As of February 2018, the record shows that the
number of household in the province is continuously increasing. From 428 879 on 2000
it rose up to 887 283 on 2015. The latest number of household consists of a population
of 3 660 832 people having more females than males. On the contrary, the average
21
household size reported was decreasing from 4.78 on 2000 it becomes 4.1 in 2019.
The smaller the size of the household means lower opportunity when it comes to
income but also means lower expenses.
Challenges in Household Finances
People do have different perception in managing money that is why it is hard
to predict how a household will use its finances (Campbell, 2006). This is an
unpredictable behavior that results to two challenges that a household should
overcome. The first one is the measurement or how much they actually invest. Some
people do not stay in only one financial institution in trusting their savings, they prefer
several of this having different tax status. The other challenge is modelling or how they
should invest. Mostly, they prefer long term financing considering their future plans but
for some reason there are still few who takes risks on short term in return of immediate
wealth.
Household Vulnerability to Income Poverty
Households that are poor and were poor in the past due to lack of income are
the main targets in measuring poverty. It is important to prevent households in
becoming poor and as well as create ways to help those who are already poor and
likely to stay poor. Several assurance must be developed aside from income from
employment to lessen the possibility of experiencing poverty. Those poor households
are the ones considered vulnerable to poverty. Unexpected events can also cause the
possibility of being poor to those non-poor households that may lead to performing
vicious ways in order to overcome poverty (Albert, Elloso, & Ramos, 2008).
Household reference person is the person, man or woman, typically aged 18
years or older who carries the main responsibility in the household. In cases of
unrelated persons sharing dwelling on an equal basis, the one who they consider the
head is accepted in the census. There are several types of households. One-parent
households are household headed by one, can be man or woman with his/her
22
unmarried children. Two-parent household is a household consisting of married or
unmarried couple living with their children who are neither married nor separated.
Extended family, in addition, consists of combinations of adults and children linked by
blood, marriage or adoption. Another type is those which consist of related and non-
related persons, non-related persons and group dwellings (Department of Statistics,
2012).
23
METHODOLOGY
This chapter presents the research design, sources of data, participants,
sampling techniques, data gathered, and statistical treatment of data used in the study.
Research Design
Research design serves as a plan to show the sources of data, how data are
to be collected and the methods to be used in data analysis. Descriptive, comparative,
and causal/explanatory research designs were employed in the study.
Descriptive research design was used to describe the characteristics of the
variables involved. This design described and determined the household’s
sociodemographic, socioeconomic profile, and financial stability before and after the
implementation of Tax Reform for Acceleration and Inclusion (TRAIN) law.
Comparative research design was also used to compare the difference of two
or more variables. This design compared the household’s expenditures, taxes, and
financial stability before and after the implementation of new tax reform.
In addition, the study used causal/explanatory research design to identify the
effect that takes place in the financial stability of households upon the implementation
of Tax Reform for Acceleration and Inclusion (TRAIN) law.
Sources of Data
Primary and secondary data were considered as sources of data. Primary data
are those data directly obtained from the participants who were involved in the study.
It was obtained from the responses of the participants through survey questionnaires,
interviews, and direct observations.
In addition, secondary data were published data or past collected information
related in the study. It was gathered from the websites of Philippine Statistics Authority
(PSA), Department of Finance, online journals, published theses, and other online
sources.
24
Participants of the Study
The participants of the study were households from the top four most populous
cities in Cavite: Bacoor, Dasmariñas, Imus, and General Trias. More specifically, the
study focused on the heads of households ages 18 years old and above. The
participants of the study is consisted of 330 heads of household who have enough
knowledge regarding saving and spending matter of their households.
Sampling Techniques
Sampling technique describes the procedure that the study used to gather the
participants. It was used to draw conclusions about population’s characteristics by
directly observing only a portion of the population. The place was selected through
purposive sampling technique wherein the top four most populous cities in Cavite were
considered. Moreover, Slovin’s formula was employed to calculate the number of
actual sample:
Where:
𝑁 474,498 n = sample size
𝑛= 1+ 𝑁𝑒 2
𝑛= 1+ 474,498(.055)2
N = total population
474,498 e = desired margin of
𝑛=
1,436.35645 error
𝑛 = 330.34 𝑜𝑟 330
The participants were selected through stratified sampling technique wherein
the population was divided into subgroups or strata who all share similar
characteristics. Then, purposive sampling technique was used to obtain where, in
specific, the participants were selected, the top four most populous barangays of each
selected cities were considered. Furthermore, the study used the systematic sampling
technique wherein a pattern or interval was used to select which household was
considered.
25
Table 1. Distribution of participants in selected cities in Cavite
AREA HOUSEHOLD SAMPLE PERCENTAGE

POPULATIONS
Bacoor 149,160 102 31
Dasmariñas 147,799 102 31
Imus 97,397 70 21
General Trias 80,142 56 17
TOTAL 474,498 330 100
Source: Philippine Statistics Authority, 2015
Data Gathered
Prior to the data collection, a letter of request addressed to each barangay
captains was presented to secure permission to conduct the study (Appendix 1). Upon
approval, the survey questionnaires (Appendix 2) were personally distributed to the
participants to inform them the objectives of the study as well as to assure
confidentiality of the responses. Personal interviews were conducted to explain and
seek answer on the main objective of the study. Data collection was done from
Mondays to Saturdays with the minimum target of 20 head of the households each
day.
The main instrument of the study was a modified survey questionnaire in which
some parts were adapted from the study of Batbatan, Landicho, and Lepardo (2017).
The survey questionnaire was divided into four parts: head of the household’s
sociodemographic profile, head of the household’s socio economic profile, household’s
expenditures, and household’s financial stability.
Head of the household’s sociodemographic profile. This part asked the
sociodemographic characteristics of participants that included their age, sex, civil
status, educational attainment, and employment status.

26
Head of the household’s socioeconomic profile. The second part was
devoted to characterize the socioeconomic profile of the participants which required
the information about the actual household size, number of dependents, and
household income.
Household’s expenditures. The third part determined the actual amount of
households’ expenses on food, rentals, transportation and communication, utilities,
education, medical care, payment loans, taxes, and recreation and leisure.
Head of household’s financial stability. This part distinguished the actual
amount of households’ allocation for savings, investments, emergency funds, and
retirement fund.
Furthermore, the study considered secondary data to determine the actual
percentage change on personal income tax. It was obtained from government websites
and some online sources.
Statistical Treatment of Data
A variety of statistical tools were used to analyze and interpret all the data
collected from the participants in order to obtain an accurate conclusion.
The following descriptive statistical tools were used to present all the responses
and information collected from the participants. Percentage was used to express how
large or small one quantity is relative to another quantity. Mean is the average of all
data values. Standard deviation is used to determine the amount of variation or
dispersion of a set of data values. Frequency count refers to the tabulation of how
many times a certain variable occurs within a particular group or interval. Range is
used to determine the minimum and maximum values within a set of numbers. These
tools were used to describe the households’ sociodemographic, socioeconomic
characteristics, household expenses, and financial stability out of the total number of
sample.
27
Moreover, inferential statistical tool like t-test was used to determine the
difference between two variables. It was used to identify the difference of the
household expenditures, TRAIN law and financial stability determinants before and
after the implementation of the new tax reform.
Furthermore, simple linear regression was used to predict the value of the
dependent variables based on the value of the independent variables. It was also used
to identify the effect of TRAIN law on the financial stability of households. Simple linear
regression was obtained through the model:
𝑦 = 𝑓(𝛽0 + 𝛽1 𝑋1 )
In this model, y represents the expected value of dependent variable which are
household’s savings, investment, retirement fund, and emergency fund, 𝑋1 through 𝑋𝑘
are distinct independent or predictor variable as taxes, 𝛽0 is the value of y when all of
the independent variables are equal to zero, and 𝛽1 through 𝛽𝑘 are estimated
regression coefficients.
Model 1:
∆ Savings = 𝑓(𝛽0 + 𝛽1 Taxes)
Model 2:
∆ Emergency fund = 𝑓(𝛽0 + 𝛽1 Taxes)
Model 3:
∆ Investment = 𝑓(𝛽0 + 𝛽1 Taxes)
Model 4:
∆ Retirement fund = 𝑓(𝛽0 + 𝛽1Taxes)
Description of the variables
Where:
∆ Savings (change in savings) = the change on actual amount of savings after
the implementation of TRAIN law.

28
∆ Emergency fund (change in emergency fund) = the change on actual amount
of emergency fund after the implementation of TRAIN law.
∆ Investment (change in investment) = the change on actual amount of
investment after the implementation of TRAIN law.
∆ Retirement fund (change in retirement fund) = the change on actual amount
of retirement fund after the implementation of TRAIN law.
Taxes = actual amount of household’s taxes including lower personal income
tax, expanded value-added tax, real property tax, and excise tax on goods and service.
29
RESULTS AND DISCUSSION
This chapter deals with the discussion of head of the household’s
sociodemographic and socioeconomic characteristics, changes in the monthly
expenditures, taxes, and financial stability.
Sociodemographic Characteristics of
Table 2 presents the participants’ sociodemographic characteristics such as
age, sex, civil status, educational attainment, and employment status.
Age. The age of the head of households from the top four most populous cities
in Cavite ranged from 20 to 78 with a mean of 43.17 and a standard deviation of
12.145. Twenty-seven percent of the participants belonged to the age bracket of 40 to
49 years old while least of them aged 70 years old and above. This shows that more
than a quarter of the heads of households were at the middle age wherein they have
the capability to be the leader of their household unlike those aged 70 and above that
are no longer fit to the role because of their age and health condition.
According to Sichande, Michelo, Halwindi, and Miller (2015), heads of the
households whose age ranged from 35 years old to 59 years old had the highest
percentage of the population. This exhibits that heads of households are in their middle
ages where they are still capable of working and earning.
Sex. Results demonstrated that out of the heads of the households surveyed,
more than half of the households (51%) are females while the rest were headed by
males.
The findings were in accordance to the records of the Philippine Statistics
Authority (2015) that the population of females in the households of Cavite is greater
than those of males with a sex ratio of 97 males for every 100 females for the year
2018. It also confirms that the female headship appears to be increasing continuously
29
in the Global South (Chant, 2015).

