Financial Investment

The correlational analysis of the recent study conducted by Oppong et al. (2023),

identified substantial relationships between investment decisions, personal financial

management, and financial literacy among SME employees in Ghana's private sector. The results

demonstrated a strong and positive correlation between financial literacy and personal financial

management, suggesting that higher financial literacy corresponds with enhanced personal

financial management. Additionally, there was a substantial positive correlation observed

between personal financial management and investment decisions, indicating that an enhanced

personal financial management conduces to well-informed and profitable investment selections.

According to Asmara et al. (2020), financial knowledge, financial management behavior,

and personal income positively influence investment decisions among employees of PT. Industri

Jamu dan Farmasi Sido Muncul Tbk. The study concluded that greater financial awareness leads

to more effective investment selections, and that successful financial management approaches,

such as budgeting and saving, had an advantageous effect on investment decisions. Personal

income also plays a considerable influence, as higher salaries encourage more investment.

Interestingly, risk preferences do not significantly alter these effects. This indicates that,

regardless of whether employees are risk-averse or risk-takers, the impact of financial

knowledge, financial management behavior, and personal income on investment decisions is

consistent, emphasizing the universal importance of financial literacy and sound financial

practices.
 The vital role of sustainability in corporate survival is highlighted, particularly an

emphasis on effective resource utilization, competitive resilience, and adaptability (Bolton,

2015). The author emphasized the fundamental connection that exists between profitability and

sustainability, arguing that effective financial investment should provide value on both fronts.

Bolton argues against investments lacking value or sustainability, irrespective of their nature.

Furthermore, it accentuates the importance of understanding the complexities of diverse

investments to be able to assess their costs, benefits and overall value creation capabilities. This

understanding, as the author contended, is essential for aligning investments with long-term

economic and environmental objectives, ensuring both profitability and sustainability are

maximized.

According to Gaikar (2021) previous studies have looked at how different demographic

factors affect the financial choices made by people. Multiple research studies have shown that

age plays a crucial role in investment behavior, as older individuals usually prefer low-risk

options such as insurance and fixed deposits, whereas younger individuals are more inclined

towards higher-risk investments for potentially greater profits. Studies have shown that in

financial decisions, women are typically more risk-averse than men, indicating the role of gender

in this aspect as well. Household income and type of occupation can influence investment

choices, as research indicates that individuals with higher incomes or stable jobs are more

inclined to invest in various financial assets. Increased education levels lead to improved

financial literacy and a deeper grasp of investment choices, resulting in more educated and

varied investment choices. Being married can impact investment choices, as married people are

often more cautious and prioritize long-term financial stability.

 Mamaclay et al. (2021) explored the investment behaviors, choices, and financial

strategies of workers at Wesleyan University-Philippines which identified that in terms of

investments, a majority of participants had money put away for unexpected circumstances and

allocated 1-5% of their earnings towards investing. The predominant investment choice was a

savings account, aiming to invest for over 5 years in the private sector in order to gradually

increase their initial investment. Respondents reported occasionally practicing financial

management in areas such as money management, savings management, and investment

management. Variables such as age, length of employment, job status, earnings, and other

sources of income were found to have a strong relationship with their financial management

behaviors. The research also identified noticeable variances in how the participants evaluated

their financial management methods based on the various factors analyzed. In general, the

findings offer understanding on the investment habits, choices, and financial practices of

university staff in the Philippines

Thulasipriya (2015) asserted that most government workers opt to invest with a long-term

outlook, prioritizing the accumulation of wealth for the future over seeking short-term profits.

The research findings suggest that government workers, who are paid a fixed salary, value safety

and stability more than maximizing returns when making investment choices. They prefer

investment products that are reliable, low-risk, offer tax benefits, and align with their long-term

financial objectives. In general, the investment choices of this group are influenced by a cautious

strategy centered on protecting capital.

Government Investment Programs

According to Zulkifly (2023), collaborative governance promotes cooperation and

proactive participation among different stakeholders, which is essential for the effective

execution of investment programs. In a qualitative descriptive research of Makassar City's

investment initiatives, Zulkifly explored the collaborative governance process through in-depth

interviews, observations, and recording. The findings revealed effective collaboration

characterized by routine face-to-face dialogues, trust built through transparent information

sharing, and joint commitments to roles and functions. Nevertheless, a lack of training for some

human resources hampered effective program execution. Despite this, common knowledge

through joint deliberations aided in circumventing hurdles, resulting in an annual growth in

domestic and foreign investment. These observations have significant implications on the

Modified Pag-IBIG (MP2) savings program and other contemporary government investment

programs in the Philippines. The Philippines can improve the efficacy and appeal of its

investment projects by cultivating comparable collaborative governance approaches, such as

frequent stakeholder discussions and comprehensive training programs, which will also increase

public trust and participation.

