Sun Life pioneers study on financial literacy The Filipinos are an optimistic race. Amidst the recent stock market dip, there is widespread confidence about the country’s economic outlook. But are Filipinos prepared to face fluctuations and seize opportunities? Are they ready for the Brighter Life? For the past five years, Sun Life has been conducting a nationwide Study of Lifestyles, Attitudes and Relationships (SOLAR) to gain insights on the public’s attitudes and behavior toward financial matters. This research has been instrumental in helping Sun Life pursue its thrust to raise financial literacy among Filipinos. (C) 2013 Sun Life Financial Philippines

3. Table of contents
04
05
09
Introduction
Section 01
Of Optimism and the Filipinos
Section 02
The Financial Literacy Paradox
SOLAR FLARe 2013
Sun Life of Canada Philippines, Inc.
EDITORIAL BOARD:
Mylene Lopa
Joub Miradora
Mariquit Lintag
CREATIVE CONSULTANT: Don Peji
MANAGING EDITOR:
Jerik Gonzales
ILLUSTRATION,
DESIGN, AND LAYOUT:
Lex Murillo
WRITER:
Reyna Tabbada
CONTRIBUTOR:
Aila Marie Peñaflor
RESEARCH PARTNER:
GfK Custom Research Pte. Ltd.
2 | SOLAR FLARe
17
23
32
Section 03
Of Priorities and Preparations
Section 04
Towards the Brighter Side
About the company
Sun Life Financial - Philippines

4. Message from the President and CEO
RIZA MANTARING
Rooted in Sun Life Financial’s belief in ‘action powered by insight,’ Sun Life has been
conducting a periodic and proprietary personal finance research called Study of Lifestyles,
Attitudes, and Relationships (SOLAR). For five years, SOLAR has allowed us to gain a better
understanding of Filipinos’ attitudes and behavior when it comes to financial matters.
And for 2013, SOLAR paid special attention to the financial literacy and behavior of
Filipinos. Its findings are presented in a report called FLARe, which stands for Financial
Literacy Advocacy Report. It looked into their knowledge of basic financial concepts,
their financial worries and aspirations, including their attitudes and outlook toward life
insurance.
The report showed us many interesting insights. For instance, Filipinos seem confident in
their knowledge of money matters but, in fact, lack knowledge of basic financial concepts
and how to properly prepare for their future needs. These findings strengthened Sun Life’s
resolve to continue, expand and enhance its financial literacy campaign. As we present
the relevant data to the Insurance Commission, we are expressing our desire for both the
government and the private sector to join hands and take action towards helping Filipinos
face a bigger and brighter future.

5. Respondents
Introduction
demographic profile
Sun Life Financial has been conducting a Study of Lifestyles,
Attitudes, and Relationships (SOLAR) for the last five years. This
research provides pertinent information about the ever-changing
customer landscape, especially as it relates to personal finance.
41 %
30 %
AGE
23 - 35
36 - 45
46 - 55
For 2013, SOLAR added a special section on financial literacy
with the following objectives:
29 %
8%
SEC*
AB
C1
C2
38 %
54 %
MARITAL STATUS
72 %
SINGLE WITHOUT
DEPENDENTS
SINGLE WITH
DEPENDENTS
SINGLE PARENTS
WITH DEPENDENTS
MARRIED WITHOUT
DEPENDENTS
MARRIED WITH
DEPENDENTS
Accomplished during the first quarter, SOLAR has a sample size of
1,100 respondents from North Luzon, South Luzon, the National
Capital Region, Visayas, and Mindanao.
6%
12 %
6%
4%
32 %
36 %
WORKING STATUS
WORKING
OWNS BUSINESS
FREELANCER
NOT WORKING
1. Measure the level of awareness and knowledge of basic
financial concepts and products and the capacity to
apply such concepts (e.g. inflation, interest)
2. Identify trends in financial behavior
3. Identify attitudes and outlook towards life insurance
Respondents for this year’s SOLAR were males and females,
from 23-55 years old, from ABC households*. Their status may
be: single / married without kids / married with kids / married
with parents as dependents / married with kids and parents as
dependents / single parents with dependents.
They must also be the decision-makers for purchase of financial
products, and could be owners or non-owners of life insurance
policies.
For its sampling design, SOLAR used multi-stage sampling for C2
households while implementing purposive sampling for ABC1
households.
7%
25 %
16 %
LIFE INSURANCE
OWNERSHIP
OWNERS
NON-OWNERS
For its study design, respondents underwent face-to-face
interviews and a 16-question basic financial literacy quiz. The
average length of the interview was around 90 minutes. The
format of the quiz was a mix of multiple choice and matching
type. It was graded based on the percentage of correct answers
versus the 16 questions.
84 %
4 | SOLAR FLARe
*Socioeconomic Class Monthly Household Income
AB: Above PhP100,000 - Metro Manila
Above PhP 70,000 - outside Metro Manila
C1: PhP50,001 to PhP100,000
C2: PhP30,001 to PhP50,000