30
Table 2. Sociodemographic characteristics of the head of households

CHARACTERISTIC
FREQUENCY PERCENTAGE
(n=330) (%)
Age
20 to 29 50 15.20
30 to 39 82 24.80
40 to 49 89 27.00
50 to 59 79 23.90
60 to 69 25 7.60
70 and above 5 1.50
Range = 20 – 78
Mean = 43.17
Standard Deviation = 12.145
Sex
Female 169 51.00
Male 161 49.00
Civil status
Single 80 24.00
Married 232 70.00
Widowed 18 6.00
Educational attainment
Elementary graduate 43 13.00
Highschool graduate 142 43.00
College graduate 142 43.00
Master’s degree 3 1.00
Doctorate degree 0 0.00
Employment status
Self-employed 111 34.00
Employed government 14 4.00
Employed private 184 56.00
Others 21 6.00
Based on the study conducted by Miralao (2007), female headship in the
Philippines has been continuously increasing not only as a result of widowhood but
mostly due to the social changes that influence the family life and the role of women.
However, it contradicts the notion that head of the households are dominated by male.
Civil status. Results illustrated that 70 percent of the heads of household
participants were married. Moreover, 24 percent of the heads of the households were
still single and the remaining percentage were widowed. The findings prove that
majority of the head of households were married and already have a family.
30
31
Results confirmed the study of Bernardino (2012) that stated that married
household heads compromised the highest percentage out of the total population of
the heads of household in the Philippines at 80.37 percent while single household
heads were only 3.77 percent.
Educational attainment. Results revealed that both highschool and college
graduates covered almost half of the sample population (43% each), 13 percent of
them were elementary graduates, and only a small percentage comprised those with
master’s degrees.
This is supported by the study conducted by the Philippine Statistics Authority
(2018), wherein most of the heads of households (28.7%) finished more than
secondary education or tertiary education and followed by heads of households
(21.7%) who completed secondary education.
Employment status. More than half (56%) of the participants were employed
in private companies; 34 percent of them were self-employed; and only 4 percent were
employed in the government agencies.
The result confirmed the findings of the Philippine Statistics Authority (2018)
that majority of the working Filipinos are employed in private agencies compromising
62.3 percent of it. The remaining individuals are those working in the government and
are self-employed (Gavilan, 2018). This shows that the income and benefits of most of
the households are provided by private companies.
Socioeconomic Characteristics of
The characteristics of households included the household’s size, number of
dependents, and monthly income. Table 3 presents the characteristics of households.
Household size. The households surveyed had 1 to 15 members with an
average of five. The result revealed that 56 percent of the households had four to six
members, 26 percent had one to three household members while only 15 percent had
31
six to nine household members.

32
Table 3. Socioeconomic characteristics of the households

CHARACTERISTIC
(n=330) (%)
Household size
1 to 3 86 26.00
4 to 6 186 56.00
7 to 9 49 15.00
10 to 12 8 2.00
13 and above 1 1.00
Range = 1 – 15
Mean = 4.83
Number of dependents
0 6 1.82
1 to 3 207 62.73
4 to 6 104 31.52
7 to 9 11 3.33
10 and above 2 0.61
Range = 0 – 11
Mean = 3.24
Monthly income
2,500 to 12,500 42 13.00
12,501 to 22,500 135 41.00
22,501 to 32,500 77 23.00
32,501 to 42,500 37 11.00
42,501 to 52,500 14 4.00
52,501 to 62,500 10 3.00
62,501 to 72,500 2 1.00
72,501 to 82,500 2 1.00
82,501 to 92,500 1 0.00
92,501 to 102,500 4 1.00
102,501 to 112,500 2 1.00
112,501 and above 4 1.00
Range = 2,500 – 180,000
Mean = 27,838.42
Standard Deviation = 22,504.413
This exhibits that more than half of the households belongs large household
size having four to six members. However, the Cavite Ecological Profile (2016) showed
that the average household size in Cavite was four. In addition, the United Nations
Database of Household Size and Composition (2017) mentioned that small average
household sizes had fewer than three persons per household, while large average
household sizes had five or more persons per household.

32
33
Number of dependents. Out of the participants surveyed, majority (207) of the
households had zero to three dependents, 104 households had four to six dependents,
and only one percent of the total sample had more than 10 dependents. Hence, the
remaining of them had no dependents. The average number of dependents was three.
The results revealed that households settled to have a small number of dependents.
This implies that the number of dependents is continuously increasing that it
exceeds the number of working population in Cavite. According to the Philippine
Statistics Authority (PSA), the dependency ratio in Cavite is 53.3 percent in 2018. It
means that 53.3 percent of the number of individuals in a household is dependent on
the remaining 46.7 percent working ones.
Monthly income. The monthly income of the participants ranged from
P2,500.00 to P180,000.00 with a mean of P27,838.42 and a standard deviation of
P22,504.413. The results showed that 135 of the households had income of
P12,501.00 to P22,500.00, 77 households were earning P22,501.00 to P32,500.00,
while only 5 percent had earnings P62,501.00 and above. This manifests that almost
half of the households belonged to the compensation earners that will benefit more
upon the enforcement of TRAIN law. Based on the survey conducted by Philippine
Statistics Authority (2016), results revealed that an approximate amount of
P267,000.00 annually was the average family income or a monthly income of
P22,250.00.
Household Expenditures in Cavite
Household expenditures describe how much money does households allocate
to address the expenses on food, rentals, transportation, and communication, utilities,
education, medical care, loans, taxes, and recreation and leisure before and after the
implementation of TRAIN law. Table 4 presents the amount of household expenditures.
Food. The total expense of the households for food before the implementation
of TRAIN law ranged from P1,000.00 to P30,000.00 with a mean and standard
33
34
deviation of P6,993.91 and P3,971.64. However, after the implementation of TRAIN
law, expense for food ranged from P1,000.00 to P30,000.00 with a mean of P9,629.97
and a standard deviation of P5,200.41.
As for the results, households who spent P1,000.00 to P11,000.00 for food
decreased from 89 to 65 percent when TRAIN law was implemented. On the other
hand, households who spent P11,001.00 to P16,000.00 rose up from 9 percent to 31
percent. This shows that some of the households increased their spending on food
from P1,000.00 to P11,000.00 to P11,001.00 to P16,000.00.
Therefore, results revealed that there was a difference in the household
expenses for food before and after the implementation of TRAIN law, it was noted with
a p-value of .000. This implies that after the implementation of TRAIN law, expenses
for food were viewed to be a bit higher than before.
According to Villafuerte (2013), Filipino families spend 37 percent of their
income for food in the years wherein TRAIN law has not been implemented yet, but as
of 2018, the Commission on Population stated that the expense of households for food
rose up to 40 percent of their total monthly income. Unlike western countries of United
States and United Kingdom, they only spend 10 percent of their monthly expenditures
on food. This indicates that household expenses on food changes as they adjust to the
changes happening economically.
Rentals. Out of the heads of the households surveyed, data showed a total
expense for rentals which ranged P500.00 from P7,000.00 with a mean of P593.33
and P621.52 and a standard deviation of P1,361.60 and P1,428.88 before and after
the implementation of TRAIN law. The results revealed that after the implementation
of TRAIN law, households who settled from P500.00 P2,500.00 for rent decreased by
seven units. This decrease happens to be the increase on households who settled
P2,501. to P7,000.00. Hence, the remaining participants (259) had no expense for
rent. This conveys that after the implementation of TRAIN law heads of the households
34
increased their settled money for rentals.

35
Table 4. Amount of household expenditures before and after the implementation of TRAIN law
VARIABLE t p-value REMARKS
Before After Before After
Food -18.755 .000 Reject 𝐻𝑜1

1,000 to 6,000 182 116 55.20 35.20
6,001 to 11,000 112 98 33.90 29.70
11,001 to 16,000 30 103 9.10 31.20
16,001 to 21,000 2 8 0.60 2.40
21,001 to 26,000 1 2 0.30 0.60
26,000 and above 3 3 0.90 0.90
Range: 1,000 to 30,000 1,000 to 45,000
Mean: 6,993.91 9,629.97
Standard Deviation: 3,971.64 5,200.41
Rentals -2.666 .008 Reject 𝐻𝑜1

0 259 259 78.50 78.50
500 to 2,500 41 34 12.40 10.30
2,501 to 5,000 23 28 7.00 8.50
5,001 and above 7 9 2.10 2.70
Range: 500 to 7,000 500 to 7,000
Mean: 593.33 621.52
35
36
Table 4. Continued.
VARIABLE t p-value REMARKS
Transportation and communication

-7.286 .000 Reject 𝐻𝑜1
0 59 59 17.90 17.90
64 to 10,000 267 264 80.90 80.00
10,001 to 20,000 2 5 0.60 1.50
20,001 to 30,000 1 1 0.30 0.30
30,001 and above 1 1 0.30 0.30
Range: 64 to 40,000 64 to 40,000
Mean: 1,608.07 1,795.43
Utilities -10.225 .000 Reject 𝐻𝑜1

0 4 4 1.20 1.20
150 to 5,000 320 313 97.00 94.80
5,001 to 10,000 3 9 0.90 2.70
10,001 to 15,000 3 2 0.90 0.60
15,001 and above 0 2 0.00 0.60
Range: 150 to 15,000 150 to 17,000
Mean: 1,650.98 1,959.45
36
37
Table 4. Continued.
VARIABLES t p-value REMARKS
Education -3.793 .000 Reject 𝐻𝑜1

0 92 91 27.90 27.60
95 to 10,000 230 230 69.70 69.70
10,001 to 20,000 5 6 1.50 1.80
20,001 to 30,000 1 1 0.30 0.30
30,001 to 40,000 1 1 0.30 0.30
40,001 and above 1 1 0.30 0.30
Range: 95 to 45,000 95 to 45,000
Mean: 1,936.77 2,058.52
Medical care -0.066 .947 Accept 𝐻𝑜1

0 185 181 56.10 54.80
80 to 10,000 142 147 43.00 44.50
10,001 to 20,000 2 1 0.60 0.30
20,001 to 30,000 0 0 0.00 0.00
30,001 and above 1 1 0.30 0.30
Range: 80 to 31,500 90 to 31,500
Mean: 906.72 908.79
37
38
Table 4. Continued.
Payment of loans -1.380 .169 Accept 𝐻𝑜1

