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Chapter 1

THE PROBLEM AND ITS SCOPE

Rationale

Most of the people have struggled with financial problems in some unspecified

time. However, this research study would be necessary for them due to the fact that

people’s spending habits are significantly affected by COVID-19 pandemic. Many

humans have suffered in this situation that could lead to depression and especially

hunger. Money performs a common function to live on any circumstances like buying

luxuries, essentials, and foods. People mainly use cash in their everyday lives such as

shopping for necessities.

The COVID-19 pandemic, otherwise known as the coronavirus pandemic, is a

current global pandemic of coronavirus disease 2019 (Zoumpourlis et al., 2020). This

presented novel virus was first identified from an outbreak in the Chinese city of Wuhan

in December 2019, and attempts to contain it, therefore, has failed, allowing it to spread

across or the entire globe and started the physical distancing, wearing mask, quarantine,

and lockdown.

In the Philippines, COVID-19 pandemic had a significant impact on employees.

A majority of employees reported their job was suspended, hours and pay reduced, or

they were forced to take unpaid leave. Only 37% of employees could report that COVID-

19 had no impact on their job. A total of 6 out of 10 families lost income (). The

lockdown and quarantine policies have been implemented by many nations to minimize

the spread of this disease and bring it under control (Meo et al., 2020). The lockdown

includes isolation at homes, travel restrictions, and termination of all public events.
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Modern lockdown strategies have been enforced all over the world in order to prevent the

COVID-19 infection from spreading even further. Therefore, buying necessities outside

the house is hard.

The Spending habits or spending behaviors is defined as a conduct and manner

that influences a man that utilize, save, and budget their money to fulfill their needs and

needs with no utilization of control (D’Silva, 2008). Additionally, Spending is not only

the key nodes of individual consumption activities or events, but it is also an important

factor that gradually affects the economic development and growth.

When stressful about money before, the mental fitness is affected in unique

approaches too. Anxiety about money can reason to sleep badly or to have anxiety or

panic over everyday actions, like opening payments to their home. They might also begin

to feel remoted and may additionally separate from their household or buddies if they

sense they don’t have money to be a part of them for things to do (Loconti, 2021).

COVID-19 pandemic result in a disruption in the lifestyle and buying pattern of a

consumer and adversely impact the global economy (Verma & Naveen, 2021). Consumer

purchase of country’s own brand and the products manufactured in their own country

plays a vital role in the GDP of that country and help in revival of the country’s economy.

Some previous studies have found that consumers may increase preventive

spendings for dealing with impacts of unexpected emergencies (Drèze& Modigliani,

1972). According to a classical theory regarding uncertain conditions known as the

“preventive saving hypothesis”, people can assume that the COVID-19 pandemic will

decrease the consumer’s spending behavior.

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The employees have much affected by the COVID-19 pandemic. More likely job

loss or decrease in salary. The employment loss affects depression has struggled to

address potential endogeneity bias caused by reverse causality (Posel et al., 2021). The

COVID-19 pandemic offers a unique natural experiment because the source of

unemployment is very likely to be exogenous to the individual. This assessed the effect

of job loss and job furlough on the mental health of individuals.

The researchers devoted this study on the effect of COVID-19 Pandemic to the

spending habits of private sector employees in Marawi City. In such observation and

belief contribute to the reason why the researchers became interested to know if those

employees, who faced and affected during COVID-19, changed their spending habits and

how does it exactly affect their daily lives.

Statement of the Problem

This study aimed to assess the effect COVID-19 Pandemic to their spending

habits among selected employees from private sectors in Marawi city. Specifically, it

sought to the following questions: The socio-demographic profile in terms of sex and

income; the effect of COVID-19 pandemic when they tend to spend their expenses on

their personal needs, work purposes, foods, and transportation; and their significance

difference.

1) What is the socio-demographic profile of the employees in terms of:

1.1 Sex, and

1.2 Income?
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2) What is the effect of COVID-19 pandemic when employees spend their expenses

on their:

2.1 Personal needs,

2.2 Work purposes,

2.3 Food, and

2.4 Transportation?

3) Is there a significant difference between the effect of COVID-19 pandemic when

employees tend to spend their expenses and the socio-demographic profile

variables?