6. 1
OF OPTIMISM
AND THE FILIPINOS

7. Section 01
OF OPTIMISM
AND THE FILIPINOS
Filipinos carry the trademark of being an optimistic race.
In the Study of Lifestyles, Attitudes, and Relationships (SOLAR), this optimism shows in
their outlook on the economy and their personal finances. When asked how they expect
their financial situation to change in the next three to five years, 87% expressed positive
feelings. Filipinos are actually looking forward to a more prosperous future.
How Optimistic is the Filipino?
2011
2013
(% of respondents who expressed positive feelings on financial situation)
83 %
87 %
87 %
76 %
67 %
66 %
46 %
A YEAR AGO
6 | SOLAR FLARe
49 %
CURRENT
A YEAR FROM NOW
THREE TO FIVE YEARS
FROM NOW

8. A closer look on how optimistic the Filipinos are today
44 %
43 %
29 %
28 %
20 %
22 %
5%
6%
1%
How do you feel about your
financial situation today?
How has it changed
compared to a year ago?
45 %
60 %
38 %
27 %
16 %
12 %
1%
How do you expect your financial situation
to change in the next year?
How do you expect your financial situation
to change in the next three to five years?
Very positive
Quite positive
Average
Not very positive
Not positive at all
Optimism about one’s financial situation is a probable outcome of the robust fiscal
growth. The Philippines is moving up, at a time when other countries are reeling from
weak economies, political backlash and widespread unemployment.
Clearly, Filipinos have a lot to look forward to. But how this translates to reality is the
question. And this must be asked: can their optimism translate to a better life?
SOLAR FLARe | 7

9. WHAT KEEPS “JUAN” UP AT NIGHT?
Juan dela Cruz may be optimistic, but personal worries such as health and his children’s
education keep him from a good night’s sleep. What other things is he worried about?

10. 2
THE FINANCIAL
LITERACY PARADOX

11. Section 02
THE FINANCIAL
LITERACY PARADOX
According to the World Bank, financial literacy encompasses “concepts ranging from
financial awareness and knowledge, including financial products, institutions, and
concepts; financial skills, such as the ability to calculate compound interest payments; and
financial capability more generally, in terms of money management and financial planning.
In practice, however, these notions frequently overlap1.” It empowers individuals with “the
capability to navigate a complex array of financial products and to make sound financial
decisions2.”
According to the same World Bank report, financial literacy and the need for financial
planning have been highlighted by the recent financial crisis and the shift of retirement
planning from public sector to individuals3.
This need is also true in the Philippines, which is why major financial services companies
now banner their own financial literacy campaigns. This is a big improvement from only
four years ago when the first sustainable and multimedia financial literacy advocacy called
It’s Time! was launched by Sun Life Philippines and was just gaining ground.
1
“Financial Literacy Around the World”, The World Bank, June 2012
2&3
10 | SOLAR FLARe
ibid.

12. As financial education
becomes more available,
how are Filipinos faring in
managing their finances?

13. Section 02
THE FINANCIAL
LITERACY PARADOX
When it comes to money matters, 20% claim to be an expert. Some even go to the extent as
to consider themselves specialists. Since their self-assessment could be highly subjective,
SOLAR administered a basic financial literacy quiz to validate their claims. Here is where
the paradox lies. While many claim to be experts and specialists in money matters, only
8% scored above 80% in the quiz.
Sample questions from financial literacy quiz:
Financial literacy ratings and scores
Self perception on financial literacy level
Which of the following statements is false about inflation?
A.
B.
C.
D.
E.
Expert
Between novice and expert
Novice
Higher inflation means higher prices of consumer goods
Purchasing power is lower if inflation is high
As inflation rises, every peso will buy a fewer amount of goods.
None of the above
All of the above
Which of the following can be considered an investment?
A.
B.
C.
D.
E.
Stocks
Taxes
Revenue
All of the above
None of the above
If a savings account has an annual interest rate of 2%,
how much will a P 100,000.00 deposit earn after a year?
A.
B.
C.
D.
20 %
46 %
34 %
P 2.00
P 20.00
P 2,000.00
P 20,000.00
When it comes to money matters, I consider myself...
12 | SOLAR FLARe