0 187 180 56.70 54.50
200 to 10,000 131 137 39.70 41.50
10,001 to 20,000 9 9 2.70 2.70
20,001 to 30,000 0 1 0.00 0.30
30,001 to 40,000 2 2 0.60 0.60
40,001 to 50,000 0 0 0.00 0.00
50,001 to 60,000 0 0 0.00 0.00
60,001 and above 1 1 0.30 0.30
Range: 200 to 65,600 200 to 65,600
Mean: 1,912.04 2,047.08
Taxes 8.605 .000 Reject 𝐻𝑜1

0 102 122 30.90 37.00
17 to 10,000 218 201 66.10 60.90
10,001 to 20,000 5 2 1.50 0.60
20,001 to 30,000 2 2 0.60 0.60
30,001 to 40,000 1 3 0.30 0.90
40,001 and above 2 0 0.60 0.00
Range: 17 to 48,000 21 to 38,000
Mean: 1,627.96 968.98
38
39
Table 4. Continued.
Recreation and leisure -1.138 .256 Accept 𝐻𝑜1

0 150 138 45.50 41.60
100 to 10,000 174 187 52.70 56.90
10,001 to 20,000 5 2 1.50 0.60
20,001 and above 1 3 0.30 0.90
Range: 100 to 29,000 100 to 19,562
Mean: 1,657.44 1,761.54
Average
220 to 5,000 312 310 94.50 93.90
5,001 to 10,000 13 15 3.90 4.50
10,001 and above 5 5 1.50 1.50
Range: 220 to 13,000 222 to 13,778
Mean: 2,098.58 2,416.81
* t-test is significant at the 0.05 level (2-tailed).

*t-test (p-value<0.05 Reject)
39
40
Therefore, results revealed that there was a difference on the household
expenses on rentals before and after the implementation of TRAIN law with a p-value
of .008. This denotes that after the execution of TRAIN law, costs for rental were
perceived to be a bit higher than before.
On the contrary, Ballesteros, Ramos, and Magtibay (2016) stated that the
prices of basic commodities, primarily the rent in the Philippines will be stable up to the
year 2020. This means that the price of rent is steady and cannot be changed easily
as it is under the Rent Control Act of 2009. Also, Housing Rental Study (2015) showed
that prices of rent in the Philippines are affordable for lower income brackets. The
government also ensures the protection of the tenants by implementing several
policies.
Transportation and communication. In terms of transportation and
communication, a range from P64.00 to P40,000.00 of the total expenses of the
households was revealed alongside a mean and standard deviation of P1,608.07 and
P3,078.58 before, and P1,795.43 and P3,205.74 after the implementation of TRAIN
law.
Based on the results, a decrease of one percent was noted on the number of
households spending P64.00 to P10,000.00 for transportation and communication,
while it was otherwise, for those households spending P10,001.00 to P20,000.00 after
the execution of TRAIN law. However, 18 percent of the total sample had no expense
on transportation and communications. The results showed an increase on spending
of heads of the households for transportation and communication was observed after
As for the result, a p-value of .000 showed that there was a difference on the
household expenses on transportation and communication before and after the
implementation of TRAIN law. It demonstrates that the implementation of TRAIN law
is highly significant to the transportation and communication expenses of households.

40
41
As stated on the study of Murray (2018), in overall expenses, transportation
cost is one of the significant part in which it continuously increases and the proportion
allocated for it will also increase that results burden to the consumers. Households
started making adjustments to their transportation expenses as the fuel steadily
increases (Kaiser, 2008). Income elasticity is found to be positive that indicates
demand for both transportation and telecommunications increases with increasing
income (Choo, 2007). The results showed that the cost of transportation and
communication increased.
Utilities. The results revealed a ranged of P150.00 to P15,000.00 as
households expense for utilities with a mean of P1,650.98 and a standard deviation of
P1,652.32 before the implementation of TRAIN law. However, after the implementation
of TRAIN law, households expense for utilities ranged from P150.00 to P17,000.00
with a mean of P1,959.45 and a standard deviation of P1,908.44 after the
implementation of TRAIN law.
Out of the participants surveyed, results showed a decrease of two percent of
the households who accumulated P150.00 to P5,000.00 for utilities. Nonetheless,
households who accumulated P5,001.00 to P10,000.00 for utilities marked up by one
percent as TRAIN law was implemented. Thus, the remaining households (4) had no
consumption on utilities. The results revealed that households increased their
accumulated amount for utilities upon the employment of TRAIN law.
The outcome of the study informed that expenses on utilities were different
before and after the implementation of TRAIN law with a p-value of .000. It signifies
that after the pursuit of TRAIN law, expenses for utilities were perceived to be a bit
higher than before.
According to Burke (2018), household expense on utilities should only to be
eight to 10 percent of its monthly income. The result was confirmed by the study as its
average expense for utilities was below 10 percent of the average monthly income.
41
Higher prices of oil, petroleum and other sources of energy directly affect the price of
42
electricity and other utilities wherein the burden will be passed to the households as
they pay higher (Bacon, Bhattacharya, & Kojima, 2010). Increasing attention to the
affordability of utilities was brought by rising costs and recent high-profile crises
(Teodoro, 2018). The results revealed that households’ expenses allotted for utilities
increased.
Education. The findings revealed that the total expense of the households for
education ranged from P95.00 to P45,000.00 with a mean and standard deviation of
P1,936.77 and P3,964.03 before and P2,058.52 and P4,177.17 after the
Results showed that out of the participants surveyed, households who allotted
P95.00 to P10,000.00 for education remained to spend the same amount even after
TRAIN law was implemented, whereas those who allotted P10,001.00 to P20,000.00
had increased by one unit. Moreover, households who had no expense for education
decreased by one unit as TRAIN law was executed. This exposes that there was an
increase on the budget allocation upon the implementation of TRAIN law for
household’s allotment for education.
As a result, a p-value of .000 declared that there was a difference on household
expenses on education before and after the implementation of TRAIN law. It entails
that the enforcement of TRAIN law is highly significant to the households’ expenses
on education.
On the contrary, in order to improve the education of the household members’
one must choose a variety of programs or strategies in which the costs always matter.
Cost of education can help in choosing the program as it somehow reflects the quality
it will provide to the students (Hollands & Levin, 2017). Spending more in education is
the priority of most educated and richer heads of the households, as they invest more
and have a higher percentage of their budget allocated for education (Acerenza &
Gandelman, 2016).
42
43
Medical care. Out of the heads of households surveyed, results revealed that
the total expense for medical care ranged from P80.00 to P31, 500.00 with a mean of
P906.72 and a standard deviation of P2,453.20 before the implementation of TRAIN
law. On the other hand, after the implementation of TRAIN law, households expense
for medical care ranged from P90.00 to P31,500.00 with a mean of P908.79 and a
standard deviation of before and P2,430.69.
Results showed that participants who used P80.00 to P10,000.00 for medical
care increased by five unit, while in contrast, those who used an amount of P10,001.00
to P20,000.00 decreased by one unit after the implementation of TRAIN law. In
addition, participants who had no consumption on medical care decreased from 185
to 180 households. This suggests that household who used up to P10,000.00 for
medical care still spend the same amount even after the execution of TRAIN law.
According to the results, a p-value of .947 revealed that there was no difference
on the household expenses on medical care before and after the implementation of
TRAIN law.
According to Health Secretary Francisco Duque III (2019), DOH monitors the
prices of medicines to make sure that the new tax measure will help and relieve
patients that rely solely on affordable medicines for everyday use to prevent serious
and deadly complications. Out-of-pocket expenses are the main source of financing
medical care for Filipinos especially for the poor as health care remains inaccessible
and inequitable for all. However, the reliance to this financing tends to push Filipino
households into poverty (Ulep & Dela Cruz, 2013).
Loans. In terms of payment of loans, the results revealed that households
spent an amount ranged from P200.00 to P65,600.00 with a mean of P1,912.04 before
and P2,047.02 after the implementation of TRAIN law and a standard deviation of
P5,380.20 before and P5,992.49 after the implementation of TRAIN law.
Out of the participants surveyed, households who pays P200.00 to P10,000.00