Null Hypothesis

The null hypothesis was tested at 0.05 level of significance:

Ho: There is no significant difference between the effect of COVID-19 pandemic when

employees tend to spend their expenses and the socio-demographic profile variables?

Theoretical Framework

To concretize the foundation and basis of this study, the researchers presented the

different theories that served as support of the study. The following are underpinning

theory, consumer theory, social learning theory. These theories provide theoretical lenses

as well as some designs to support the effect of COVID-19 pandemic to the private sector

employees’ spending habits.

In consumer theory, this was used on how people decide to spend their money

based on their own preferences and budget limits (Liberto, 2020). Therefore, there is a
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connection between this theory and the income of the respondents. This shows how those

employees make their choices, subject to how much income they have available to spend

to the given expenses which can also differ and affect their lives during COVID-19

pandemic.

The social learning theory in this study brings an explanation of the impacts of

sex on financial attitudes and habits. Sex influences the behavior of males and females

differently because they are brought up and socialize with their parents in different ways

(Hare-Mustin & Marecek, 1990). Social learning may this differ because of sex, more

importantly, individuals may socialize differently regarding money and financial habits,

depending on their gender. This theory shall give explanation to sex from the socio-

demographic profile of the respondents and provides a good support to see why sex is

connected to the spending habits during this COVID-19 pandemic.

In underpinning theory, it is anchored on the Social Cognitive Theory by Albert

Bandura (1977) which proposes that people are driven not by inner forces, but by the

external factors. This model suggests that human functioning can be explained by a

triadic interaction of behavior, personal and environment factors. This theory will be

beneficial in analyzing and interpreting the difference of the spending habits given which

are the personal needs, work purpose, food, and transportation and the socio-demographic

profile variables (sex and income).

In conclusion, the consumer theory explains how income affects the spending

habits of employees during COVID-19 pandemic. The social learning theory will

investigate and support how sex can be based on how and what actions do they do to
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spend during COVID-19 pandemic. And lastly, underpinning theory will analyze and

explain the difference of spending habits of the respondents to their sex and income.

Conceptual Framework

This study involved the investigation of the impacts of the independent variables

on the dependent variable. The independent variable is the socio-demographic profile of

the employees in terms of sex and income. The dependent variable established is their

expenses.

Independent Variable Dependent Variable

Socio-demographic profile Expenses spent for:

in terms of:
 Personal needs
 Sex  Work purpose
 Income  Food
 Transportation

Figure 1. Research Paradigm

In Figure 1, it encompasses everything from the spending habits. It shows the

relationship between the socio-demographic profile and expenses spent by the

employees. Their spending habits refers to the way a person used to pay money for

things, the things one spent money for and how much one is used to spent, known as

expenses.
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The flow of how the independent variable affect the dependent variables is shown

in Figure 1. The arrow pointing at each other shows that the socio-demographic profile in

terms sex and income can affect the following expenses, which are the dependent

variable in terms of personal needs, work purpose, food, and transportation, will affect

the spending habits of the respondents.

Significance of the Study

The research study was focused on the significance of different point of views

of the users below:

Employees. As the researchers’ respondents are from the sectors private

employees, this would give them an idea, explanation, understanding, and can be

relatable as an employee. Employees will be the main source of the study’s finding and

conclusion.

Parents. This study should also be significant to the parents in this study because

mostly they are the providers and managers of finances in the family. It is relatable to the

spending habits of employees during this COVID-19 pandemic.

Students. The study would give some necessary details to them about the effect

of COVID-19 pandemic which they can use in their future living since weekly they spend

their money for transportation, necessities, school payment, etc.

Teachers. The teachers would recognize the spending habits of COVID-19

through this study since they are also employees who regularly pay for food,

transportation, classroom necessities, and essential needs.

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Researchers. This study would enable the researchers to understand the effect on

how the COVID-19 affects the employees’ spending habits. The study itself was

significant to them, not only, it was required for us to conduct but also it gives us the

awareness and a chance to inform the users of the research.

Future Researchers. This study can be useful and source of the future

researchers’ references that can support their research study related to spending habits

during COVID-19 pandemic.

