Educ 206

Building and Enhancing New Literacies Across Curriculum UNESCO (2004) defined literacy as “the ability to identify,
understand, interpret, create, communicate, and compute.”
Chapter 1: Introduction to 21st Century Literacies - “Knowing about something and what to do with it”

Literacy stems from literature Mkandawire (2018) posits that literacy is “a form of knowledge,
Literature from litera means letters competence, and skills in a particular field or area”
A man marked with letters
- The ability to read and write was the prime importance From “reading and writing” literacy now becomes “knowledge”
of being “literate”.
Conventional/Traditional Literacy – reading and writing that
Miller (1973) divides this conventional concept of literacy into follow the form, content, and use of standard conventions
three sub-categories: (Koppenhaver, 2000).

• Basic Literacy – the ability to recognize letters and words. New literacies are not “new” in the sense that they never
Recognizing the sequence of letters in a word without existed before. We consider them to be new because of the
having understood it. contexts in which old skills and knowledge are being employed,
• Comprehension Literacy - the ability to understand the both in nature and scope.
meaning of what is being read. Deeply comprehending
the meaning and use of a word in any sentence. Victorian Era – “language of flowers”
• Functional or Practical Literacy – the ability to decode - A bouquet was used to communicate a message that
and comprehend written materials needed to perform could not otherwise be spoken aloud in Victorian society
everyday vocational tasks. Being able to read well (Greenway, 1884).
enough to operate in society. - A bouquet of oak leaves – strength
- Purple rose – sorrow
Two things for reading to exist: - White lilies – resurrection
1. A text consisting of symbols and grammar to be read. - Pale-yellow tulips and rosemary – memory or
2. Meaning or message being communicated by the text remembrance
for the reader to extract.
Technologies like blogging and vlogging, social networking, and
Schlechty (2001) defines functional literacy as the state of being even text messaging change and expand both the extent and
able to read, but not well enough to manage daily living and the form of our communication –blending text, sound, and
employment tasks. images in ways unforeseen and unprecedented (Richardson,
2014).
❖ Expanded Views of Literacy
Rise of the new literacies: 4. Expanded flow or instrumental culture around the world.
Increased Reach – communicating with more people across
vast distances (with the help of advancing technology). 1. Economic Dependence/Interdependence
Increased means of communication – communicating in more Reliance of one nation on another for economic support,
ways and faster. resources, or markets. It manifests as the integration of
economies through international trade and investment,
Increased breadth of content – communicating with more where countries are connected through the exchange
things than ever before. of goods, services, and capital.