43
for loan increased by six units. In addition, those who pay an amount of P20,001.00 to
44
P30,000.00 also increased from zero to one household after TRAIN law was executed.
However, participants who had no expense on loans decreased from 187 to 180 as
TRAIN law was executed. The results manifested that majority of the households
remained to paid up to P10,000.00 for loan even after the employment of TRAIN law.
The outcome showed that there was no difference on the households’
expenses on loans before and after the implementation of TRAIN law with a p-value of
.169. Hence, expenses on loans are still the same when TRAIN law was implemented.
Households from rural areas with low income tend to survive the continuous
increasing cost of living and other economic conditions wherein they are forced to
spend more money through borrowing funds from financial institutions (Mustapha,
Rashid, & Nasir, 2011). Most of the acquired loans of households are amortized loans
in which payments are regular and constant in manner, thus means that there is no
effect even if other factors change. Filipinos are known for borrowing in order to finance
something. In the Philippines there are different types of credit or loans that Filipinos
are continuously acquiring. Loans are provided by informal institutions, social security
agencies, cooperatives, employee associations, and non-bank institutions (Tan, 2008).
Taxes. The findings revealed that the total expense of the households for taxes
ranged from P17.00 to P48,000.00 with a mean of P1,627.96 and a standard deviation
of P5,018.58 before the implementation of TRAIN law. On the other hand, after the
implementation of TRAIN law, households expense for taxes ranged from P21.00 to
38,000.00 with a mean of P968.98 and a standard deviation of P4,025.81 after the
Based on the results, households who settled an amount of P17.00 to
P10,000.00 for tax decreased from 66 to 61 percent, as well as those who settled from
P10,001.00 and above which also declined from three percent to two percent when
TRAIN law was implemented. Thus, the remaining participants who had no expense
on tax increased from 102 to 122. This signifies that due to the implementation of
44
45
TRAIN law households who settled so much amount for taxes reduced to a minimal
amount.
According to the results, p-value of .000 suggests that there was a difference
on the households’ expenses on tax before and after the implementation of TRAIN law.
It suggests that payment for personal taxes differs during the implementation of the
law.
Personal income tax paid by the Filipinos were either lower or totally exempted,
value added tax for business were expanded and prices of some products enlarged
due to the excise tax through the implementation of TRAIN law. This means that the
households’ expenses on tax had significant changes.
According to Albert, Asus, and Vismanos (2017), taxes are part of household
expenditures and can be subjected to change through the policies implemented by the
government; however, taxes are not considered final expenditures as it is not acquired
purely for personal consumption.
Recreation and leisure. The results showed that total expense of the
households for recreation and leisure ranged from P100.00 to P29,000.00 with a mean
and standard deviation of P1,657.44 and P2,989.89 before and ranged from P100.00
to P19,562.00 with a mean and standard deviation of P1,761.54 and P2,989.89 after
As per the results, households who spent an amount of P100.00 to P10,000.00
for recreation and leisure rose up by four percent, while those who laid out P10,001.00
to P20,000.00 for recreation and leisure decreased by three units. In addition, those
who had no expense on recreation and leisure decreased from 150 to 138. This shows
that households maintained their laid out amount for recreation and leisure even after
the employment of TRAIN law.
The results implied that a p-value of .256 had no difference on the household’s
recreation and leisure before and after the implementation of TRAIN law. This imposes
45
46
that after the implementation of TRAIN law, recreation and leisure were perceived to
be a bit lower.
The Family Income and Expenditure Survey (2015) showed that households
spent also on different expenditures such as miscellaneous goods and services and
clothing and footwears. Though minimal percentage of their total expenditures is
covered by these expenditures, still it contributes on their monthly budget.
Average household expenditures. Based on the overall results, the average
expenditures of households ranged from P220.00 to P13,000.00 with a mean of
P2,098.58 and a standard deviation of P1,783.95 before the implementation of TRAIN
law. However, after the implementation of TRAIN law, households average expense
ranged from P222.00 to P13,778.00 with a mean of P2,416.81 and a standard
deviation of P1,862.26.
Of the participants surveyed, a minimum decrease from 95 to 94 percent was
observed to the number of households who used up to P5,000.00 as their average
expenses. On the other hand, an essential increase from four to five percent was noted
for the households who used P5,001.00 to P10,000.00 after the implementation of
TRAIN law. The results showed that majority of the households remained to used up
to P5,000.00 as their average expenses while, some adjusted their expenses to a
higher amount because of their consumption on food after the execution of TRAIN law.
Overall, household expenditures were viewed to have changes after the
implementation of TRAIN law. Economic choices are influenced by several factors
including tax policy and in addition tax rate cuts could lead to a larger economy (Gale
& Samwick, 2014).
Financial Stability of Households

in Cavite
Financial stability refers to having enough income to cover the daily expenses
of households. It deals with savings, investment, emergency fund, and retirement fund.
46
Table 5 presents the amount allotted by households on their financial stability.

47
Savings. Out of the heads of the households surveyed, results showed that
the total monthly savings of the households ranged from P80.00 to P50,000.00 with a
mean of P5,024.33 and a standard deviation of P3,520.61 before the implementation
of TRAIN law. However, due to the execution of TRAIN law, households’ total monthly
savings ranged from P80.00 to P60,000.00 with a mean of P7,445.018 and a standard
deviation of P6,105.328.
After the implementation of TRAIN law, households who saved P80.00 to
P10,000.00 monthly rose up from 80 percent to 82 percent. On the contrary, those who
saved P10,001.00 to P30,000.00 decreased by four percent. In addition, households
who had no savings increased from 37 to 40 as TRAIN law was implemented. The
results implied that majority of the households settled to save up to P10,000.00
monthly due to the changes brought by TRAIN law.
The results revealed that there was a difference between the households’
savings before and after the implementation of TRAIN law with a p-value of .000. It
signifies that savings of households were found to be lower upon the implementation
of TRAIN law.
Suppakitjarak and Krishnamra (2015) stated that the households’ average
saving rate was 29.17 percent of income. Households save more on conventional
saving forms such as bank deposits, insurance policies, gold and properties than in
financial assets such as government bond, mutual fund, corporate bond and stock.
According to Abebe (2017), savings was influenced from high level of
unemployment, low level of income, the engagement of a large proportion of population
in the informal sector, and poor performance of the economy. In addition, the study
showed the factors that affects rural household savings attitudes consisting of land
size, income level, marital status, educational attainment, employment status, and
habit of drinking of alcohol of household (Karim, 2010).

47
48
Table 5. Amount of financial stability of households before and after the implementation of TRAIN law
Savings 11.401 .000 Reject 𝐻𝑜2

0 37 40 11.20 12.10
80 to 10,000 263 270 79.70 81.80
10,001 to 20,000 16 13 4.80 3.90
20,001 to 30,000 8 2 2.40 0.60
30,001 to 40,000 3 3 0.90 0.90
40,001 to 50,000 1 2 0.30 0.60
50,001 to 60,000 2 0 0.60 0.00
60,001 and above 0 0 0.00 0.00
Range: 80 to 60,000 80 to 50,000
Mean: 5,024.33 3,520.61
Emergency fund 3.207 .001 Reject 𝐻𝑜2

0 66 67 20.00 20.30
75 to 5,000 257 260 77.90 78.80
5,001 and above 7 3 2.10 0.90
Range: 75 to 10,000 75 to 15,000
Mean: 824.28 713.77
48
49
Table 5. Continued.
Investment 2.049 .041 Reject 𝐻𝑜2

0 157 158 47.60 47.90
100 to 5,000 166 168 50.30 50.90
5,001 to 10,000 5 2 1.50 0.60
10,001 to 15,000 1 1 0.30 0.30
15,001 and above 1 1 0.30 0.30
Range: 100 to 16,000 100 to 16,000
Mean: 343.94 299.39
Retirement fund 1.847 .066 Accept 𝐻𝑜2

0 77 77 23.30 23.30
70 to 2,000 239 240 72.40 72.80
2,001 to 4,000 7 7 2.10 2.10
4,001 to 6,000 6 3 1.80 0.90
6,001 and above 1 3 0.30 0.90
Range: 70 to 6,015 70 to 8,000
Mean: 739.98 716.73
Standard Deviation: 886.35 867.67

*t-test (p-value<0.05 Reject)
49
50
Emergency fund. The results revealed that the households’ total monthly
emergency fund ranged from P75.00 to P10,000.00 with a mean of P824.28 and a
standard deviation of P1,528.555 before the implementation of TRAIN law. On the
other hand, households’ total monthly emergency fund ranged from P75.00 to
P15,000.00 with a mean of P713.77 and a standard deviation of P1,382.251 after the
It further showed that the households who used P75.00 to P5,000.00 each
month for emergency fund increased from 78 percent to 79 percent while households
who allocated P5,001.00 and above depleted by one percent when TRAIN law was
executed. In addition, households who had no emergency fund increased from 66 to
67 due to the execution of TRAIN law. This revealed that households tend to lower
their emergency fund after the enforcement of TRAIN law.
Based on the data gathered, a p-value of .001 showed that there was a
difference on the emergency fund allocation of households before and after the
implementation of TRAIN law. It denotes that upon the execution of TRAIN law,
emergency fund of households were reduced to a bit lower amount.
According to Chang, Hanna, and Fan (1997), emergency funds must be
equivalent to two to six months amount of household expenses and it should be liquid.
It is also an amount that can cover the household present needs without sacrificing the
household’s current standard of living. Based on theory, households should
accumulate a reserve of wealth to protect themselves against expected or undesirable
financial risk (Deaton, 1992).
Differences on local economic climate and respondents’ exposure to state-
mandated financial literacy programs influence the status of emergency funds.
Individuals with emergency funds were more likely to the older ones, male, educated,
married, and those who have fewer dependents (Babiarz & Robb, 2013)
Investment. The findings revealed that the total monthly investment of the
50
households ranged from P100.00 to P16,000.00 with a mean and a standard deviation
51
of P343.94 and P1,564.687 before and P299.39 and P1,439.837 after the
Of the participants surveyed, results showed that households who invest
P100.00 to P5,000.00 each month increased by two units while those who spent
P5,001.00 to P10,000.00 for investment lessened by 3 units when TRAIN law was
implemented. However, households who had no investment rose up from 157 to 158
after the execution of TRAIN law. Results revealed that after the employment of TRAIN
law, households reduced their investment to P5,000.00 and below to cope with the
changes.
The outcome suggested that there was a difference on the amount of
investment of households before and after the implementation of TRAIN law with a p-
value of .041. It demonstrate that upon the fulfillment of TRAIN law, there had been a
minimal decrease in the amount of households' investment.
Similar to savings, patterns of investments vary from person to person and
even with the same person during two periods because of different motives. Capital
appreciation, tax planning, diversification, and minimization of risks are examples of
investment motives (Gasti, 2017).
Based on the Consumer Expectation Survey conducted by the Bangko Sentral
ng Pilipinas, 32.7 percent of households keep their money in cooperatives, paluwagan,
other credit loan associations, and as investment such as insurance (Chipongian,
2018).
Retirement fund. In terms of retirement fund, the households’ total monthly
fund ranged from P70.00 to P6,105.00 with a mean of P739.98 and a standard
deviation of P886.348 before the implementation of TRAIN law. However, after the
implementation of TRAIN law, households’ total monthly fund ranged from P70.00 to
P8,000.00 with a mean of P716.73 and a standard deviation of P867.671.
Based on the results, households who set aside P70.00 to P2,000.00 remained
51
to have the highest allocation for retirement fund. In addition, households who set aside
52
P4,001.00 to P6,000.00 dropped from two to one percent. However, households who
allocated P6,001.00 and above climbed up by one percent as TRAIN law was
executed. Thus, the remaining participants had no allocation for retirement. This
manifested that households tend to set aside a minimum amount for retirement fund
even after the execution of TRAIN law.
The findings further confirmed that there was no difference on households’
retirement fund allocation before and after the implementation of TRAIN law with a p-
value of .066. It illustrates the budget for retirement was still found to be similar after
Retirement Pay Law also known as R.A. 7641 in the Philippines dictates the
minimum mandatory retirement benefit that each employer needs to comply with their
employees. This law states that employee upon reaching the age of 60 with at least
five years of service is eligible to a benefit equivalent to “one-half month salary for
every year of service (Mariano, 2016).
Age, education, type, and length of work are the factors that are significantly
related to retirement among men and women (Uccello, 1998). The reality retirement
planning assumes that household’s real spending will decrease incrementally
throughout retirement as they personal needs will also decrease. It states that with
inflation pulling spending needs up, human nature’s tendencies pulling spending back
down (Bernicke, 2005).
In general, results revealed that the implementation of TRAIN law caused a
difference on the amount of household's allocation for savings, investment, and
emergency fund. In contrast, household’s allocation on retirement fund incurred no
difference.
52
53
Effects of TRAIN law on the Financial Stability