The Development of Government Savings Program in PH

Savings initiatives in the Philippines have come a long way in the last several decades;

nowadays it is being spearheaded by the government. Traditionally, these plans were focused on

enhanced economic freedom and financial security within the Filipino nation. To support the

public, the government has provided different saving policies, which includes Pag-IBIG Fund,
and PhilHealth. These initiatives have been important in influencing the change towards saving

within the last decade, especially among the lower income earning groups.

The Home Development Mutual Fund or Pag-IBIG Fund since 1978 provides a form of

savings program and housing loans to its members at affordable terms. Since the Pag-IBIG Fund

requires active employees to contribute monthly and employers to match these contributions, the

fund is continually generating savings that can be utilized by members in their times of financial

difficulties. Research has revealed that this program has been instrumental in enhancing the

homeownership point figures and thus enhancing the standing of many Filipino families.

Another significant governmental savings program is PhilHealth whose primary goal is to

address health insurance concerns. PhilHealth began in 1995 as an effort to establish health

insurance that will help the Filipino people to secure health services. PhilHealth collects

members' contribution and government subsidy and then accumulates it to ensure that it provides

health services for its members. Studies have revealed that, through its efforts and enrolment of

individuals, PhilHealth has significantly contributed to lessening spending on health care related

costs and therefore lessening the burden on families when faced with medical exigencies.

Moreover, the Personal Equity and Retirement Act (PERA) of 2008 was another

development that emerged under the government savings program. As a social investment tool,

PERA aims to put up an avenue for the Filipino people to save for retirement thus providing

facilities attractive tax incentives. This program acts as a complement to the other pensionary

schemes as well as offering another line of Income support to retirees. Sauder et al and others
have done research on PERA and it has provided positive outcomes with increased participation

rate and growth of funds in future years.

Finally, the actual and potential value of government savings programs indicate a

sustained attempt in the Philippines to foster and improve the status of financial intermediation

for the nation’s sustainable economic growth and stability. Such programs help the beneficiaries

financially in the short term and encourage them to develop the spirit of saving and investment in

the long run. When the country advances, more adjustments and developments on the said

savings programs will be necessary for sustaining the changing financial environment of its

people.

MP2 Savings Program

The Modified Pag-IBIG II (MP2) Savings Program refers to a voluntary savings plan

made available by the Philippine Home Development Mutual Fund (Pag-IBIG Fund) which

gives its members an opportunity to invest in a plan that offers more choices and a possible

higher return on investment. The MP2 Savings Program has been in existence since 2010, and its

purpose is to provide richer gross interest in comparison with other concepts of savings or other

instruments available in the financial market. For a complete membership, the MP2 program

allows voluntary monthly contribution of at least PHP 500, but with no ceiling means it is

affordable by almost any income earner. It can be accessed after a fixed five-year period,

availing medium-term saving facility coupled with investment flexibility. Also, it is important to

understand that MP2 dividends are tax-free, making it even more an appealing target for savers

(Pag-IBIG Fund, 2021).

 The MP2 Savings Program has been described by a number of authors and research

papers as a viable instrument of savings. For instance, evidence suggests that the PE Mandates of

the program tend to have comparatively higher interest rates; the program is especially beneficial

to investors who prefer minimal risk associated with the guaranteed returns from government-

supported securities. Moreover, the MP2 program promotes a lock-in effect for its members by

providing incentives for frequent savings over a specified time span. It also ensures the clients’

financial inclusion, especially in case of the marginalized in the BPO or those in the informal

sector or with a volatile income flow as it allows for a simple form of savings. In conclusion, it

can be highlighted that the MP2 Savings Program has been proved as an effective intervention to

increase savings among Filipinos by ensuring accessibility to good savings products and

encouraging the Filipino people to become investors (Pag-IBIG Fund, 2021).