Chapter 2 Kentor (2001) identifies four ways in which foreign capital

Globalization, Cultural, and Multicultural Literacies dependence can increase income inequality within a
country:
Globalization
1. It creates a small, highly-paid class of elites to
- Levin-Institute (2017) – a process of interaction and manage these investments, which in turn creates
integration between people, business entities, many but usually low-paying jobs.
governments, and cultures from other nations. Driven by
international trade and investment and supported by 2. Profits from these investments are repatriated back to
information technology. the home country of the investors, rather than being
- Changes the way nations, businesses, and people reinvested in the host country. This inhibits the growth
interact (TechTarget). of domestic capital and creates an economic
- Having interconnectedness around the globe. climate that favors foreign capital, limiting the ability
- Globalization is not new but the big change to it is the of domestic labor to negotiate for better wages. “The
SPEED of change, scope, and its effect on the lives of rich become richer, and the poor become poorer.”
ordinary people.
Hout (1980) observes that international dependence, which is
another term for globalization, tends to suppress adult wages.
Effects of Globalization
This suppression of adult wages perpetuates the role of children
- Globalization is multi-dimensional.
as economic necessities, leading to a situation where having
many children is seen as beneficial for the family's livelihood
Meyer (2000) summarizes the effect of globalization as follows:
("kapag maraming anak, maraming katulong sa
1. Economic. Political, and military dependence and
hanapbuhay"). This dynamic can result in explosive population
interdependence between nations;
growth. The implication is that globalization, through its impact
2. Expanded flow or individual people among societies;
on wage levels, can influence demographic trends and
3. Interdependence of expressive culture among nations;
population dynamics within a country.
and
 monetization and widespread dissemination of these cultural
This high population growth can create a large sub-sector of artifacts. For example, the global popularity of K-pop music and
society that is insulated from economic development yet the consumption of Korean culture in the Philippines illustrate
competes for resources with the rest of the population, how expressive culture can be exported and influence other
potentially leading to political instability and policies that societies.
discourage investment, which in turn slows economic growth.
Instrumental culture, on the other hand, involves the models or
2. Political and Military Dependence/Interdependence ways of thinking about and enacting national identity, policies,
socio-economic development, human rights, education, and
In the context of the Philippines, there is a significant reliance on
social progress. An example of this is the Philippine educational
the political and military power of the United States to maintain
system, which is heavily influenced by the American
its sovereignty in the Southeast Asian region. This dependence is
educational system. This influence is evident in the adoption of
evident in the belief that the US would intervene on behalf of
educational trends and policies from the United States and
the Philippines in case of war, despite the US's conservative
other Western countries, which are perceived as global leaders
stance on foreign policies.
in the field.
Such dependence is not unique to the Philippines, as many
countries around the world, including those with communist The expansion of both expressive and instrumental culture is a
ideologies, also engage in political and military alliances to result of increased interaction and integration among nations,
protect their interests and investments. These alliances are driven by international trade, investment, and information
driven by the need to ensure national security and navigate the technology. This cultural exchange can lead to a hybridization
complexities of international relations. of cultures, where elements from different societies intermingle
and influence one another. However, it also raises questions
This interconnectedness highlights the multifaceted nature of about cultural identity, authenticity, and the potential dilution of
globalization, where economic, political, and military spheres cultural heritage.
are deeply intertwined.
4. Expanded Flow of People among Societies
3. Expand the Flow of Expressive and Instrumental Culture
Refers to the increased movement and exchange of cultural A phenomenon driven by globalization, which has led to an
elements between societies, which is a significant aspect of increased movement of individuals across national borders for
globalization. This exchange is categorized into two types of various reasons. This movement is categorized into three main
culture: expressive and instrumental. types: socio-economic migration, political expulsion, and
travel/tourism (Meyer, 2000).
Expressive culture encompasses the artistic and symbolic
elements of a culture, such as language, music, arts, and other Socio-economic migration explains why people seek better
forms of cultural expression. Globalization has facilitated the economic opportunities abroad due to a lack of such
opportunities in their home country. The Philippines' Overseas National Commission for Culture and the Arts (NCCA) – tasked
Filipino Worker (OFW) is a prime example of this, with millions of to domination, preservation, and dissemination of Philippine
Filipinos working overseas to support their families. culture, both locally and internationally.

Political expulsion involves individuals fleeing their country's Philippine Cultural Education Program (PCEP) – “envisions a
political climate to seek asylum and resettlement in a more nation of culturally literate and empowered Filipinos”. Designed
favorable country. to make cultural education accessible to all sectors of Philippine
society.
Travel/tourism is another significant factor, indicating economic - Republic Act 10066, enacted in 2010, is a significant
development as more people can afford to travel abroad for legislation in the Philippines that pertains to cultural
leisure, often driven by curiosity and enabled by globalization. heritage education. This law designates the Philippine
Cultural Education Program (PCEP) and the Department
The Philippine Statistics Authority reported that there were 2.3 of Education (DepEd) as the bodies responsible for
million OFWs in 2017, contributing significantly to the economy formulating cultural heritage education programs for
through remittances. This illustrates the scale of human mobility both local and overseas Filipinos.
and its economic impact in the context of globalization. - This legislation aims to ensure that cultural education is
integrated into all aspects of the Philippine education
system, promoting a nation of culturally literate and
Cultural Literacy empowered Filipinos. This is particularly important in the
context of the Philippines, where culture is a complex
A term coined by Hirsch (1983) the ability to understand the blend of indigenous and colonial influences, and there is
signs and symbols of a given culture and being able to a need for cultural literacy to navigate the diverse
participate in it. cultural landscape both within the country and abroad.