of Households in Cavite
This part discusses the effects of TRAIN law on the financial stability of
households. Tables 6 to 9 illustrates the results of the regression analysis showing the
effect of taxes on savings, emergency fund, investment, and retirement fund of
households.
Savings. The regression coefficient of 0.509 signifies the positive effect of
TRAIN law on the financial stability of households with a standard error of 5263.302. It
manifests that changes on financial stability specifically in terms of savings can be
associated with changes on TRAIN law. Moreover, a 0.259 R squared or 25.9 percent
change in savings was caused by taxes and the remaining 74.1 percent might be
caused by other factors. This implies that the execution of TRAIN law caused a highly
significant effect on savings with a corresponding p-value of .000, wherein savings of
households tends to decrease upon the changes occurred on taxes. Furthermore,
Durbin-Watson diagnostic test was done to assess the model fitting with a value of
1.940, which is closer to two indicating that the model is fit to use. Therefore, the model
for savings is:
∆ Savings = .772 + .509TaxAft
Culture and economic environment influences household saving motives that
is why it varies from country to country. Income of workers from rural and urban areas
are different. Urban workers with higher salaries tend to save more compared to rural
area workers. Age of the heads of households affects the saving motives of a
household wherein younger head were more likely to perceive in purchasing more
compared to households headed by older ones. Gender of the heads of households is
another factor affecting the households saving motives. Households headed by female
are more likely to save for daily expenses while male-headed households save for
retirement, children and growth. Life cycle, education and home ownership were also
found to affect household saving motives (Yao, Wang, Weagley & Liao, 2011).
53
54
Table 6. Effects of TRAIN law on savings

STANDARD
VARIABLES β p-value REMARKS
ERROR
Savings .509 5263.302 .000 Reject 𝐻𝑜3

R-squared .259
Adjusted R-squared .257
F-statistic 114.69
Prob (F-statistic) 1.1469
Durbin-Watson 1.940
Emergency fund. Based on the results, a 0.476 regression coefficient conveys
personal taxes’ positive effect on the financial stability specifically in terms of
emergency fund with a 1217.611 standard error after the execution of TRAIN law. In
addition, the results showed that 0.226 R squared or 22.6 percent of the changes in
emergency fund were from the changes in taxes and the remaining 77.4 percent
means that there are other factors that could affect the changes in emergency fund. A
p-value of .000 denotes that taxes caused a highly significant effect on the emergency
fund, hence, upon employment of TRAIN law allotment for emergency fund are found
to decrease. Durbin-Watson diagnostic test was performed to test if the model fits,
recorded a value of 1.899 affirms simple linear regression was fit to determine the
effect of taxes on emergency fund. Therefore, the model for emergency fund is:
∆ Emergency fund = .163 + .476TaxAft
Table 7. Effects of TRAIN law on emergency fund

STANDARD
VARIABLES β p-value REMARKS
ERROR
Emergency fund .476 1217.611 .000 Reject 𝐻𝑜3

R-squared .226
F-statistic 95.99
Prob (F-statistic) .9599
Durbin-Watson 1.899
The increased of households' payment on their monthly bills, minimum
payment on credit cards, utilization of payday loans, and payment on mortgages or
rent will result on a decrease of emergency fund (Brobeck, 2008). The actual
54
55
emergency fund level held by the households is more closely related to the ability to
save than to need for emergency fund (Bi & Montalto, 2004).
Investment. Results revealed that investment had a regression coefficient of
0.470 proclaims a positive effect of TRAIN law on the investment of households. It
implies that changes on investment is associated with changes on taxes as
implemented by TRAIN law. Furthermore, R squared value of 0.221 or 22.1 percent
change in investment can be justified by taxes and the remaining 77.9 percent might
be influenced by other factors. This signifies that taxes is a highly significant predictor
of investment as shown by a p-value of .000, in which a decrease on investment were
observed upon the implementation of TRAIN law. Durbin-Watson diagnostic test was
employed to test if the model fits, a value of 2.057 ascertained that the model was suit
to weigh the effect of changes on financial stability specifically in terms of investment.
Therefore, the model for investment will be:
∆ Investment = .168 + .470TaxAft
According to the study of Ansari and Moid (2013) and East (1993), “Investment
behavior is critical to an individual’s future and that decision may be contingent on
many factors. It has been argued that attitudes among other variables can predict the
investment decision process”. Sociodemographic factors which include socioeconomic
background, educational attainment level, age, race, and sex are the factors that point
the distinction between investors’ investing behavior.
Table 8. Effects of TRAIN law on investment

STANDARD
VARIABLES 𝜷 p – value REMARKS
ERROR
Investment .470 1272.737 .000 Reject 𝐻𝑜3

R-squared .221
F-statistic 93.601
Durbin-Watson 2.057
55
56
Retirement fund. Based on the results, a 0.251 regression coefficient
suggests TRAIN law’s positive effect on the financial stability of households specifically
in terms of retirement fund with a standard error of 841.273. This conveys that a
change in TRAIN law would cause variation on the financial stability in terms of
retirement fund. Results showed that after the implementation of TRAIN law, 0.630 R
squared or 6.30 percent of the change in retirement fund was due to the changes in
taxes and the remaining 93.7 percent was because there are other factors that might
affect the retirement fund of households. Taxes caused a highly significant effect on
retirement fund as demonstrated by a p-value of .000, in such a way that retirement
fund decreased as TRAIN law was implemented. Employing Durbin-Watson diagnostic
test to check if the model fits, a value of 1.954 which is closer to two implies the model
is fit to use. Therefore, the model for retirement fund is:
∆ Retirement fund = .054 + .251TaxAft
Successful retirement was influenced by coping with the change and
psychological preparedness of an individual (Kyule, 2011). According to Mandigma
(2016), “the lower the self-assessed retirement preparedness of Filipinos, the lower
their psychosocial readiness”.
Table 9. Effects of TRAIN law on retirement fund

STANDARD
VARIABLES 𝜷 p - value REMARKS
ERROR
Retirement fund .251 841.723 .000 Reject 𝐻𝑜3

R-squared .063
F-statistic 21.907
Durbin-Watson 1.954
56
57
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS
This chapter presents the summary, conclusions, and the recommendations on
the effect of TRAIN law on the financial stability of households in selected cities in
Cavite.
Summary
This study sought to determine the effect of TRAIN law on the financial stability
of households in selected cities in Cavite. Specifically, it aimed to: (a) describe the
sociodemographic characteristics of the head of households in selected cities in Cavite
in terms of: age, sex, civil status, educational attainment, and employment status; (b)
describe the socioeconomic characteristics of the households in selected cities in
Cavite in terms of: household size, number of dependent, and household income; (c)
compare the household expenditures before and after the implementation of TRAIN
law on: food, rentals, transportations and communication, utilities, education, medical
care, payments of loans, taxes, and recreation and leisure; (d) compare the financial
stability of households before the implementation of TRAIN law in terms of: savings,
investment, emergency fund, and retirement fund; and (e) ascertain the effect of
TRAIN law on financial stability of households.
The study was conducted from August 2018 to May 2019. A total of 330
participants from top four most populous cities in Cavite where obtained using
multistage sampling technique which was composed of purposive sampling, stratified
sampling, and systematic sampling.
A survey questionnaire was used in gathering data. The study used descriptive,
comparative, and causal/explanatory research designs. Descriptive statistical tools
such as percentage, mean, standard deviation, frequency count, and range were used
to describe the sociodemographic, socioeconomic households’ sociodemographic,
socioeconomic characteristics, household expenses, and financial stability out of the

58
total number of sample. Inferential statistical tool like t-test was used to identify the
difference of the household expenditures, TRAIN law and financial stability
determinants before and after the implementation of the new tax reform. Simple linear
regression was used to identify the effect of TRAIN law on the financial stability of
households. Simple linear regression was obtained through the model:
𝑦 = 𝑓(𝛽0 + 𝛽1 𝑋1 )
The study revealed that out of 330 participants, majority of them belonged to
the age bracket of 40 to 49 years old, female (51%), married (70%), high school and
college graduate (43%) and employed in private companies (56%). Majority of the
participants of four to six dependents, zero to three number of dependents (62%) and
P12,501.00 to P22,500.00 of monthly income (41%).
Results showed a significant change on household expenditures after the
implementation of TRAIN. The number of participants who spends less on food
decreased, as well as those who allocate a minimum amount for rentals. Moreover,
households who used least on transportation and communication and on utilities was
also reduced. In addition, those who spends less on education also decreased but with
only one unit, it was otherwise on those who used less on medical care as it increased
by also one unit. Furthermore, participants who allocates a minimum amount for
payment of loans again decreased by one unit. On the other hand, households who
spends least on taxes as well as on recreation and leisure both increased. In general,
participants who used P0 to P5,000.00 on average monthly expenses decreased.
Findings, likewise, showed that households who saved less increased as well
as those who allocate a minimum amount on emergency fund. In addition, participants
who invest less also increased. However, those who allocates least on retirement fund
remains at 96 percent. In general, households who spends P5,000.00 monthly for
financial stability increased after the implementation of TRAIN law.
It was revealed that 25.9 percent of the change in savings, 22.6 percent in
emergency fund, 22.1 percent in investment were caused by changes on personal