The MP2 Savings Program is also characterized by flexibility and convenient access to

the accounts. Recipients can either contribute on a monthly basis where he or she remits or a

lump sum can be contributed depending on everybody’s ability to save. For this reason, it has

been easy for savers to fund the programme due to its openness in declaring the annual dividend

rates’ basis boost on membership and contribution in the past years. Because of this, the MP2

Savings Program has become an avenue where millions of Filipinos achieve their goal of have a

safe and profitable investment (Rosales, 2021).

In this case, the MP2 Savings Program therefore holds one of its key strengths in the

unique opportunity to participate in a program that is able to go through competitive returns

regardless of volatile market conditions. In most periods of economic instability, the rates of this
program’s interest have remained low due to investments in government securities and high-

quality corporate bonds. Due to this stability the MP2 Savings Program will be of interest to the

more cautious investor who requires the principal to be safe while making reasonable returns

(Alonzo, 2022).

Lastly, the MP2 Savings Program has contributed to the members’ financial education

regarding savings and focused disciplines. The program effectively persuades members to have a

target amount to save at some time that they should reach and an invariably understood savings

discipline by saving monthly. Thus, the MP2 Savings Program enhances the economic

sustainability of its members and adds to the improvement of their financial condition by

providing an easy and secure savings instrument (Bautista, 2023).

Fund Management

According to Dahlquist and Ødegaard (2018), their research analysis evaluates Norges

Bank's management of the Government Pension Fund Global, emphasizing its dual nature as

both a mega index fund and an actively managed fund. The Fund's absolute performance is

highly influenced by the Ministry of Finance benchmark, which resembles a gigantic index fund.

However, active management strategies including factor investing, security selection, and real

estate investments enable it to outperform the benchmark. The Fund's relative performance, as

measured by a 0.20% annual active return after costs, results in significant value added for the

asset owner, driven principally by the equities portfolio. Security selection, rather than market

timing, contributes far more to the Fund's performance, as does the capacity to identify

outperforming external managers. In addition, indexing operations such as asset positioning and

securities lending assist the Fund to reduce costs while generating higher returns.
 According to Contreras et al. (2021) the participants in the research demonstrated a

moderate level of financial literacy, showing they had a fundamental understanding of managing

their own money. They had a pragmatic approach to finances, engaging in activities such as price

comparison and living within their means. When it comes to financial management practices,

most participants saved their money in banks to cover expenses, while others invested in

livestock or businesses. Past studies have highlighted the significance of financial knowledge,

indicating that a deficiency in this area can result in unwise financial choices that harm both

individuals and society. Financial literacy involves grasping fundamental economic and financial

ideas and utilizing that information to effectively handle financial resources. Research has shown

that financial literacy levels can be influenced by factors such as spending habits, age, and

gender. The writers propose a financial management initiative that centers around budgeting,

spending, and saving methods which could enhance the financial and economic security of the

university staff. Gaining insight into the staff's current financial management abilities can help

develop strategies to improve their financial knowledge and practices.

The main results of the study show that financial literacy is a significant factor in

predicting retirement planning, even when adjusting for potential bias in the data. (Lusardi &

Mitchell, 2008) The researchers also discovered that participants have a higher level of financial

literacy if they were taught economics in school and received financial education from

companies. These findings are significant because they emphasize the notable disparities in

economic understanding among people with comparable income and education levels. They also

emphasize the importance of considering these variations in developing financial education

initiatives to promote retirement stability. The article also proposes methods to enhance the

efficiency of these financial education programs.

Challenges and Opportunities of Fund Management in Government Savings Programs

Management of funds in government investment programs is subject to factors of

challenges and opportunities that are central to their achievements and future viabilities. It is

crucial to encourage transparency and accountability in the distribution and use of the funds

which may not be an easy thing since the public needs to be assured of their funds being used

appropriately to avoid fraudulent activities. Moreover, government programs are also subject to

bureaucratic processes and regulatory measures which affect the management of funds and the

timely implementation of the programs. However, these programs also have a great chance to

implement large-scale investments for achieving developmental objectives for countries and

socio-economic progress (Krah & Mertens, 2023).

Another factor is procedures and restrictions regulating such savings programs. These

processes can be time consuming and this affects the proper use of funds where they are needed

most. The bureaucracy may hinder the implementation of the program thereby hampering the

realization of the savings goals formulated in the organization’s strategic plan. Furthermore,

there are some regulations with diverse directives that could be time-consuming, thus demanding

much effort and cash to administer (Lopez, 2021).

