‘Mayabang’ or ‘mahirap’?

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona found himself under fierce attack on social media for his remark that we Filipinos are “mayabang” in a recent Senate hearing. He was referring to our “consumption culture” that has made our country’s national saving rate the lowest in the Association of Southeast Asian Nations (Asean), which has been a long-standing fundamental weakness of the Philippine economy. But I know he couldn’t possibly have been alluding to the many among us whose incomes are so low that they couldn’t provide even for basic needs. I could tell that he had in mind the Discayas among us who would collect and proudly show off dozens of luxury vehicles (with illicitly obtained money at that) or Filipino travelers abroad whose idea of tourism is visiting shopping malls and factory outlets—certainly not the wageworker who must spend his/her income even before earning it. We see this in the “vale” system, where a worker asks for an advance on his/her wage well before payday, a practice quite common in the Filipino workplace. Employees also commonly borrow from informal lenders off incomes they have yet to earn.

Are Filipinos indeed spendthrifts compared to other Southeast Asians? The numbers say it all. In 2025, domestic savings in the Philippines were 19 percent of our gross domestic product (GDP), which measures total income in the economy. Compare that to 22 percent for Malaysia, 25.1 percent for Thailand, 30.5 percent for Indonesia, and 37 percent for Vietnam. In fact, over the past 45 years, our saving rate averaged 19.7 percent annually, while Vietnam, Indonesia, Thailand, and Malaysia had 22.7, 25.8, 28.3 and 30.9 percent, respectively.

Why is that bad? It’s because domestic savings primarily fund investments in the country, which in turn provide the capacity to produce more, and thereby generate more jobs and incomes. These savings don’t only come from us consumers. There are three general groups of savers in an economy: households or ordinary consumers, business enterprises, and the government. As for the last, persistently large public sector deficits mean large negative savings, making the government a noncontributor to national savings. Even then, our private saving is still truly low relative to the region.

Last year, household consumption spending comprised 76.4 percent of our GDP, the largest in Asean. Among our neighbors, it ranged from 61.6 percent in Malaysia to only 29.3 percent in Brunei, averaging 50 percent. It’s true when people say that the Philippine economy is driven by consumption. We see it in how some of the biggest shopping malls around the world are in our own country. And remittances from overseas have always been seen to be a prominent driver of this consumption spending, equivalent to 8.3 percent of our GDP in 2024, according to BSP. But rather than fuel savings, studies have shown that remittances are mostly spent on daily household consumption, education, housing construction, health care, debt repayment, and consumer durables—not savings.

The problem, it seems, is that the majority of Filipinos have too little income to even think about saving, much less do it. Some argue that even they save, but in ways different from how most think of it. There is in fact great potential even in poor communities for saving. Think of the estimated P250 million collected daily (about P90 billion yearly) through jueteng, the illegal numbers game that preys primarily on low-income communities. That’s gambling, of course, not saving, but money that could have been saved nonetheless. Researchers have documented how poor families stock up on specific commodities—not necessarily durables like jewelry or appliances, but even just storable groceries—and then sell these off in times of need for cash. That is saving. Our day housekeeper in Los Baños used to keep a pig tied up in her backyard, fattening it with whatever kitchen refuse she could collect from neighbors. She then cashed in on it in June, in time for her kids’ school expenses, a fairly common practice especially in rural areas. That is saving. And then there are the paluwagan schemes one seems to find in every poor neighborhood, especially among the women. Again, that is saving.

But yes, the minority who can save the usual way tend to save much less than their counterparts in Asean and elsewhere do. For many of them, it may be rooted in a family history of poverty, and they tend to make up for it with excessive consumption when they manage to achieve higher income status (the so-called “nouveau riche syndrome”). I’ve heard friends in the United States observe how Pinoys there love to buy the flashiest cars in the neighborhood, sometimes even beyond their means.

This is the segment Remolona rightly describes as “mayabang.” Unfortunately, the poor also felt alluded to even if the good BSP Governor surely never meant it.

cielito.habito@gmail.com