“the classroom was in absolute bedlam” De Leon (2011) argues that this is in part due to a colonial
mindset among Filipino artists that inhibits the full development
- “Bedlam” refers to the scene of uproar, confusion, and and realization of Filipino artistic creativity –a kind of artistic and
chaos. The term is British in origin, referring to a psychiatric cultural creativity that is fully Filipino.
hospital in London by the name of St. Mary Bethlehem. - He coined Doña Victorina Syndrome, which refers to a
mindset among Filipinos where there is a tendency to
- Culture-specific but is not limited to national cultures. view anything that is natively Filipino as inferior,
backward, and worthless when compared to Western
counterparts. This mindset is seen as a form of inferiority
complex. It is a manifestation of low self-esteem that
borders on self-contempt, leading to a lack of respect for
 Filipino goods, concepts, techniques, approaches, and defined by Dusi, Messetti, and Steinbach (2014) as a composite
expertise. This syndrome is a significant challenge to the of skills, abilities, attitudes, personality patterns, etc. necessary
development of a truly Filipino artistic expression and for clear and productive communication with cultures other
cultural identity, and it calls for a reevaluation of than our own.
negative self-images and notions through education.
- “A workable, effective program of education that can Fantini (2006) defines it as “a complex of abilities needed to
make Filipinos more responsive and sensitive to Filipino perform effectively and appropriately when interacting with
dignity, needs, values, and cultural potentials and others who are linguistically and culturally different from
assets.” oneself.”