59
taxes brought about by the implementation of TRAIN law. The remaining percentage
is caused by other factors not included in the study.
The results showed that Tax Reform for Acceleration and Inclusion Law has a
significant effect on the financial stability of households in selected cities in Cavite.
Through the use of simple linear regression with Durbin-Watson diagnostic test, it
showed the values of 1.940, 1.899, 2.057 and 1.954 for savings, emergency fund,
investment, and retirement fund respectively fits the effects of taxes because the
values are closer to two which means the model is appropriate to use for the study.
Conclusion
Based on the results of the study, the following conclusions are drawn:
Majority of head of the household are 40 to 49 years old, mostly female,
married, high school and college graduate, and employed in private companies. Most
of them belong to the household size of four to six family members with zero to three
dependents and earning a total monthly income of P12,501.00 to P22,500.00.
The results of the study revealed that economic changes affect the cost of
living of head of the households. It was concluded that if there is a change in taxes
including lower personal income tax, expanded value-added tax, and excise tax on
goods and services, there will be also change in financial stability in terms of savings,
emergency fund, investment, and retirement fund.
The Tax Reform for Acceleration and Inclusion (TRAIN) law has a positive
significant effect on the financial stability of households in selected cities in Cavite. It
was concluded that if taxes change, the financial stability of households in terms of
savings, emergency fund, investment, and retirement fund change as well.
Having a higher take home pay does not make them more financially stable
due to the excise tax provided by TRAIN law. Majority of the head of household made
adjustments regarding how they allocate for financial stability such as on their saving,
emergency fund, investment, and retirement fund after the implementation of TRAIN
60
law. This is possibly because they felt that the right thing to do instead of adjusting the
expenditures is to made adjustment on their financial stability.
Upon observations, Filipino households are not yet ready for various economic
changes. Households still lack on financial knowledge, family planning, awareness on
economic changes, and are not yet capable of leading a financially stable family.
Recommendations
The study showed only the effect of Tax Reform for Acceleration and Inclusion
(TRAIN) law on the financial stability of households for the 1st year of its
implementation.
It is therefore recommended that the head of the household prioritize their
financial stability before spending so that they will be able to cope with unforeseen
events; seek assistance to financial adviser in order to properly used finances; be
financially literate; hence, no money will be wasted; and be aware of the changes that
happens in the country.
For the local government units, they should be aware of the effects that come
to every Filipino household every time they implement a new law. There is a need to
conduct a free seminar that may educate every household for the new tax laws and
provide a financial talk to help them regarding the proper ways of saving and spending;
thus, to lessen poverty.
For the companies, they should know how they can help their employees enjoy
and be able to satisfy all the needs using their monthly income. They should provide a
seminar that will educate them on everything they need, seek suggestion on how their
employees will ease the burden caused by the changes affecting them and monitor
the behavior and job performance of employees.
In addition, future researchers are encouraged to conduct a similar study since
it is a longitudinal study that involves repeated observations of the same variables over
short or long period of time. They should try to widen the scope and limitation of the
61
study to test the significance on other factors. Instead of only focusing on heads of the
households try to consider all salaried employees to see and test how the new tax law
(TRAIN law) will affect their saving and spending manner since they are only
compensated in a fixed amount. The researchers also suggest that related studies
should be conducted to answer and clarify things that are not covered in this study.
62
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APPENDICES
(046) 4150-010 / (046) 4150-011

68
Appendix 1. Permit Letters
(046) 4150-010 / (046) 4150-011

69

Indang, Cavite
www. cvsu.edu.ph
January 21, 2019
HON. FERNANDO T. LAUDATO

Barangay Captain
Barangay Langkaan II, Dasmariñas City
Dear Sir:
Good day!
We are fourth year students taking up Bachelor of Science in Business

Management major in Financial Management from College of Economics,
Management and Development Studies in Cavite State University – Main Campus.
Currently, we are conducting Thesis study entitled “Effects of Train Law on the
Financial Stability of Households in Selected Cities in Cavite” as requirement this
semester AY 2018 – 2019.
In connection with this, may we humbly seek permission from your good office
to allow us to gather data for those head of households or household member who have
knowledge regarding their spending and saving matter from your community.
We assured that any gathered information will be treated with utmost
confidentiality and will be used for academic purposes by researchers.
We are looking forward for your approval. Thank you very much.
Respectfully yours,
Approved:
___________________________
___________________________
___________________________
(046) 4150-010 / (046) 4150-011

70

Indang, Cavite
www. cvsu.edu.ph
January 22, 2019
HON. ELEUTERIO A. GUIMBAOLIBOT

Barangay Captain
Barangay Paliparan III, Dasmariñas City
Dear Sir:
Good day!

Respectfully yours,
Approved:
___________________________
___________________________
___________________________
(046) 4150-010 / (046) 4150-011

71

Indang, Cavite
www. cvsu.edu.ph
January 28, 2019
HON. ROLANDO L. PAGKALIWANGAN

Barangay Captain
Barangay Santiago, General Trias City
Dear Sir:
Good day!

Respectfully yours,
(046) 4150-010 / (046) 4150-011

72
(046) 4150-010 / (046) 4150-011

88
Appendix 2. Research Instrument

89

Indang, Cavite
(046) 415-0000/ 415-0011 (046) 415- 0012
E-mail Address: cvsu@asia.com
SURVEY QUESTIONNAIRE
Date: ________________
Code No.: ____________
Questionnaire No.: ____
We are fourth year students of Cavite State University – Indang, Cavite and are
conducting a research study entitled “Effects of Train Law on the Financial
Stability of Households in selected cities in Cavite”. In order to make this study
possible, may we request for your indulgence to participate in the conduct for our
study. We will greatly appreciate your involvement in our research. Any gathered
information will be kept confidential and will be used for academic purposes by
researchers.
Note: The data that will be acquired from this questionnaire will be treated with
utmost confidentiality and will be used for this purpose only.
Instruction: Please fill-out the blanks with needed information and put a check (/)
mark on the space provided.
I. Head of the Household’s Profile
Name (Optional):_____________________________________________
Age: _________
Sex: Female Male
Civil Status:
Single Married Widow
Educational Attainment:
Elementary graduate College graduate Doctorate degree
High School graduate Master’s degree

90
Employment Status:
Type of Employment:
Self-employed
Employed in government agency
Employed in private companies
Others, please specify: ____________________________________
II. Head of the Household’s Socio Economic Profile
1. Household size: _______________
2. Number of dependent(s): ________
3. Amount of income: ____________/month
III. Household’s Expenditures
Items Monthly Amount Monthly Amount
(Before (After Implementation)

Implementation)
Food Php Php
Rentals Php Php
Transportation & Php Php
communication
Utilities Php Php
Education Php Php
Medical care Php Php
Payment of loans Php Php
Taxes Php Php
Recreation and leisure Php Php
91
IV. Household’s Financial Stability
Before the After the

implementaion of TRAIN implementation of
Variables
Law TRAIN Law
(Monthly) (Monthly)
Savings Php Php
Emergency fund Php Php
Investments Php Php
Retirement fund Php Php
______________________________________
SIGNATURE OVER PRINTED NAME
Contact Number (Optional):____________
“HELP IS A FOUR LETTER WORD THAT MEANS SO MUCH TO THE

RESEARCHERS”
-ROSALES, 2019
THANK YOU FOR YOUR TIME AND EFFORT TO SHARE YOUR KNOWLEDGE.
GOD BLESS !
92
Appendix 3. Request for Adviser and Technical Critic

93

Cavite, Philippines
(6346) 4150-010/4150-011/(6346) 4150-012
Website: www.cvsu.edu.ph
Email Adress: cvsu@asia.com
COLLEGE OF ECONOMICS, MANAGEMENT AND

DEVELOPMENT STUDIES
REQUEST FOR ADVISER AND TECHNICAL CRITIC
Name of Students : AURE, KIM GILMORE R., CALO, DONNA MAE S.,
and ROSALES, MA. BIANCA L.
Course : BUSINESS MANAGEMENT
Major : FINANCIAL MANAGEMENT
94
Appendix 4. Title Approval Sheet

95

Cavite, Philippines
(6346) 4150-010/4150-011/(6346) 4150-012

DEVELOPMENT STUDIES
APPROVAL SHEET
(/) TITLE ( ) PROPOSAL
Name of Students : AURE, KIM GILMORE R., CALO, DONNA MAE S.,
and ROSALES, MA. BIANCA L.
Title : INFLUENCE OF TRAIN LAW ON THE FINANCIAL SECURITY OF
Course : BUSINESS MANAGEMENT
Major : FINANCIAL MANAGEMENT
96
Appendix 5. Proposal Approval Sheet

97

Cavite, Philippines
(6346) 4150-010/4150-011/(6346) 4150-012

DEVELOPMENT STUDIES
APPROVAL SHEET
(/) PROPOSAL ( ) MANUSCRIPT
Name of Students : Kim Gilmore Aure, Donna Mae Calo, Ma. Bianca L. Rosales
Title : EFFECTS OF TRAIN LAW ON THE FINANCIAL SECURITY OF
Course : Bachelor of Science in Business Management
Major : Financial Management
98
Appendix 6. Request for Proposal Oral Review

99

Cavite, Philippines
(6346) 4150-010/4150-011/(6346) 4150-012

DEVELOPMENT STUDIES
APPROVAL SHEET
(/) PROPOSAL ( ) MANUSCRIPT
Name of Students : AURE, KIM GILMORE R., CALO, DONNA MAE S., ROSALES, MA. BIANCA L.
Title : INFLUENCE OF TRAIN LAW ON THE FINANCIAL SECURITY

Date of Oral Review : OCTOBER 31, 2018
100
Appendix 7. Request for Manuscript Oral Review

101

Cavite, Philippines
(6346) 4150-010/4150-011/(6346) 4150-012

DEVELOPMENT STUDIES
APPROVAL SHEET
( ) PROPOSAL (/) MANUSCRIPT
Name of Students : AURE, KIM GILMORE R., CALO, DONNA MAE S., ROSALES, MA. BIANCA L.
Title : EFFECTS OF TRAIN LAW ON THE FINANCIAL STABILITY

Date of Oral Review : APRIL 24, 2019, 4:00 PM, GAD OFFICE
102
Appendix 8. Routing Slip

103

Don Severino De Las Alas Campus
Indang, Cavite
(046) 415-0013/ (046) 415-0012
Email: cvsu_op206@gmail.com
COLLEGE OF ECONOMICS, MANAGEMENT

