See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/341424109

Development and Validation of Financial Literacy Test Among Filipino

Learners

Research · November 2018

CITATIONS READS

0 5,002

4 authors, including:

Ma. Jhoeleanne Ejercito Adriano Kacey Baylen Dalida

National University- Nazareth School, Philippines National University, Philippines
2 PUBLICATIONS   0 CITATIONS    1 PUBLICATION   0 CITATIONS   

SEE PROFILE SEE PROFILE

Vanessa Grace De Leon

2 PUBLICATIONS   0 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

A Collection of the Folk Literature of Dumagats: Exploring Cultural Identity and Practices View project

All content following this page was uploaded by Ma. Jhoeleanne Ejercito Adriano on 16 May 2020.

The user has requested enhancement of the downloaded file.

 Development and Validation of Financial Literacy Test
Among Filipino Learners
Ma. Jhoeleanne ADRIANOa, Kacey Jomar DALIDAb, and Vanessa Grace DE LEONc
a
Student at National University
b
Student at National University
c
Student at National University

ABSTRACT
Introduction: In the recent world, financial literacy is essential. The developing economy
demands humans to be financially literate especially in an early age. However, Asian
Development Bank investigated that Philippines do not have a national strategy for financial
education. In this descriptive quantitative study, the researchers developed and validated a
financial literacy test based on the financial literacy competencies made by Bangko Sentral ng
Pilipinas and DepEd integrated in the Philippine Elementary Learning Competencies to
determine the financial literacy of the learners and know whether the competencies they took is
sufficient to give them financial knowledge. After analysing the data, the financial literacy test
appeared to acquire a high content and face validation. The researchers consequently conclude
that the financial literacy test was reliable using the Kuder-Richardson Formula 20. However,
after the test administration, it appeared that the financial literacy competencies taken by the
learners are insufficient to give them financial knowledge.

KEYWORDS
financial literacy; competency; fraud; debt; demands.

1. INTRODUCTION
Today, Filipinos need to be more practical in almost everything. One big aspect to be capable
of having a worth-living life is through finances. Financial literacy involves an individual’s ability to
interpret and understand basic financial concepts and apply that knowledge to make smart decisions.
Financial literacy is more than a measure of knowledge - it also reflects competency in actively
managing one’s own money.
Six out of ten Filipinos plan on how they would spend their money and budget whatever they
have left after paying for bills unlike the 42% who do not plan their spending according to the survey
made last February 2014. Thus, this unproductive habit must be changed. Bangko Sentral ng Pilipinas
believes that saving as a habit can best be developed among school children who also wield influence
in their homes and communities (Tetangco, Jr. 2009. Cited by Reyes, M.).
In the recent world, financial literacy is essential. It is important that the young generation is
financially aware to avoid potential fraud and avoid huge amount of debt. Studies show that people
who are more financially literate are 10-15% wealthier than the average. Being aware of money
management and savings can equip young people with knowledge to fight fraud and take good care
of their finances, Tschache (2009). This is an age of unaccustomed debt and students are destined to
face arduous time financially. It is mandatory that educators begin to train students with the knowledge
and skills to succeed as consumers in today’s global economy.
Berti et. al., (1993) affirms that children develop understanding of economic and financial
concepts as they progress through successive developmental stages. Elementary school age children
can grasp basic economic concepts and according to scholars, they suggest that they can understand
concepts at a very young age, perhaps as young as four to six years.
Asian Development Bank’s investigated that Philippines do not have a national strategy or
financial literacy program for financial education. Due to this, Republic Act 10679 was established
which aims to promote entrepreneurship and financial education among Filipino youth. Under the bill,
Department of Education is encouraged to assess and revise the high school economics curriculum to
ensure that economic and financial education becomes an integral part of formal learning.
In a recent study, Reyes (2011) stated that as part of the monetary authorities’ effort to help
create a new generation of “Financially literate Filipinos” starting with the schoolchildren, the Bangko
Sentral ng Pilipinas launched a financial education program complementing classroom teaching on
savings and money management with activities initiated by the banking sector. Also, in line with this
program, the BSP approved in January 2004 the creation of the BSP Consumer Education Committee.
 Adriano, M.J. et al. - Development and Validation of Financial Literacy Test Among Filipino Learners