14. Respondents’
Quiz Scores
7%
8%
2%
8%
13 %
Note: No one got a score of 91 and above
81 - 90
71 - 80
61 - 70
51 - 60
41 - 50
31 - 40
21 - 30
11 - 20
0 - 10
17 %
17 %
Score Per
Financial Concept
9%
Correct answer
Wrong answer
INVESTMENT
78 %
ANNUAL INTEREST RATE
77 %
23 %
CREDIT CARD
76 %
21 %
22 %
24 %
ASSET
75 %
LIFE INSURANCE
73 %
25 %
27 %
REAL ESTATE
67 %
33 %
DEBT
66 %
34 %
SAVINGS ACCOUNT
54 %
51 %
CURRENT ACCOUNT
45 %
STOCKS
43 %
LOAN
41 %
MUTUAL FUND
INFLATION
HEALTHY BUDGET
BOND
27 %
73 %
26 %
74 %
23 %
77 %
Answers to sample questions
49 %
47 %
PRE-NEED PLAN
46 %
53 %
55 %
57 %
59 %
Which of the following statements is false about inflation?
D.
None of the above
Which of the following can be considered an investment?
B.
Stocks
If a savings account has an annual interest rate of 2%,
how much will a P 100,000.00 deposit earn after a year?
C.
P 2,000.00
SOLAR FLARe | 13

15. Section 02
THE FINANCIAL
LITERACY PARADOX
In fact, when respondents are asked how they define financial security, the top answer is “having
enough bank savings.” Putting one’s savings in a bank account remains prevalent, and such an
approach reveals how Filipinos prepare, or “under-prepare”, for tomorrow. One’s money is intact
in a bank account, but with so little growth, or even negative real growth, that there is doubt if
it can ensure one’s financial security.
14 | SOLAR FLARe

16. Filipinos must be encouraged to learn the basics
of proper financial planning and explore a wider
array of financial instruments to help them
achieve their goals and aspirations.
As the tagline of Sun Life’s “It’s Time!”
advocacy says, “know your needs,
be informed, take action.”

17. THE TYPICAL ONE-MONTH BUDGET
When Juan dela Cruz opens his wallet, where does he put his hard-earned money? After
spending on life’s basic necessities – food, rent, utilities – he allots 6% to his bank account,
which can be surmised as savings. And perhaps after five years, his insurance policy may
get a 1% share of the budget.

18. 3
OF PRIORITIES
AND PREPARATIONS

19. Section 03
OF PRIORITIES
AND PREPARATIONS
When asked about what they would prioritize spending money on for the next two years,
life insurance figures in the list along with educational plans and health insurance. But
opening a business is mentioned most frequently and ranks highest in priority.
Financial Priorities of Filipinos
Top 10 priorities based on numbers of mentions
Incidence of being ranked first
Open a business
51 %
Lot
45 %
39 %
Life insurance
39 %
Education plan
37 %
Car / Vehicle
37 %
Gadgets
37 %
Health insurance
35 %
House renovation / Maintenance
27 %
House / Condominiums
27 %
Durables / Appliances
With your current financial capability, what are the
things that you may want to prioritize buying within the
next 2 years? Please select from the list. You can also
name other things that are not included in this list.
18 | SOLAR FLARe
15 %
12 %
11 %
15 %
5%
4%
8%
6%
6%
1%

20. How are Filipinos preparing for anticipated life events?
100 %
50 %
79 %
34 %
19 %
8%
4%
0%
2%
How are you preparing for anticipated life events in the next five years?
Bank savings
Put up a business
Get life insurance
Investment
Savings at home
Others
With priorities that span from accumulating assets to family-related items, SOLAR showed
that Filipinos may not be aware of other financial instruments that can help them achieve
their priorities and prepare for future events. Only 2 out of 10 would use insurance to
prepare for future events, less than 1 out of 10 would use investments, and 8 out of 10
would still rely on bank savings for these needs.
Drilling further, among those who have insured themselves, 31% actually use their policy
to accomplish their goals. The rest still holds the traditional, even outdated, view that one
has to die first before being able to enjoy the benefits of life insurance.
SOLAR FLARe | 19

21. CAN “JUAN” AFFORD
THE FUTURE?
Sadly, Filipinos are often clueless about the state of their money. Their preoccupation
about other matters and lack of financial literacy put them at risk of not being ready for
the future.