Scope and Delimitation

This study was all about the effect of COVID-19 pandemic to the spending habits

employees from private sectors in Marawi City. It sought to find its effects using the

questions such as personal information (name (optional), sex, and income) and how

employees tend to spend on their expenses in personal needs, work purposes, foods, and

transportation, and then finding the significant difference between the two questions

mentioned.

The respondents were private sector employees, and the researchers

accommodated at least sixty (60) respondents for answering the survey questionnaire

provided in order to succeed the study. The researchers surveyed ten (10) respondents per

mentioned six (6) private sectors which are coming from different parts of Marawi city,

which are specifically in RC-AKIC SHS and AMIL-C, the two (2) chosen private school,

and Midtown Hospital and Salaam Hospital, also chosen as the two (2) private hospital

located in Basak Malutlut and Papandayan, respectively. The other two (2) private
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organization is from Mindanao Dynamic Culture of Peace (MIDCOP) and N’ditarun

Tano from Lilod Saduc and Mindanao State University (MSU), respectively.

The respondents were given a survey questionnaire about the study before they

retrieve the given request letter if they have a vacant time to answer the survey

questionnaire. The researchers waited patiently until they are done answering and after

that, they started their one-on-one interview and chose at least six (6) employees coming

from the different sectors. They extended their gratitude towards the respondents after the

interview. The study was conducted in the school year 2021-2022 in RC-Alkhwarizmi

International College Foundation Incorporated Senior High School.

Definition of terms

To clarify the meaning of some terms to be used in this study, certain significant

terms are conceptually and operationally defined, that is as they are used in this study.

COVID-19 Pandemic. It is also known as the coronavirus pandemic, a current

global pandemic of coronavirus disease 2019 (Zoumpourlis et al., 2020). In this study,

this will be the main topic on what is the effect of this COVID-19 pandemic to the

spending habits of the said employees.

Gender. It refers to the socially constructed characteristics of women and men,

such as norms, roles, and relationships of and between groups of women and men

(Branisa et. al, 2009). In this study, Gender is used for the respondents’ identity whether

male, female, or others in which it can affect and depend on their gender to their spending

habits.
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Habit. It is the small decisions people make and actions they perform every day

(Clear, 2002). In this study, habit is specifically on spending during COVID-19 pandemic

that will help to find the effect of COVID-19 pandemic which may differ and be

compared before and now.

Income. It is generally meaning the value or the amount that they receive from

labor and products (Scott, 2022). As part of this study, it is one of the variables of socio-

demographic profile and used for checking if the consumer theory will result to the point

of how much they earned is how much they spend.

Private Sector. It is the part of the economy that is run by individuals and

companies for profit and is not state controlled (Brock et. al, 2020). In this study, the

researchers’ respondents are employees which coming from the private sectors or non-

government sectors.

Spending Habit. It is the way people used to paying money for things, the things

you spent money for and how much you are used to spent (Kirkham, 2022). In this study,

Spending habits is used to know the effect of COVID-19 and how does it affect in

employees’ lives like how they spent their money on expenses.

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Chapter 2

REVIEWS OF RELATED LITERATURE AND STUDIES

This chapter presented the related literature and studies previously conducted

which may have substantial bearing on the present study regarding the effect of COVID-

19 to the spending habits of selected private sector employees.

Related Literature

The reviewed related literature includes topics on the effect of COVID-19

pandemic to their spending habits among selected employees private sectors in Marawi

city which are presented thematically.

Sex and Spending Behavior

Both sex and spending behavior showed that spending habits between male and

female employees had low level of financial literacy and they had low level of financial

literacy and they had tight spending habits (Andriani & Nugraha 2018). This literature

assumes that male and female employees did not have appropriate knowledge to manage

their financial especially in managing investment and loan. This result in increasingly

tight spending which caused they still have to deal with the monthly instalment payment

in the long run. Since males and females are raised differently by their parents (Thorne,

2003), sex roles may affection how they work and spending behaviours.

Effect of New Normal Buying Behaviors

Consumers buy is changing due to the COVID-19 outbreak. Consumer priorities

have become centered on the most basic needs, sending demands for hygiene, cleaning
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and staples products soaring, while non-essential categories slump (Wright & Blackburn,

2020). The factors that influence brand decisions are also changing as a “buy local” trend

accelerates. Digital commerce has also seen a boost as new consumers migrate online for

grocery shopping – a rise that is likely to be sustained post-outbreak. In times like these,

people need essentials of life takes precedence (Wright & Blackburn, 2020).