AND DEVELOPMENT STUDIES
ROUTING SLIP
Name of Student(s): Kim Gilmore R. Aure, Donna Mae S. Calo & Ma. Bianca L. Rosales
Type of Study: Thesis Narrative EDP Design Project Case Study Teaching Portfolio
Title of Study: Effects of TRAIN Law on the Financial Stability of Households in
Selected Cities in Cavite
DATE DATE
REMARKS
RECEIVED RELEASED
Thesis Adviser
Technical Critic
Department
Research/OJT
Coordinator
Department Chair
English Critic
College
Research/OJT
Coordinator
Dean
Director for
Research
(for thesis only)
104
Appendix 9. Certificate from Statistician

105
CERTIFICATION
This is to certify thet Kim Gilmore R. Aure, Donna Mae S. Calo, and Ma. Bianca
L. Rosales, Bachelor of Science in Business Management major in Financial
Management students with a study entitled “Effects of TRAIN Law on the Financial
Stability of Households in Selected Cities in Cavite”, had undergone statistical
analysis and interpretation through the Statistical Package for Social Sciences v. 21.0
as facilitatedby the undersigned.
Issued on the 6th of April 2019 in Indang, Cavite upon the request of the
researchers for whatever legal purpose it may serve.
MARY GRACE A. ILAGAN

Statistical Software User
106
Appendix 10. Certificate from the Ethics Review Board

107
108
Appendix 11. Household’s population in the cities of Cavite

109
Households’ population in the cities of Cavite

110
Appendix 12. Statistician data of results

111
Problem 1
Sociodemographic Profile of Households in Cavite
CHARACTERISTIC
(n=330) (%)
Age
20 to 29 50 15.2
30 to 39 82 24.8
40 to 49 89 27.0
50 to 59 79 23.9
60 to 69 25 7.6
70 and above 5 1.5
Range = 20 – 78
Mean = 43.17
CHARACTERISTIC
(n=330) (%)
Sex
Female 169 51
Male 161 49
CHARACTERISTIC
(n=330) (%)
Civil Status
Single 80 24
Married 232 70
Widowed 18 6
CHARACTERISTIC
(n=330) (%)
Educational Attainment
Elementary graduate 43 13
Highschool graduate 142 43
College graduate 142 43
Master’s degree 3 1
Doctorate degree 0 0
CHARACTERISTIC
(n=330) (%)
Employment Status
Self-employed 111 34
Employed in government
14 4
agencies
Employed in private
184 56
companies
Others 21 6
112
Problem 2
Socioeconomic Profile of Households in Cavite
CHARACTERISTIC
(n=330) (%)
Household Size
1 to 3 86 26
4 to 6 186 56
7 to 9 49 15
10 to 12 8 2
13 and above 1 1
Range = 1 – 15
Mean = 4.83
CHARACTERISTIC
(n=330) (%)
No. of dependents
0 6 1.82
1 to 3 207 62.73
4 to 6 104 31.52
7 to 9 11 3.33
10 and above 2 0.61
Range = 0 – 11
Mean = 3.24
CHARACTERISTIC
(n=330) (%)
Monthly Income
2500 to 12500 42 13
12501 to 22500 135 41
22501 to 32500 77 23
32501 to 42500 37 11
42501 to 52500 14 4
52501 to 62500 10 3
62501 to 72500 2 1
72501 to 82500 2 1
82501 to 92500 1 0
92501 to 102500 4 1
102501 to 112500 2 1
112501 and above 4 1
Range = 2500 – 180000
Mean = 27838.42
113
Problem 3
Household Expenditures in Cavite
VARIABLES
(n=330) (%)
Food
1,000 to 6,000 182 116 55.20 35.20
6,001 to 11,000 112 98 33.90 29.70
11,001 to 16,000 30 103 9.10 31.20
16,001 to 21,000 2 8 0.60 2.40
21,001 to 26,000 1 2 0.30 0.60
26,000 and above 3 3 0.90 0.90
Range: 1,000 to 30,000 1,000 to
45,000
Mean: 6993.91 9629.97
VARIABLES
(n=330) (%)
Rentals
0 259 259 78.50 78.50
500 to 2,500 41 34 12.40 10.30
2,501 to 5,000 23 28 7.00 8.50
5,001 and above 7 9 2.10 2.70
Range: 500 to 7,000 500 to 7,000
Mean: 593.33 621.52
VARIABLES
(n=330) (%)
Before After Befor After
e
Transportation and
Communication
0 59 59 17.90 17.90
64 to 10,000 267 264 80.90 80.00
10,001 to 20,000 2 5 0.60 1.50
20,001 to 30,000 1 1 0.30 0.30
30,001 and above 1 1 0.30 0.30
Range: 64 to 40,000 64 to 40,000
Mean: 1608.07 1795.43
114
VARIABLES
(n=330) (%)
Utilities
0 4 4 1.20 1.20
150 to 5,000 320 313 97.00 94.80
5,001 to 10,000 3 9 0.90 2.70
10,001 to 15,000 3 2 0.90 0.60
15,001 and above 0 2 0.00 0.60
Range: 150 to 15,000 150 to 17,000
Mean: 1650.98 1959.45
VARIABLES
(n=330) (%)
Education
0 92 91 27.90 27.60
95 to 10,000 230 230 69.70 69.70
10,001 to 20,000 5 6 1.50 1.80
20,001 to 30,000 1 1 0.30 0.30
30,001 to 40,000 1 1 0.30 0.30
Range: 95 to 45,000 95 to 45,000
Mean: 1936.77 2058.52
VARIABLES
(n=330) (%)
Medical Care
0 185 181 56.10 54.80
80 to 10,000 142 147 43.00 44.50
10,001 to 20,000 2 1 0.60 0.30
20,001 to 30,000 0 0 0.00 0.00
30,001 and above 1 1 0.30 0.30
Range: 80 to 31,500 90 to 31,500
Mean: 906.72 908.79
VARIABLES
(n=330) (%)
Payment of Loans
0 187 180 56.70 54.50
200 to 10,000 131 137 39.70 41.50
10,001 to 20,000 9 9 2.70 2.70
20,001 to 30,000 0 1 0.00 0.30
30,001 to 40,000 2 2 0.60 0.60
40,001 to 50,000 0 0 0.00 0.00
50,001 to 60,000 0 0 0.00 0.00
60,001 and above 1 1 0.30 0.30
Range: 200 to 65,600 200 to 65,600
Mean: 1912.04 2047.08
115
VARIABLES
(n=330) (%)

Taxes
0 102 122 30.90 37.00
17 to 10,000 218 201 66.10 60.90
10,001 to 20,000 5 2 1.50 0.60
20,001 to 30,000 2 2 0.60 0.60
30,001 to 40,000 1 3 0.30 0.90
40,001 and above 2 0 0.60 0.00
Range: 17 to 48,000 21 to 38,000
Mean: 1627.96 968.98
VARIABLES
(n=330) (%)
Recreation and leisure
0 150 138 45.50 41.60
100 to 10,000 174 187 52.70 56.90
10,001 to 20,000 5 2 1.50 0.60
20,001 and above 1 3 0.30 0.90
Range: 100 to 29,000 100 to 19,562
Mean: 1657.44 1761.54
VARIABLES
(n=330) (%)
Average
220 to 5,000 312 310 220 to 5,000 312
5,001 to 10,000 13 15 5,001 to 10,000 13
10,001 and above 5 5 10,001 and above 5
Range: 220 to 13,000 222 to 13,778
Mean: 2098.58 2416.81
VARIABLES t Sig. REMARKS

Food -18.755 .000 Reject 𝐻𝑜1
Rental and Mortgages -2.666 .008 Reject 𝐻𝑜1
Transportation and Reject 𝐻𝑜1
-7.286 .000
Communication
Utilities -10.225 .000 Reject 𝐻𝑜1
Education -3.793 .000 Reject 𝐻𝑜1
Medical Care -.066 .947 Accept 𝐻𝑜1
Payment of Loans -1.380 .169 Accept 𝐻𝑜1
Taxes 8.605 .000 Reject 𝐻𝑜1
Recreation and leisure -1.138 .256 Accept 𝐻𝑜1
*t-test (p-value<0.05 Reject 𝐻0 )
116
Problem 4
Financial Stability of Households in Cavite
VARIABLES
(n=330) (%)
Befor
Before After After
e
Savings
0 37 40 11.20 12.10
80 to 10,000 263 270 79.70 81.80
10,001 to 20,000 16 13 4.80 3.90
20,001 to 30,000 8 2 2.40 0.60
30,001 to 40,000 3 3 0.90 0.90
40,001 to 50,000 1 2 0.30 0.60
50,001 to 60,000 2 0 0.60 0.00
60,001 and above 0 0 0.00 0.00
Range: 80 to 60,000 80 to 50,000
Mean: 5024.33 3520.61
VARIABLES
(n=330) (%)
Emergency Fund
0 66 67 20.00 20.30
75 to 5,000 257 260 77.90 78.80
5,001 and above 7 3 2.10 0.90
Range: 75 to 10,000 75 to 15,000
Mean: 824.28 713.77
VARIABLES
(n=330) (%)
Befor
Before After After
e
Investment
0 157 158 47.60 47.90
100 to 5,000 166 168 50.30 50.90
5,001 to 10,000 5 2 1.50 0.60
10,001 to 15,000 1 1 0.30 0.30
15,001 and above 1 1 0.30 0.30
Range: 100 to 16,000 100 to 16,000
Mean: 343.94 299.39
117
VARIABLES
(n=330) (%)
Retirement Fund
0 77 77 23.30 23.30
1 to 2,000 239 240 72.40 72.80
2,001 to 4,000 7 7 2.10 2.10
4,001 to 6,000 6 3 1.80 0.90
6,001 and above 1 3 0.30 0.90
Range: 70 to 6,015 70 to 8,000
Mean: 739.98 716.73
VARIABLES
(n=330) (%)
Average
0 to 5000 307 320 93 97
5001 to 10000 17 8 5 2
10001 to 15000 5 2 2 1
15001 and
1 0 0 0
above
Range – 0 to 15600
Mean 1778.13 1049.73
Standard Deviation 2233.976 1526.844
Changes in financial stability of households before and after the

implementation of TRAIN Law in Cavite.
STANDARD
VARIABLES MEAN t Sig. REMARKS
DEVIATION
Savings 5024.33 3520.61 7445.018 6105.328 11.401 .000 Reject 𝐻𝑜2
Emergency
824.28 713.77 1528.555 1382.251 3.207 .001 Reject 𝐻𝑜2
Fund
Investment 343.94 299.39 1564.687 1439.837 2.049 .041 Reject 𝐻𝑜2
Retirement
739.98 716.73 886.348 867.671 1.847 .066 Accept 𝐻𝑜2
Fund
Average 1778.13 1049.73 2233.976 1526.844 14.213
*t-test (p-value<0.05 Reject 𝐻0 )
118
Problem 5
Effect of TRAIN Law and Financial Stability of Households in Cavite
Output of regression analysis showing the effect of taxes on savings.
STANDARD
VARIABLES β p – value REMARKS
ERROR
Savings .509 5263.302 .000 Reject 𝐻𝑜3