Rather, true multicultural literacy consists of perspectives,

attitudes, and beliefs about other cultures that affect how we
communicate and the motives behind our communication.
Here are some examples:
1. Be Selfless - emphasizes the importance of prioritizing the
feelings and needs of others over one's own. It helps to
mitigate the offense and conflict that can arise from a
"me first" attitude. A selfless attitude is essential for
building bridges between cultures and for creating an
inclusive and harmonious society.
2. Know that good and useful things can come from those
different from us - It suggests that individuals should
Multicultural Literacy
recognize and appreciate the value and contributions of
cultures different from their own. This principle challenges
A set of skills and knowledge that enables individuals to engage
the tendency to dismiss or ignore the positive aspects of
in clear, productive, and respectful communication with people
other cultures and encourages an open-minded
from cultures different from their own. It involves understanding
approach to learning from and about others. It
and valuing cultural differences, being open to learning from
encourages individuals to look beyond their cultural
other cultures, and being willing to compromise in interactions.
perspectives and embrace the richness and diversity of
In the American context, multicultural literacy is closely tied to
the human experience.
recognizing the polyethnic origins of knowledge and fostering
3. Be willing to compromise - there is an underlying principle
equality, diversity, and social justice.
of mutual exchange and adjustment. Acknowledging
both parties have their desires and expectations, and for
In Europe, multicultural literacy comes more in the form of
the interaction to be productive and peaceful, there
Intercultural Communications Competence (ICC) which is
must be a willingness to give and take. Compromise
 involves a reciprocal adjustment of demands and over concession. This illustrates that while peace is a common
expectations to accommodate what the other party is goal, the willingness to compromise can vary greatly among
willing to give. It is a necessary component of cultures, leading to conflicts that are difficult to resolve.
multicultural literacy, as it allows for the negotiation of
differences and the finding of common ground, which is
essential for peaceful and productive interactions ❖ Nationalistic and Regionalistic Pushback
among people from diverse backgrounds.
4. Accept that there are limits - there is a point at which one Resistance arises when there is a perceived threat to a group's
or both parties may be unwilling or unable to adjust their cultural identity due to the pressures of multicultural sensitivity,
desires or expectations any further to accommodate the inclusion, and diversity. This resistance is often a response to the
other. When this point is reached, the interaction may feeling that the group's distinct identity is being compromised or
become less productive, and it may be necessary to "watered-down" by the need to conform to broader national or
either change the purpose of the interaction or international standards. The backlash against the proposed
disengage from it, accepting that the desired outcome "Ortograpiya ti Pagsasao nga Ilokano," illustrates how regional
cannot be achieved with that source. Setting realistic language advocates feared the loss of their linguistic identity if
expectations and understanding that not all differences forced to adopt an orthography that did not reflect their
can be reconciled through compromise. It highlights the language's unique characteristics. This pushback underscores
need to respect the boundaries of others and to be the tension between national unity and the preservation of
mindful of the point at which further attempts at regional cultural identities, particularly in the context of
accommodation may lead to misunderstanding, hurt, language and orthography.
and conflict.
A case in point is the very recent proposal of “Ortograpiya ti
Issues in Teaching and Learning Multicultural Literacy in the Pagsasao nga Ilokano” by an official of the Komisyon ng
Philippines Wikang Filipino (KWF) in October 2018. The proposal was met
with intense backlash from a group of Ilokano writers and
❖ Conflicting Requirements for Piece language advocates over the “incompetence in preparing the
Ilokano orthography that didn’t conform with the existing
Highlights the challenges in achieving peace among different orthography being used by the Ilokano writers and experts,”
cultures. It is a central theme in multicultural literacy, claiming that the proposed orthography was based on Tagalog
emphasizing the need for productive and non-violent and not Ilokano and that the commission’s attempts to compel
interaction. However, not all cultures value peace equally or the regional language to conform to the standards of the
are willing to make the same compromises to attain it. The Ortograpiyang Pambansa (National Orthography) would
Israel/Palestinian conflict is cited as an example where both “destroy the identity of the Ilokano language” (Dumlao, 2018).
sides desire peace but are unwilling to compromise on their
territorial claims, leading to a preference for perpetual conflict ❖ Persistence of the Problem
 one another, the more sense it makes to behave selflessly
A challenge of achieving multicultural inclusiveness without toward one another and selfishly toward others who are
compromising the identity of the host culture. While multicultural different we can easily frame the issue of discrimination of
inclusiveness is generally seen as positive, it comes at the cost of cultural discrimination and justice is necessary for survival.
diluting the host culture's identity. This creates a dilemma for Therefore it is in the best interests(genetic and otherwise) to
cultures, asking them to choose between inclusion and maintain the status quo-or reverse it, as the case may be.
maintaining their distinct identity. The problem persists because
it is easier for the culture seeking accommodation to embrace Learn about other cultures – Banks (1991) states that the first
multicultural literacy, as it costs them nothing, compared to the thing to consider when teaching multiculturalism is knowing
host culture that must do the accommodating. This resistance is about cultures that are not yours. It is essential to know and build
a significant hurdle in the pursuit of multicultural literacy, a sense of appreciation for other cultures so that you can
reflecting the tension between the desire for unity and the reflect on it with your students.
preservation of cultural identity.
Familiarize yourself with how discrimination and prejudice
Boutte (2008) suggests that issues of discrimination in all its forms appear in your own culture – Boutte (2008) and Banks (1991)
(racial religious, tribal, cultural, etc.) are issues of hatred, which noted that teachers must first identify and confront the patterns
she defines in educational settings as “the lack of compassion of discrimination and prejudice before they teach their students
and lack of respect for the rights of other,” and that such hatred the same thing.
must be fought and its roots must be attacked because for as
long hatred exists in the human mind, real peace will be As you are, so will you behave - a teacher's genuine beliefs
impossible (Vreeland, 2001). about individuals different from themselves will directly
influence their actions and interactions with students. If a
❖ The Question of Value teacher does not truly value diversity, this will be evident in their
behavior, and students will notice it. Conversely, if a teacher
Another issue in teaching and learning multicultural literacy is believes in the equal value of all individuals, this belief will
better posited as a question: “Why should I treat people of manifest in their actions, which students will learn from.
another culture with respect?”
It is important to model empathy and respect for diversity.
There is a gap between whether a person accepts other Young students may struggle to exercise empathy without
cultures as they are in their own. This can go with not everyone guidance, so teachers must demonstrate these values in their
values peace to the same degree. We can note that some will daily interactions rather than merely instructing students to be
and others won’t. compassionate. Ultimately, the teacher's authentic beliefs and
behaviors foster a positive learning environment that values
Dawkins’ (2016) concept of a “selfish gene”- where on a multiculturalism and diversity.
genetic level, the more two individuals are genetically similar to
Model more, tell more - Young students, by nature, will have - Interpreting social contexts (e.g., knowing when someone is
difficulty exercising empathy toward those who are different upset, friendly, or uninterested).
from them. The ability is there, but it will naturally lack practice. It - Recognizing social roles and the dynamics between different
is therefore not enough that teachers tell them to be more people (e.g., understanding hierarchy in a workplace or group).
compassionate, the others look like on a day–to–day basis.
Good social perception is crucial for effective communication,
Chapter 03 as it allows individuals to adjust their behavior based on the
Social Literacy situation and the people they interact with. For example,
someone with strong social perception skills might quickly sense
Focuses on developing social skills, knowledge, and positive tension in a conversation and respond in a way that diffuses
human values that promote responsible and constructive conflict.
behavior in various social settings. It emphasizes behaving in a
morally upright, just, and equitable way to foster positive Social cognition - the mental processes involved in
relationships free from prejudice, hate, and discrimination. understanding and navigating social interactions. It
encompasses how individuals think about themselves and
• Morally upright - refers to adhering to standards of right others in social contexts. This includes:
and wrong in thoughts, speech, actions, and - Processing information related to social norms and
motivations. expectations.
• Just is aligned with a system of justice that rewards good - Understanding perspectives, which involves seeing situations
and punishes wrongdoing, governed by laws or rules. from another person’s viewpoint (empathy).
• Equitable - treat others fairly by ensuring people get - Making decisions based on social knowledge, such as
what they need, as opposed to treating everyone the deciding how to react in a conversation, how to express
same. emotions appropriately, or how to solve social conflicts.