It comes as no surprise that personal health is the top priority for the consumers

like needing food and medical security, financial security and personal safety were other

leading priorities. This new and everlasting shopping habits in this outbreak has pushed

consumers out of their normal routines. Consumers are adapting new habits and

behaviors that many anticipate will continue in the long terms (Wright & Blackburn,

2020).

Economic Crisis brought by Pandemic

This COVID-19 outbreak affected the economy of the world, specifically the

Philippines. It brought a long-term negative consequence leading to increased family

conflict, abuse, suicidality, and substance abuse (Fegert et. al., 2020). Access to mental

health services is needed to cope with the increased demand in times of economic

recession. Reports are indicating a decline of people using medical services like

emergency services for fear of being by COVID-19.

Consequently, during the crisis there might be a sudden surge of activity to a

magnitude possibly overwhelming the capacity of specific services that may greatly

affect their money consumption and their source of money may decrease. During the

acute phase of the pandemic victims of domestic violence and child maltreatment may
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not be noticed due to lack of social control by peers and staff in school and reduced

accessibility of support services from hospitals. In phase three, due to less parental

control and more contact to others, some children and adolescents may confide incidents

during the pandemic to others (Fegert et. al., 2020).

The role of previous traumatization and other environmental and individual

factors on stress regulation and coping can give meaningful insights on stress resilience

research. The effects of the current situation on adverse childhood experiences should be

assessed. This includes both household dysfunctions such as mental health or substance

abuse of parents, and domestic violence and child maltreatment (Fegert et. al., 2020).

Effects of Financial Stress on Health

There are many more important things on life than money, when struggling

financially fear and stress can take over person’s world (Robinson & Smith, 2021). It can

damage the self-esteem, feeling flawed, and fill with a sense of despair. When financial

stress becomes overwhelming on mind, body, and social life can pay a heavy price.

(Robinson & Smith, 2021)

As COVID-19 outbreak arrived and wake up the whole world, several studies

have demonstrated a cyclical link between financial worries and mental health problems

such as depression, anxiety, and substance. Financial problems adversely impact the

mental health as the stress of debt or other financial issues leaves the person feeling

depressed or anxious. Same as declining the mental health that makes it harder to manage

money, and difficulties managing money that leads to more financial problems and

worsening mental health problems, and so on. No matter how bleak the situation may
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seem now, there is a way out. These strategies can help to break the cycle, ease the stress

of money problems, and find stability again (Robinson & Smith, 2021).

Related Studies

The related studies are presented thematically to provide readers with the

sequence of information regarding the past research studies and their finding that support

and contrast the finding of this study.

Sex and Spending Behavior

In a study conducted by Hayhoe et. al (2000), the results show that there is a

strong influence of sex in spending behavior or habits. A great deal is put into the issue

whether the females spend their money more compared to males and vice versa. Females

tend to spend on appearance goods like clothing while males spend for electronics,

entertainment, and food. Females were also found to exhibit more financial practices like

keeping a written budget, planning spending, and saving regularly.

This result was somehow contradicted by Roberts (2000), who claimed that

females are more likely to exhibit spending behaviors, particularly compulsive buying

compared to mean. It was supported by De Guzman (2011) who found out that female

tend to spend huge amount of money on food while male have different kind of priorities.

Male students also spend more on recreation and females spent more on materials

outspending males by 15% (Bailey, 2009).

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Effect of New Normal Buying Behaviors

According to the authors Parson & Vancic (2020), The result of their study

suggests that the buying behavior in a regard to price sensitivity and perceived quality of

meat, fruits, vegetables has changed during COVID-19 pandemic. No moderating effect

of residency was found.

The findings in the study create a foundation in a unique crisis that has never been

studied before and the exploratory nature of the study gives multiple indicators for future

research. In previous research, it has been found that price and quality are two of the most

influential factors in the consumer decision-process increased price sensitivity in this

crisis.

Economic Crisis brought by Pandemic

This study results to develop a conceptual framework linking the pandemic to

individual economic problems, unemployment, mental health, and behavior change. The

conceptual analysis article explores mechanisms (i.e., economic distress and employment

distress) that lead to the deterioration of individuals’ mental health (Lu & Lin, 2021).