The Committee initially addressed the basic financial literacy needs of consumers of financial
products and services. Reyes also expatiated that this involves familiarizing the public on the various
banking products and services that they usually encounter in ordinary financial transactions. The basic
component of the Program is the incorporation/integration of lessons on money, money management,
saving, and basic economics in the Philippine Elementary Learning Competencies (PELC). Through
this, children will be educated by the fundamental principles about starting a business, earning money,
spending it wisely, and saving and investing. It underwent seven phases to critically distinguish the
competencies to be included.in the integration process of the Financial Literacy Program.
Hence, the researchers conclude that despite the importance of financial literacy in students,
less attention is still given to this matter. This caught the researcher’s attention to develop a valid and
reliable financial literacy test and use it to know the financial literacy of grade six pupils.
In this study, the researchers will develop and validate a financial literacy test to be able to
determine the financial literacy of grade six students and know whether the competencies they took
are sufficient to give them financial knowledge.

2. METHODOLOGY
The study is a quantitative research which involves quantifying relationships between
variables. In quantitative, the aim is to determine the relationship between one thing, an independent
variable, and another, a dependent outcome variable in a population. Quantitative research design is
either descriptive or experimental method Hopkins (2000).
The main research instrument of the study was a 70-item multiple-choice type of test with
four options for each item. In this type, there is less chance of guessing on the part of the examinees
since there are four options on each item.
The study was conducted in three different schools namely; Sta. Ana Elementary School
located in Taytay, Rizal, Antipolo Immaculate Conception School located in Antipolo City, Rizal,
and Eulogio Amang Rodriguez Sr. Elementary School, located in Quezon City.
As illustrated in the diagram (Figure 1), the researchers used the following competencies
made by Bangko Sentral ng Pilipinas and Department of Education in creating the financial literacy
test. These competencies are in the teaching guide module integrated with the Philippine Elementary
Learning Competencies.
The relationships of the four areas to each other are presented through arrows. Before the
pupils can understand complicated lessons in financial literacy, such as saving and basic economics
related to saving, they have to understand first the areas of money and money management.
Before the test construction, table of specification was made. The test items underwent
content validation index, were administered three times and undertook item analysis to assure its
validity and reliability.
Finally, after developing the financial literacy test, it was administered to Grade 6 pupils to
know how financially literate they are and whether the competencies they took are sufficient to give
them financial knowledge.

In order to treat the gathered data, the researchers used the following statistical analysis:

1. Difficulty index- It is a measure of the proportion of examinees who answered the item
correctly; for this reason, it is frequently called the p-value. As the proportion of examinees
that got the item right, the p-value might more properly be called the item easiness index,
rather than the item difficulty. It can range between 0.0 and 1.0, with a higher value indicating
that a greater proportion of examinees responded to the item correctly, and it was thus an
easier item.

𝐻+𝐿
𝑃=
𝑇

2. Discrimination index- is a measure of how well an item is able to distinguish between

examinees who are knowledgeable and those who are not, or between masters and non-
masters. This statistic looks at the relationship between an examinee's performance on the
given item (correct or incorrect) and the examinee's score on the overall test. In addition,
discrimination index separates bright pupils from the poor one.

𝐻−𝐿
𝐷. 𝐼 =
27%

3. Kuder-Richardson 20- is used for items that have varying difficulty. For example, some items
might be very easy, others more challenging. It should only be used if there is a correct
 Adriano, M.J. et al. - Development and Validation of Financial Literacy Test Among Filipino Learners

answer for each question — it shouldn’t be used for questions with partial credit is possible
or for scales like the Likert Scale.

𝑘 ∑𝑝 ∗ 𝑞
[ − 1] ∗ [1 − ]
𝑘 𝑉𝑎𝑟

4. Mean- is used to find out the average scores of each grade 6 pupils based on their scores in
the financial literacy test.
∑𝑥
𝑥̅ =
𝑁

BANGKO SENTRAL NG PILIPINAS DEPARTMENT OF EDUCATION

FINANCIAL LITERACY COMPETENCIES FOR ELEMENTARY PUPILS

MONEY
1.History of Money
2.Currency Familiarization
3.Importance of Coins
4.Taking Care of our Money

MONEY MANAGEMENT
1.Income and Expenses
2. Budgeting

SAVING
1.Different ways of saving
2.Saving at the Bank
3.Saving for the future

BASIC ECONOMICS
RELATED TO SAVINGS
1.Entrepreneurship
2.Consumer Rights
3.Credit and Loans
4.Investments