The role of peers and schools in developing social skills is Social cognition allows people to predict how others will
highlighted, with social skills being divided into three respond to certain actions, helping them adjust their behavior to
components according to Arthur, Davidson, & Stow (2000): fit into social norms. It's deeply tied to learning and applying
social rules, such as knowing when to speak or remain silent, or
Social perception - refers to how individuals observe and how to handle disagreements tactfully.
interpret social cues from their environment and others. It
involves understanding the emotions, intentions, and behaviors Social performance is the outward expression of social skills. It
of people in social settings. Key elements of social perception refers to how individuals behave and interact in real-world
include: social situations. This includes:
- Reading body language, facial expressions, and tone of voice - Initiating conversations and engaging in appropriate social
to assess how someone feels. behaviors.
- Responding to others in socially acceptable ways, such as rehearse and practice new skills. They should encourage
showing respect, sharing, and cooperating. and praise the child for successfully using a new skill.
- Adapting behavior to meet social expectations, like being
polite in formal settings or being more casual with friends. Professionals typically intervene only when children are
having substantial social difficulty with peers. These
Social performance is the practical outcome of social individuals can implement structured, guided, and effective
perception and social cognition. It’s how well someone applies programs that often involve group work with peers. Children
what they’ve learned about social norms and cues. For must then generalize the skills they learn in the group to
instance, a child with strong social performance skills might school and other personal social situations.
know how to share toys and take turns in a playground, showing
that they can apply the social rules they’ve learned. Teachers, while not required to formally teach social skills,
can support social development by:
Social skills are described as the ability to interact in socially
acceptable and mutually beneficial ways. The text notes that - Being attentive to teasing, bullying, and social
increasing emphasis is being placed on social performance, or exclusion.
how these skills translate into outcomes. - Collaborating with parents to prevent children's
humiliation and distress.
Fundamental principles of relating to others: - Pairing socially struggling students with more socially
skilled peers.
- Greetings - Promoting cooperative learning rather than
- Initiating conversation competitive activities.
- Understanding the listener - Recognizing the strengths of all children, addressing
- Empathizing social weaknesses, and fostering an inclusive
- Reading social cues environment where diversity is celebrated.
- Preview or Planning
- Problem-solving These efforts help enhance children's social abilities, sense of
- Apologizing belonging, and self-esteem, both in school and in life.