The proposed conceptual framework explains how the COVID-19 pandemic and

public health interventions affect people’s mental health, The findings of most studies

support this mechanism from the onset of the pandemic to the emergence of economic

distress and employment distress, to the deterioration of mental health, and then to

changes in people’s behavior (Lu & Lin, 2021).

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Effects of Financial Stress on Health

According to Lim, Heckman, Letkiewicz, & Montalto (2014), there paper seeks

financial help refers to the professional personal financial help. This study utilized data

from the 2010 Ohio Student Financial Wellness Survey (OSFWS). The survey response

rate was 17.1% resulting in 5,729 respondents. Information was collected on

demographics, financial behavior, financial support, financial stress, financial

socialization, other priorities, and perception of debt. After eliminating observation with

missing values on key variables, a sample of 4,713 respondents was used in the analysis.

The study uses the descriptive as to the results. In about two out of five

respondents (18.5%) reported to have met with a financial counselor or advisor, 27.2%

reported to have met with a credit counselor concerning their finances. For the

multivariate analysis, a series of logistic regressions were conducted. All analysis were

conducted using SPSS 20 for windows. The researchers found that male students are less

likely picky than female students to seek financial help, therefore, females tend to buy

much more than males because males are consistent and technically buy what is

important in their lifestyle and that causes the findings by Joo & Grable (2001).

To summary the use of the mentioned related literatures to process this study, the

first literature shows results show on how sex can differently contribute to the spending

habits of a person when it comes this outbreak. The second one is how COVID-19 really

affect the consumption of human and greatly changed their consuming behavior. The

third literature is about the changed economy during COVID-19 have been consequently

brought a negative effect towards humanity in the world. Lastly, the effects of financial
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stress due to COVID-19 that leads to a symptom in which affects the mental health,

harder to manage money, difficulties about money, and so on.

In conclusion to the related studies provided, it was used to support the basis of

this study. The first study gave a data and a reference where we can obtain the financial

behaviors of employees regarding financial literacy and spending habits based on sex.

The second study helped focusing to what extent buying behavior has changed during

COVID-19 pandemic due to consumers price sensitivity and concern for perceived

quality in their buying decision. The third study investigatedon the spending behaviors of

the employees knowing one of the challenges people counters especially economic crisis

is how they control the way they spent. The last study identified the factor how those

employees seek financial help due to financial stress and how do their self-efficacy affect

them.
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Chapter 3

RESEARCH METHODOLOGY

This chapter discussed the research methodology used in the study. This includes

the discussion of the research design, locale of the study, sampling procedure of the

study, data gathering procedures, the research instruments and statistical treatment of

data.

Research Design

This study utilized a descriptive design research to find the effect of COVID-19

pandemic to the spending habits of employees from selected private sectors in Marawi

city.

Descriptive research design was used to determine how those employees during

COVID-19 pandemic spend their expenses in the perspective of the study. Through this,

the researchers will be able to gain better understanding of the topic. In this way, the

researchers and its readers will gain understanding of the subject matter and be able to

measure and generalize the data collected.

Research Setting

This study has been conducted in the Islamic City of Marawi, the 4 th class

component city and the capital of the province of Lanao Del Sur, Philippines. People

from Marawi are referred to as the Maranaos and they speak the Maranao language. The

sixty (60) respondents were from RC-AKIC Senior High School and Midtown Hospital

located at Basak Malutlut, Marawi City, AMIL-C and Salaam Hospital are both located

in Papandayan, Marawi City, Mindanao Dynamic Culture of Peace (MIDCOP) located in

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Lilod Saduc, and N’ditarun Tano located in Mindanao State University. The Figure 2

shows the map where Marawi City is located with the established places where the

respondents’ locations are.

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Figure 2. Map of Marawi City

Sample and Sampling Procedure

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To accomplish this study, the researchers used the cluster sampling method to

gather the respondents of the study. Cluster sampling is a type of probability sampling

which involves randomly selecting intact groups, not individuals within the defined

population sharing similar characteristics there were sixty (60) respondents consists of

eighteen (17) males and forty-two (43) females in total from different private sectors

which are the two private schools with nine (8) males and eleven (12) females, two

private hospitals with three (3) males and seventeen (17) females, and two private

organization with six (6) males and fourteen (14) females.