FINANCIAL LITERACY TEST FOR

GRADE 6 PUPILS

FINANCIAL LITERACY OF GRADE 6

PUPILS

Figure 1
CONCEPTUAL FRAMEWORK
 Adriano, M.J. et al. - Development and Validation of Financial Literacy Test Among Filipino Learners

3. RESULTS AND DISCUSSION

3.1 Research Question: What are the indices of difficulty and discrimination of each of the test
items/problem situation?
Table 1.1 Distribution of difficulty index of the financial literacy test

Index of Difficulty f % Interpretation

Less than or equal to 0.25 9 14.06% Very Difficult
Greater than 0.25, Less than 29 45.31% Difficult
or equal to 0.5
Greater than 0.5, Less than or 20 31.25% Moderate
equal to 0.75
Greater than 0.75, less than 1 6 9.38% Easy
Equal to 1 0 0 Very Easy
Total: 64 100%

Table 1.1 presents the distribution of difficulty index of the financial literacy test
items/problem situations. It shows that almost half of the test items were observed to be difficult which
comprises of 45.31%. Secondly, 31.25% were moderate test items while 14.06% were very difficult
items. On the other hand, no items were regarded as very easy while 9.38% of the items were
considered as easy items. It means that most of the test items/ problem situations’ difficulty index are
difficult for the students.

Table 1.2 Distribution of discrimination index of the financial literacy test

Discrimination Index f % Interpretation

Below 0.20 25 39.06% Poor
Above 0.21 39 60.94% Good
Total: 64 100

Table 1.2 shows the distribution of discrimination index of the financial literacy test items
items/problem situations. It shows that only 25 items/problem situations in the financial literacy test
landed on discrimination index of below 0.20. Meaning, it has poor discriminating power which
comprise of only 39.06% of the whole test. On the other hand, 39 of the items/problem situations in
the financial literacy test have a discriminating index above 0.21 which means that 60.94% of the test
has a good discriminating power.

3.2 Research Question: How valid and reliable is the instrument?

3.2.1 Validity

Aside from creating the table of specification in aligning the test items in
the learning competencies, in creating the test, the researches ensured the content
validity of the financial literacy items by asking five experts who have
comprehensive skills in the field of test construction and financial literacy items.
The experts gave judgmental review of the financial literacy test items for
objectivity, clarity, preciseness of directions and appropriateness of vocabulary.
Table 2 shows the content validation index distribution of the financial
literacy test items/problem situations. 99% of the items in the test appeared to be
relevant which means it falls from 80%-100% content validity index. However,
there is a remaining 1% test idem that is not relevant that falls from 60% below
content validity index, more specifically, Item number 3 in the learning competency
“History of Money”.
Therefore, the financial literacy is with objectivity, clarity, preciseness of
direction and appropriateness of vocabulary, making the content validation and face
validation high. The test items turned out to be valid after administrating the test
three times in different schools and underwent item analysis every after the finished
test in every schools. The data gathered were analyzed using the statistical
treatments that were assessed using the Kuder-Richardson Formula 20.
 Adriano, M.J. et al. - Development and Validation of Financial Literacy Test Among Filipino Learners

Table 2 Distribution of content validation index

Content Validation Index %

Relevant 99.00%
Not Relevant 1.00%
Total: 100.00%

3.2.2 Reliability
Table 3 Reliability of the Financial Literacy Test

k ∑pq KR20 Interpretation k ∑pq

HIGHLY
64 12.96 91.87 0.87 RELIABLE 64 12.96

Table 3 shows the internal consistency of the financial literacy test

items/problem situations. In the table, it presents that k or the number of items is
64, the summation of the proportion who passed and failed is 12.96, the computed
variance is 91.87, and lastly, the obtained reliability coefficient was 0.87 using
Kuder-Richardson Formula 20 which concludes that the financial literacy test is
reliable and has a high degree of consistency. Therefore, it determines that the
reliability of the test is very high.