A. Role of Parents and Teachers in Teaching Social SkillsTo B. Issues in Teaching Social Literacy
Children
There are two views on how children learn to live socially
Parents typically play a major role in teaching children social according to Arthur, Davidson, & Stow (2000). The first one is
skills. Parents can directly teach social skills by modeling, normative and communal – children learn customs that provide
role-playing, and providing opportunities for their children to them with a guide to act in ways that minimize conflict. The
second one is pragmatic and individualistic – the social order of
children is created by explicit and implicit agreements entered phones during job interviews, or even bringing their parents with
by self-seeking individuals to avert the worst consequences of them. “Such behavior demonstrates a lack of situational
their selfish instincts. awareness about what is appropriate to do in different social
circumstances.
Teaching social literacy in schools is not as easy as it appears to
be due to subjective standards of morality and the inherent While college classrooms or the actual office atmosphere may
human capacity to judge and make excuses. allow for a more casual dress code, students need to be taught
what is socially acceptable in terms of dress or behavior for
1. Subjective Standards of Morality them to stand out above their colleagues. An ability to read
- postmodern philosophies, which view truth and social situations illustrates strength to employers – quickly picking
morality as subjective, lead to the acceptance of up on a client’s mood or expectations in various business or
behaviors once considered wrong. This undermines cross-cultural situations can be the difference between success
justice and equity, which depend on fixed moral and failure.
standards. Paradoxically, those who advocate for
subjective morality often call for objective standards Casual office attire has become common, but job interviews
when they become victims of moral relativism's still require formal dress and behavior to show respect.
negative consequences. Stories of inappropriate interview behavior (e.g., casual
2. Human Nature clothing, phone use, or bringing parents) reflect a lack of
- while people often advocate for moral uprightness, situational awareness.
justice, and equity, human nature tends to be College classrooms and offices may have relaxed dress
inconsistent in applying these standards to codes, but students must learn what is socially acceptable in
themselves. People demand fairness and justice professional settings.
when they are wronged but often excuse their Social awareness and the ability to read social cues are
actions when they are at fault. This inconsistency essential for standing out to employers.
highlights the need for social literacy education, Quickly understanding a client’s mood or expectations in
especially in a modern context where students are business and cross-cultural settings can determine success or
heavily influenced by the internet, to promote both failure
academic and career success.
Social Intelligence in Technological Communication
Situational Awareness in the Workplace
- technology and text-speak have deformalized
While casual office attire has become the norm in many offices, communication, students must still maintain respect
job interviews typically require more formal dress and behavior and clarity in their writing, especially in formal settings
to demonstrate a level of respect. Stories prevail of young adults like communicating with professors or future
showing up to interviews in casual clothing, texting, using employers. Understanding different communication
 genres and their demands helps students adjust their 1. Knowledge of Financial Products: Understanding
formality based on context, ensuring appropriate different financial instruments, such as stocks versus
and respectful interactions. bonds and fixed versus adjustable-rate mortgages.