Moreover, there are tremendous prospects for huge investments with the help of savings

programs introduced by the government that may significantly impact the government’s

development goals at the national level. These programs therefore bear the potential of
assembling large sums of money that can be channeled towards the development of various

necessities as well as upcoming infrastructure, social services, and economic activities. This

makes government savings programs attractive to contributors particularly because, through

aggregation of funds from many contributors, tasks that may not easily be financed ordinarily

can be implemented (Rodriguez, 2020).

Meanwhile, it is pertinent to note the excessive use of government savings programs in

attainment of socio-economic development. They also act as a way through which people can

plan for their future hence increasing the level of financial freedom. Programs such as the Pag-

IBIG Fund have already honed their capability in enhancing living standards through the

provision of basic livability necessities such as shelter and health services. If well coordinated

and planned, these programs can be scaled up and enhanced to suit the development of the

country’s socio-economic condition (Santiago, 2023).

Savings programs not only have a way of encouraging the desired culture of saving and

financial discipline, but also have the opportunity of mobilizing huge resources needed for

developmental and socio-economic activities at the national level. In the same vein, it is crucial

to face the challenges as presented and harness the opportunities which could bring the most to

our targeted groups of population from the fulfillment of these savings programs in the

Philippines (Dela Cruz, 2019).

Implementation of Savings Programs for Non-Government Employees

Adoption of savings programs among non-government employees working in the

Philippines has been an important process of improving the savings and empowering the
employed population. The purpose of such programs is to have the same advantages as

government employees obtain, including pensions and emergency services, to help equalize the

financial situation (Luna & Reyes, 2020). Regarding such efforts, one of the major ongoing

measures is the endeavor to increase the coverage of the SSS to provide social security

protection to a wider extent of the employed population within the private sector and the self-

employed category.

Furthermore, SSS has assisted tremendously in offering retirement, disability and death

benefits to non-government persons. Thus, through the Employer and Employee contribution to

the SSS, it guarantees an adequate fund accumulation that is accessible especially during their

retirement or emergent conditions. Besides providing cashless coverage, this system fosters the

development of savings’ culture among employees of the private sector. Modernization of the

SSS has also expanded the coverage and pursued the improved aim and goal to provide people

with enhanced benefits (Martinez, 2021).

Another notable savings program for non-government employees is the creation of

micro-savings products targeting group and informal sector earners and SMEs. Thus, these

programs that are implemented through microfinance institutions offer a convenient way to build

up savings by making small systematic contributions. Thus, it has been seen that those who are

beneficiaries of the micro-savings programs have been able to gain better control over their

finances and remain less susceptible to prone impacts of economic downturns (Garcia & Santos,

2019).
 The implementation of private pensions has also been one of the successful aspects of

savings programs for non-governmental employees. What these schemes provide is an extra

source of financial protection every individual can secure their retirement without SSS’s aid.

These plans are also characterized by incentives such as tax privileges and are generally

preferred by both employees and employers. This is evident through the rise of these schemes,

which shows that people are starting to consider long-term savings that will enable them to

achieve their goals (Rivera, 2022).

Finally, advancement has been made, but there is still room for improvement in the

actualization of savings programs for non-government employees. These includes e poor

financial education, reduced access to conventional banking, and economic fluctuations that

hamper the ability of individuals to save often, to which solving them entails the following

approaches, namely: (a) Financial literacy programs; (b) enhanced access to financial

instruments; and (c) policy frameworks that are factual and realistic (Santiago, 2023).

Public Trust

According to Halai (2024), the integration of ethical principles into anti-corruption

programs is of paramount importance in both the corporate and public sectors. The study stresses

the crucial function of senior management in establishing standards of ethical conduct and

influencing lower management levels through their behaviors and integrity. In the United States,

the European Union, and the United Kingdom, codes of ethics have played an important role in

shaping organizational ethics in order to prevent corruption. The study further underlines the

significance of external control processes and confidential reporting in the public sector, as
witnessed in Australia. It also looks at good approaches in Liberia, Kenya, and Georgia, such as

power devolution and the recovery of illicit funds, as well as Estonia's emphasis on incorporating

ethical principles into everyday operations in order to develop a non-corrupt culture from the top

management down.