3.3 Research Question : How financially literate are the grade 6 pupils?

Table 3 Financial Literacy of Grade 6 Pupils

Level of Filipino Financial Frequency %
Literacy
Extremely Low Financial 2 3.33
Literacy
Low Financial Literacy 14 23.33
Moderate Financial Literacy 43 71.67
High Financial Literacy 1 1.67
Extremely High Financial 0 0
Literacy
60 100%

Table 3 shows the level of financial literacy of Grade 6 pupils. It shows that most of the
students, which comprise of 71.67% of the population, have only acquired Moderate Financial
Literacy after taking up the financial literacy competencies integrated in the Philippine Elementary
Learning Competencies. Also, it was concluded that only 1 student have acquired High Financial
Literacy and no student have attained Extremely High Financial Literacy. Therefore, it can be implied
that the financial literacy competencies they took are insufficient to give them financial knowledge.

4. CONCLUSIONS
After gathering and analysing the data, the financial literacy test appeared to acquire objectivity,
clarity, preciseness in direction and appropriateness in vocabulary, which means that the content validation and
face validation is high. Moreover, the researchers consequently conclude that the developed 60-item multiple-
choice financial literacy test was reliable and valid. In addition, it was concluded that only 1 student have
acquired High Financial Literacy and no student have attained Extremely High Financial Literacy. Therefore,
the financial literacy competencies they took are insufficient to give the students financial knowledge.

5. RECOMMENDATIONS
On the basis of the findings and conclusions drawn from the study, a recommendation was given.
Since Philippines do not have a national strategy or financial literacy program for financial education,
Department of Education must start to assess and revise the curriculum. Financial education program must
become an integral part of formal learning and must be implemented.
Also, it is advised that in future studies, future researchers must continuously seek for the study’s
improvement. They must still consider the items that are low or are poor for the development of good
psychometric properties in order to ensure effective, valid and reliable assessment of financial literacy.
Lastly, having undergone this study, efforts were suggested, necessitating coordination and
collaboration between different stakeholders: teachers, teacher trainers, administrative staff, examination
bodies and government towards improved and effective teaching of financial literacy as well as improvement
of the development of valid and reliable tests items.
 Adriano, M.J. et al. - Development and Validation of Financial Literacy Test Among Filipino Learners

6. ACKNOWLEDGMENTS
The following are whom the researchers would like to extend their deepest gratitude and appreciation
for helping them in conducting this study: first, it is with deepest gratitude to Mr. Minard Reyes, for allowing
the researchers to use his study as the basis of their research and for his undying support for the present
researchers. To Mr. Louie R. Espinosa, Mrs. Abigail Hilario, Mrs. Jackielou C. Gonzaga, and Mrs. May Ann
B. Enoc, for helping the researchers validate the financial literacy test items. Also, to Mr. Dondon Buensuceso,
their research adviser, for his efforts to teach, improve and for guiding them towards the improvement of their
research study. Lastly, to Mrs. Reyna J. Nasol, the principal of Sta. Ana Elementary School, Mrs. Anacoreta
R. Villegas, the principal of Antipolo Immaculate Concepcion and Mrs. Jocelyn A. Lopez, the principal of
Eulogio Amang Rodriguez who approved to use grade 6 pupils to become their subject of the study in their
research.

REFERENCES

Adriaan S. Kalwij, R. A. (2017). The effects of financial education on financial literacy and savings behavior.
Discussion Paper Series, 17(05).

Dolphin, T. (2012). Young people and savings; A route to improved financial resilience. Institute for Public
Policy Research.

Leonor, N. F. (1983, August). Construction and validation of a readiness test on sIgned numbers in algebra.
The Philippine Journal of Education, LX(3).

Lewis Mandell, P. (2008). The financial literacy of young american adults. University of Washington and the
Aspen .

Michael E. Hanna, R. R. (2010). School of study and financial literacy. Journal of Economics and Economic
Education Research, 11(3), 29-37.

Mohd Samsuri Ghazali, I. A. (2017). Personal Financial Literacy among High School Students in Raub
Pahang, Malaysia. Journal of Engineering and Applied Science, 12(9).

Opoku, A. (2015). Financial Literacy Among High School Students; Evidence from Ghana. Ghana.

Reyes, M. T. (2011). Financial Literacy Test for Grade Six Pupils. Philippine Normal University.

Stocklein, J. E. (n.d.). How to make an Item Analysis of an Objective. Bullet in Classroom Teaching.

Tschache, C. A. (2009). Importance of Financial Literacy and Financial Literacy Content in the Curriculum.
Bozeman, Montana.

View publication stats