Social Intelligence in Traditional Communication 2. Knowledge of Financial Concepts: Familiarity with

concepts like inflation, compounding, diversification, and
- despite the rise of email as the dominant form of credit scores.
communication, traditional forms like cover letters
and thank-you notes are still valued in professional 3. Mathematical Skills: Having the numeracy skills necessary
and social settings. Knowing how to craft these for effective financial decision-making.
documents demonstrates social intelligence, respect,
and an understanding of expectations. Learning to 4. Engagement in Financial Activities: Actively participating
write such documents is essential for students, as it in financial planning and management.
equips them with skills that will save time and effort in
future interactions. The Economic and Financial Literacy Act

The Economic and Financial Literacy Act (Republic Act No.

Chapter 4 10922) was enacted by the Philippine government to promote
Financial Literacy financial literacy among its citizens.

What is financial literacy? SECTION 1. Title.— This Act shall be known as the “Economic and
Financial Literacy Act”.
According to Kenton(2020), “Financial literacy is the ability to
understand and effectively apply various financial skills, SECTION 2. Declaration of Policy.— It is declared the policy of
including personal financial management, budgeting, and the State to develop national consciousness on economic and
investing”. financial literacy by declaring the second week of November of
every year as “Economic and Financial Literacy Week”. The
The National Endowment for Financial Education defines State recognizes the growth potential of the country through a
financial literacy as “the ability to read, analyze, manage, and financially literate people who make sound financial decisions,
communicate about the personal financial conditions that mobilize savings, and contribute ideas on improving economic
affect material well-being” (Alana and Ignacio,2019). and financial policies and programs.