24. 4
TOWARDS THE
BRIGHTER SIDE

25. Section 04
TOWARDS THE
BRIGHTER SIDE
In the Philippines, life insurance penetration is only at 1.14% of the Gross Domestic
Product (GDP)*. According to the 2011 Insurance Commission Annual Report, life insurance
coverage - counting individually bought and group insurance provided by employers –
reached only 18.29% of the population.
When compared to other Asia Pacific countries, the Filipino’s life insurance outlook
becomes even bleaker. It is lagging behind fellow Southeast Asia nations like Malaysia
and Indonesia. When compared to Western countries, the Philippines still lags behind the
United States and Europe. Taiwan boasts of a high life insurance penetration at 13.9% of
GDP.
But, things are looking up. The notion of life insurance being useful only when one is dead
is slowly changing as more and more Filipinos are realizing its living benefits.
There is now a growing trend of people who consider life insurance as essential. Filipinos
are also becoming more discerning, seeking as much information about life insurance
before purchase.
However, education is still very much a need. Filipinos must be taught about financial
instruments beyond ATMs and bank accounts. As they are enlightened about insurance,
investment, and other financial instruments, they would be more empowered and able to
see the fulfillment of their goals.
*2012 insurance penetration computed using GDP as stated in NSCB (10,568,405,000,000)
and Premium Income as stated in IC’s 4th Quarter Statistical Report - 2012 (120,301,000,000)
24 | SOLAR FLARe

26. Agrees
Neutral
Disagrees
Attitudes Toward Life Insurance
I find out everything I possibly can about a life insurance company before considering buying a policy from them
88 %
9%
3%
I expect to have easy, immediate access to customer care representative, agent, or online-facility of my life insurer
17 %
79 %
4%
Aside from talking to an agent / financial advisor, I do my own research when getting a life insurance
15 %
77 %
8%
Everyone must have a life insurance
18 %
74 %
7%
Having a life insurance is one of the smartest things to do
23 %
71 %
6%
I would never buy a life insurance without talking to a company personnel by phone or face-to-face
19 %
70 %
11 %
I prefer to purchase life insurance through a bank / bank insurance agent
27 %
64 %
9%
I prefer to purchase life insurance through a life insurance agent
28 %
61 %
11 %
I am willing to go with smaller or newer life insurance companies to get better returns / benefits
26 %
49 %
25 %
I am willing to go with smaller or newer life insurance companies if I can get better rates / price / premium
30 %
42 %
28 %
I don’t need a life insurance yet at this point in my life
33 %
31 %
36 %
All life insurance company are alike
27 %
37 %
37 %
Such momentum must be seized by the life insurance sector, imploring companies to
make information more available and accessible to the public. With education and proper
counsel, the capacity of Filipinos to manage their finances would improve, making them
more confident to get financial instruments like life insurance.
For Sun Life and its fellow insurers, they must always strive to serve the customer while
allowing their enterprise to stay relevant in an ever-changing economy.
For Filipinos and their families, life insurance must be recognized as an important part of
their journey towards financial security. So, as the benefits of life insurance become more
established, the future of Filipinos can become much brighter.
SOLAR FLARe | 25

29. Traditional
Group
Variable

33. SUN LIFE FINANCIAL
Sun Life Financial (SLF) is an international leader in protection and wealth management with key operations
in Canada, US, UK, Hong Kong, Japan, Indonesia, India, China, Vietnam, Malaysia, the Philippines, and
Bermuda. As of December 31, 2012, the Sun Life Financial group of companies had total assets under
management of CDN$532 billion.
Using the ticker symbol “SLF,” Sun Life Financial Inc. trades on the Toronto (TSX). New York Stock (NYSE)
and Philippine Stock Exchanges.
In the Philippines, Sun Life Financial is in the business of life insurance, mutual funds, pension and education
plans, represented by the following three entities:
Sun Life of Canada (Philippines), Inc. (SLOCPI) which pioneered life insurance in the Philippines in 1895;
Sun Life Asset Management Company Inc. (SLAMCI) which manages the mutual funds business; and Sun Life
Financial Plans, Inc. (SLFPI) which administers the company’s pension and educational plans.
Today, Sun Life in the Philippines is one of the largest and most trusted insurers in the country with over
a million group and individual life policyholders and is boosted by the strength and stability of Sun Life
Financial shares in the Philippine Stock Exchange. Sun Life Philippines’ focus is on helping Filipinos achieve
lifetime financial security by gaining insight into its customers’ lives and providing them with the products
and services that meet their needs.
32 | SOLAR FLARe