Data Gathering Procedures

To collect the essential data for this study, the data gathering procedure was

divided into three phases: pre-intervention, intervention, and post-intervention. This

included the actions necessary for compiling the study’s findings. Each phase was

meticulously carried out.

Pre-Intervention Phase. The pre-intervention phase was devoted to the

development, revision, and validation of research tools such as the Spending Habits

During Covid-19 Questionnaire and understandable interview questions which is

connected to this study. To assess the scope and depth of the study, the researchers

analyzed Covid-19 articles, past pandemic articles, and unpublished theses and

dissertations. The questionnaire was then presented to the researcher adviser and the

panelists for revisions, comments, suggestions, and face and content validation.
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Permission to perform the study was obtained prior to the intervention from the

research adviser to utilize employees from private sectors as a study sample. The

researchers got permission via a written letter describing the goal of the intervention, the

duration of the study, and the researchers’ intended use of the data.

Intervention Phase. Following the approval of the request, the Spending Habits

during COVID-19 questionnaire were administered to all study participants in March

2022 and the process of surveying starts. The researchers gave the questionnaires to the

respondents and answered it in their vacant time to avoid inconvenience to the

employees’ works. The researchers gave enough time to the selected sixty (60)

employees from the private sectors for them to answer the questions properly. The chosen

six (6) employees from the total selected employees were chosen to be interviewed after

answering the survey. The researchers also provided time for them to answer during the

one-on-one interview.

Post-Intervention Phase. Following the intervention, study participants

completed the Spending Habits During Covid-19 Questionnaire. Following the survey,

the six (6) chosen employees was interviewed to ascertain their perspectives on their

spending behaviors since the onset of the pandemic Covid-19. To validate the data

acquired throughout the intervention, employees’ responses were recorded and

transcribed. The statistician acquired, analyzed, and interpreted all the data.
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Research Instrument

Survey questionnaires and interview guide were the instruments that are used to

develop and succeed the research study about the effect of COVID-19 pandemic to the

selected employees’ spending habits

Survey Questionnaires

Modified questionnaires were utilized for determining the effects of COVID-19

pandemic among selected employees from private sectors in Marawi City. These

questionnaires provided are the tool to statistically know the range of how people

perceive the questions. The researchers will follow the general design of another

instrument but substantially add items and/or reasonably changes the content of each item

to establish an understandable and conveyable survey questionnaire.

Interview Guide

One-on-one interview served as a guide instrument for survey questionnaire

provided in order to gather the data and mainly support their answers based on the survey

questionnaire provided. The chosen respondents were six (6) in total to answer some

questions. The one-on-one interview helped to identify the insight among selected

employees on how the effect of COVID-19 pandemic challenges their spending habits.

The researcher gave the respondents a period to answer all the questions and the

researchers has noted all the answers of the respondents and waited them patiently until

they finished conveying their answers.

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Statistical Treatment of Data

The following were used to calculate statistically the data gathered through survey

questionnaire as follow: Frequency Distribution, Weighted Mean, Standard Deviation,

and Pearson Correlation.

Frequency Distribution was used to determine the socio-demographic profile

and the effect of Covid-19 pandemic on how employees spent on their expenses through

each entry in the table contains frequency and the values displayed in terms of their sex

and income, and personal needs, work purposes, foods, and transportation.

Weighted Mean was used to investigate the effect of COVID-19 pandemic on

how they spend their expenses on personal needs, work purposes, foods, and

transportation. It will give some data to contribute by multiplying the probability to the

sum of all products together.

Standard Deviation was be used also to identify the effect of COVID-19

pandemic on how the respondents tend to spend their expenses. Standard deviation is

measured of how the data is in relation to the appropriate mean.

Chi-square test was used in the study to determine if there is a significance

between sex coming from the socio-demographic profile provided by the respondents and

their spending habits on expenses during COVID-19 pandemic.

Pearson Correlation Coefficient (r) was also used to find out if there is a

significance between income from the provided socio-demographic profile of the

respondents and their spending habits on expenses during COVID-19 pandemic.