A study headed by Morshed Chowdhury et al. (2021) determined that improving citizen-

government relations is significantly supported by the development of smart government

services rendered accessible by digital technology. These services provide ease and accessibility

across several devices and places, while also improving people's trust in government

performance. These services not only boost people's trust in government performance, but they

also provide convenience and accessibility from a variety of devices and locations. The study

presents a comprehensive methodology for measuring individuals' trust in smart government

services, considering dimensions like government characteristics, public involvement, and

societal influence. The study, which was conducted in West Java Province, Indonesia, identified

that technical developments, government transparency, and community engagement are

significant variables affecting trust in these services. The findings emphasize the need to build

trust to encourage the adoption and satisfaction of smart government services, having

implications for academia, governments, and service providers.

Schmidthuber et al. (2020) explored how government openness is related to public trust,

suggesting that citizens' ability to influence government systems, also known as democratic

capacity or empowerment, plays a role in mediating this relationship. Government initiatives that

promote transparency and public participation are frequently presented as a method to restore
trust in government. However, the empirical data on the connection between openness and trust

has yielded inconsistent results. The article suggests that the impact of government transparency

on citizen trust depends on the democratic capacity of individuals - their perceived capability to

actively engage in and impact government procedures. By analyzing data from surveys across

different countries, the research discovers that structural openness is typically linked to increased

levels of public trust. Yet, citizens' feeling of democratic empowerment plays a role in partially

mediating this relationship. The authors believe that by prioritizing improving individuals'

beliefs that they have valuable chances for political involvement, governments will experience a

rise in public trust due to open government changes.

The Public Expenditure and Financial Accountability (PEFA) framework is emphasized

by (Bajo et al., 2017) as a valuable tool for evaluating and documenting PFM strengths and

weaknesses. These evaluations have been useful in pinpointing issues and improving PFM

performance in local government entities. The paper's final thoughts suggest that employing

PEFA can enhance accountability in public service delivery and boost trust among citizens in

local government administrative institutions. In general, the analysis highlights how analytical

tools help to enhance financial management, transparency, and accountability in government

operations.

Tanny & Al-Hossienie (2019) investigated the elements influencing trust and distrust in

government among the public. It starts by pointing out that distrust in governments has emerged

as a worrying worldwide pattern in the past few decades. The objective of the paper is to offer a

comprehensible explanation of trust in government and the factors contributing to both trust and
distrust. The article states that nations with colonial pasts frequently received corrupt,

hierarchical bureaucracies which led to a general lack of trust in governmental institutions. The

paper suggests that a certain amount of public distrust is important for accountability, but too

much distrust in government functioning is an issue that needs policy interventions to restore

trust and promote good governance. The implications indicate that there is a necessity for

policies to tackle the underlying reasons for mistrust to enhance government effectiveness and

citizen adherence.

Synthesis

The studies presented in the document highlight various aspects of financial investment,

government savings programs, and fund management, each providing unique insights and

findings. Oppong et al. (2023) and Asmara et al. (2020) both emphasize the crucial role of

financial literacy in investment decisions, with the former focusing on SME employees in Ghana

and the latter on employees of PT. Industri Jamu dan Farmasi Sido Muncul Tbk. They both

conclude that higher financial literacy leads to better personal financial management and more

effective investment decisions. Mamaclay et al. (2021) explore investment behaviors among

university staff in the Philippines, finding that financial management behaviors are influenced by

factors such as age, employment length, and income sources. Meanwhile, Thulasipriya (2015)

and Gaikar (2021) discuss demographic factors affecting investment choices, highlighting the

preferences for low-risk investments among older individuals and government workers, and the

role of gender, income, and education in shaping investment behavior. The studies on

government savings programs, such as Zulkifly (2023) and the development of the Pag-IBIG

Fund and PhilHealth, underscore the importance of collaborative governance and the positive

impact of these programs on financial security and economic stability.

 Additionally, the MP2 Savings Program is praised for its flexibility, tax-free dividends,

and its role in promoting financial inclusion and stability among its members. Contreras et al.

(2021) and Dahlquist and Ødegaard (2018) provide insights into fund management, emphasizing

the importance of financial literacy and effective management strategies for achieving better

financial outcomes. Collectively, these studies underline the significance of financial education,

collaborative governance, and well-managed savings programs in enhancing financial stability

and investment efficacy.

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