R-squared .259
Adjusted 𝑅 2 .257
F-statistic 114.687
Output of regression analysis showing the taxes on emergency fund.
STANDARD
VARIABLES β p – value REMARKS
ERROR
Emergency Fund .476 1217.611 .000 Reject 𝐻𝑜3

R-squared .226
F-statistic 95.987
Output of regression analysis showing the effect of taxes on investment.
STANDARD p–
VARIABLES β REMARKS
ERROR value
Investment .470 1272.737 .000 Reject 𝐻𝑜3

R-squared .221
F-statistic 93.601
119
Output of regression analysis showing the effect of taxes on retirement fund.
STANDARD
VARIABLES β p - value REMARKS
ERROR
Retirement Fund .251 841.273 .000 Reject 𝐻𝑜3

R-squared .063
F-statistic 21.907
Output of regression analysis showing the effect of taxes on average financial

stability.
STANDARD
VARIABLES β p - value REMARKS
ERROR
Average .610 1211.288 .000 Reject 𝐻𝑜3

R-squared .373
F-statistic 194.745
120
Appendix 13. Curriculum Vitae

121
KIM GILMORE R. AURE

JULY 08, 1998
04 BONIFACIO STREET, BARANGAY 7,MENDEZ, CAVITE
09059160207
WORK EXPERIENCE
On-the-job Training
Tagaytay Medical Center
Jun 2018 – July 2018
EDUCATIONAL BACKGROUND
Tertiary Education:
Cavite State University- Main Campus
-Bachelor of Science in Business
CAREER OBJECTIVE Management major in Financial
To actively contribute and Management
be part of the growing company -Expected Graduation Date: June 2019
in its excellence and success in Secondary Education:
business and to enhance my Tagaytay-Mendez Academy
skills and knowledge that is 2011-2015
related to my course. -Salutatorian
Elementary Education:
SKILLS Gahitan Elementary School
 Excellent communication skills -1st Honorable Mention
 Proficient in Microsoft Offices -
Word, Power point and Excel. SEMINARS ATTENDED
 Executive team leadership
 Responsible and Time 5th Grand Finance Summit
Management Awakening the Financial Genius in You
 Familiarity in accounting, Cavite State University-Main Campus
financial reporting and analytical March 23, 2019
skills.
4th Grand Finance Summit
CHARACTER REFERENCE Financial Literacy Millenial’s Breakthrough
Ms. Princess Feliciano towards success
09194557985 Cavite State University-Main Campus
Cavite State University April 21, 2018
Instructor
National Finance Summit 2018
Ms. Nicetas Garvida The Power of Financial Inclusions
09260217489 SMX Convention Center
Cavite State University January 13, 2018
Instructor
3rd DLSU-D JFinex Students’ Summit
Ms. Mary Grace Ilagan Financial Fitness
09212637675 De La Salle University-Dasmariñas
Cavite State University November 17, 2017
Instructor
122
DONNA MAE S. CALO

OCTOBER 24, 1998
B11 L6 AUSTRALIA ST. GREENBREEZE BICLATAN, GENERAL TRIAS, CAVITE
09976644177
WORK EXPERIENCE
On-the-job Training
Century Properties Group, Inc.
Jun 2018 – July 2018
Tertiary Education:
2015-2019
CAREER OBJECTIVE -Bachelor of Science in Business
To contribute and be part of the Management major in Financial
growing company in its Management
excellence and success in -Expected Graduation Date: June 2019
business and to enhance my Secondary Education:
skills and knowledge that is Governor Ferrer Memorial Na’ll High
related to my course. School-Biclatan Annex
SKILLS 2011-2015
 Ability to maintain confidentiality -7th Honorable Mention
in handling sensitive -Mathematics Excellence Award
information Elementary Education:
 Analytical Ability Gawaran Elementary School
 Highly Organized 2005-2011
 Interpersonal Skills -3rd Outstanding Student
 Technical Skills (MS Excel,
Word, Powerpoint SEMINARS ATTENDED
CHARACTER REFERENCE Awakening the Financial Genius in You
Ms. Mary Grace Ilagan Cavite State University-Main Campus
09212637675 March 23, 2019
Instructor 4th Grand Finance Summit
Financial Literacy Millenial’s Breakthrough
Ms.Nicetas Garvida towards success
09260217489 Cavite State University-Main Campus
Cavite State University April 21, 2018
Instructor
National Finance Summit 2018
Mr. Robert D. Quiacos The Power of Financial Inclusions
09266426605 SMX Convention Center
Governor Ferrer Memorial January 13, 2018
National High School- Biclatan
Annex 3rd DLSU-D JFinex Students’ Summit
English Teacher Financial Fitness
De La Salle University-Dasmariñas
November 17, 2017
123

FEBRUARY 25, 1997
433 Munting Ilog, Silang, Cavite
09364941972
WORK EXPERIENCE
On-the-job Training
Reliance Producers Cooperative
Jun 2018 – July 2018
Tertiary Education:
2015-2019
CAREER OBJECTIVE -Bachelor of Science in Business
To find an On the Job Training in Management major in Financial
Management
a leading business where I am
-Expected Graduation Date: June 2019
able to relate the knowledge that
Secondary Education:
I gained from the program I am
Munting Ilog National High School
involve and to explore and 2009-2013
become accustomed in different -With Honors
fields through giving the best Elementary Education:
skills and efforts that will Munting Ilog Elementary School
contribute to the organization’s 2003-2009
success. -1st Honorable Mention
SKILLS
 Basic Skills in PC usage SEMINARS ATTENDED
 Knowledge in basic English Awakening the Financial Genius in You
 Good communication skills Cavite State University-Main Campus
 Background in financial March 23, 2019
statements and financial
analysis 4th Grand Finance Summit
Financial Literacy Millenial’s Breakthrough
CHARACTER REFERENCE towards success
Mr. Joel Argete Cavite State University-Main Campus
0927865962 April 21, 2018
Quezon Province
Police Officer National Finance Summit 2018
The Power of Financial Inclusions
Ms. Mary Grace Ilagan SMX Convention Center
09212637675 January 13, 2018
Instructor 3rd DLSU-D JFinex Students’ Summit
Financial Fitness
Mr. Reycel Diongco De La Salle University-Dasmariñas
09971997506 November 17, 2017
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EFFECTS OF TRAIN LAW ON THE FINANCIAL STABILITY

OF HOUSEHOLDS IN SELECTED CITIES IN CAVITE

KIM GILMORE R. AURE

COLLEGE OF ECONOMICS, MANAGEMENT AND DEVELOPMENT STUDIES

Authors: KIM GILMORE R. AURE

Title: EFFECTS OF TRAIN LAW ON THE FINANCIAL STABILITY OF

Nixon Adrian and Julius Limuel. He is currently residing in Mendez, Cavite.

He completed his elementary education at Gahitan Elementary School in 2011

Mendez Academy and completed his secondary education as salutatorian in 2015.

He enrolled in Cavite State University in Indang, Cavite where he took Bachelor

of Science in Accountancy until the second semester of 2015. In 2016, he decided to

pursue Bachelor of Science in Business Management major in Financial Management.

He obtained his degree in June 2019.

is currently residing in Biclatan, General Trias City, Cavite.

She obtained her elementary education at Gawaran Elementary School and

honorable mention in 2015.

decided to pursue Bachelor of Science in Business Management major in Financial

She obtained her degree in June 2019.

She is currently residing in Munting Ilog, Silang, Cavite.

She finished her elementary education at Munting Ilog Elementary School as

In 2015, she pursued college education at Cavite State University in Indang,

2015. In 2016, she decided to pursue Bachelor of Science in Business Management

major in Financial Management and obtained her degree in June 2019.

everlasting support, unconditional kindness and understanding that she provided

throughout the completion of the study;

suggestions, guidance, and support;

suggestions and comments, and approval;

approval of the study;

Dr. Marlon A. Mojica, dean, College of Economics, Management, and

conduct the study;

Mr. Gener T. Cueno, former chairperson of the Department of Management,

and useful comments and suggestions that is beneficial in the study;

All faculty members of the College of Economics, Management, and

help and for being compassionate;

information to complete the study;

endless prayers, and encouragement in all their struggles;

To all of them, this piece of work is wholeheartedly dedicated.

and invaluable contribution in the success of this study:

dreams, understanding, endless support financially, morally and emotionally, patience,

possible if not because of Him.

To all of them, this piece of work is humbly dedicated.

KIM GILMORE R. AURE

the accomplishment of this study:

and support to pursue her dreams;

love, words of encouragement, immeasurable patience and unending support

end of this study;

nonsense dramas, and for a memorable college journey;

her journey begin.

To all of them, this piece of work is humbly dedicated.

DONNA MAE S. CALO

and invaluable contribution in the success of this study:

and patience as well as for the happy moments together;

her journey and for a memorable college experience;

their unconditional love, words of encouragement, understanding, patience and

until the end of this study;

possible if not because of Him.

To all of them, this piece of work is humbly dedicated.

MA. BIANCA L. ROSALES

Filipino households prioritize their expenditures instead of valuing their financial

stability in terms of savings, emergency fund, investment, and retirement fund to

prepare for the future and unforeseen events.

assess the effects of TRAIN Law on the financial stability of households.