SECTION 3. Participating Government Agencies.— To ensure

Hastings, et al. (2013) as cited by Alata and Ignacio (2019) meaningful observance of the Economic and Financial Literacy
Financial literacy is about: Week as herein declared, the National Economic and
Development Authority (NEDA) shall lead the participation of conducting basic economic and financial management
government agencies and instrumentalities during the classes. The DepED is also encouraged to assess and revise the
Economic and Financial Literacy Week. high school economics curriculum to make it more
ageappropriate, and ensure that economic and financial
As the lead agency, the NEDA shall plan, initiate, execute, and education becomes an integral part of formal learning.
encourage knowledge-expanding activities on economic and
financial literacy which may be adopted by government SECTION 5. Communication Arm.— The Philippine Information
agencies and instrumentalities, including local government units Agency (PIA) and the Presidential Communications
(LGUs), government-owned and -controlled corporations Development and Strategic Planning Office (PCDSPO) are
(GOCCs) and educational institutions. hereby mandated to allot airtime for programs, and produce
and disseminate printed and online materials for economic and
The NEDA shall convene for the purpose the relevant agencies, financial literacy awareness and enhancement.
to include the Bangko Sentral ng Pilipinas (BSP), the Department
of Finance (DOF), the Department of Education (DepED), the SECTION 6. Private Sector Participation.— The NEDA, in
Commission on Higher Education (CHED), the National Youth coordination with the Philippine Economic Society (PES), and in
Commission (NYC), and the Department of the Interior and partnership with other academic and professional institutions,
Local Government (DILG). shall lead and encourage the participation of the private sector
and civil society during the Economic and Financial Literacy
All heads of government agencies and instrumentalities, Week. The PES shall plan, initiate, and encourage knowledge-
including LGUs, GOCCs, and those identified by the NEDA as expanding activities on economic and financial literacy which
relevant agencies, are hereby directed to collaborate and may be adopted by the private sector and civil society in their
cooperate with the lead agency in advocating and respective offices.
implementing activities to celebrate the Economic and
Financial Literacy Week. SECTION 7. Separability Clause.— If any provision or part hereof
is held invalid or unconstitutional, the remainder of the law or
SECTION 4. Economic and Financial Literacy of Students and the the provision not otherwise affected shall remain valid and
Youth.— To improve the economic and financial literacy of subsisting.
students and the youth, all public and private elementary and
secondary schools under the DepED, the state and private SECTION 8. Repealing Clause.— All laws, decrees, orders, rules,
colleges and universities under the CHED, the Technical and regulations or parts thereof inconsistent with this Act are
Education and Skills Development Authority (TESDA), and the hereby repealed or modified accordingly.
NYC, in coordination with the NEDA, are hereby mandated to
conduct consciousness-raising and knowledge-expanding SECTION 9. Effectivity.— This Act shall take effect fifteen (15)
activities on economic and financial literacy including the days after its publication in the Official Gazette or in a
setting up of literature comers, organizing fora, trainings, and newspaper of general circulation
Benefits of Financial Literacy
5. Lower Costs on Bills: Being financially literate reduces the
Overview: likelihood of making costly financial mistakes, such as missing
(Tayne, 2014) credit card payments. This awareness helps individuals manage
their bills more effectively and avoid unnecessary interest
1. Prevention of Financial Abuses: Financial literacy helps charges.
individuals avoid becoming victims of predatory lending,
subprime mortgages, fraud, and high interest rates. By 6. Peace of Mind for Retirement Planning: Financial literacy
understanding financial products and their implications, provides individuals with the tools to create effective retirement
individuals can protect themselves from situations that could plans, alleviating worries about their financial future. Knowing
lead to bad credit, bankruptcy, or foreclosure. Awareness of how to plan for retirement allows individuals to feel more secure
proper spending habits can help individuals steer clear of and prepared for their later years.
overwhelming debt.
Common Concepts Under Financial Literacy
2. Impact on National Economy: Financial illiteracy can have
broader implications, contributing to poor business cycles, low - Investment Platform: An investment platform is an
savings rates, and inflation. When individuals lack financial essential online service that allows users to buy, sell,
knowledge, it can lead to economic instability, affecting not and hold funds. Notable investment platforms in the
just their finances but also the overall economy. Philippines include First Metro Securities, COL
Financial, CoinsPro, and Seedbox.ph.
3. Behavioral Implications: Research indicates that an
individual's level of financial literacy significantly influences their - Funds: This term refers to a specific amount of money
financial behavior. For instance, students exposed to financial allocated for a particular purpose.
education often believe that their money management skills will
impact their future, leading to more responsible financial - Finances: Finances encompass the monetary
decisions. resources of an individual, organization, company, or
government.
Logan Allec, owner of Money Done Right -listed the benefits of
being financially literate : - Debit Card: A debit card is a plastic card used for
making purchases. It allows direct transfer of funds
4. Recognition of Bad Financial Deals: Financial literacy equips from the owner's checking account to the
individuals with the ability to identify unfavorable financial merchant's account by swiping the card and
deals. This knowledge allows them to avoid unscrupulous entering a Personal Identification Number (PIN).
financial advisors and make informed decisions that benefit
them rather than others.
- Credit Card: A credit card is a plastic card that - Checking Account: A checking account is a type of
provides access to credit facilities, allowing users to bank account that provides easy access to funds.
purchase goods and services on credit. Users can access their money through ATM
withdrawals, writing checks, or using debit cards.
- Stock: A stock represents ownership in a corporation
and signifies a claim on part of the corporation's - Credit Score: A credit score is a numerical
assets and earnings. representation of an individual's creditworthiness,
ranging from 300 to 850. It is determined by factors
- Inflation: the substantial increase in the prices of such as the amount of debt, the number of open
goods and services, leading to a decrease in the accounts, and payment history. A low credit score
purchasing power of money. increases the likelihood of being denied loans, as it
poses a risk to lenders.
- Deflation: or negative inflation, refers to a significant
decrease in the prices of basic commodities. - Savings Account: A savings account is a deposit
account that earns interest, allowing individuals to
- Purchasing Power: This term indicates the value of store their money in banks or other financial
money based on the quantity of goods and services institutions while maintaining easy access to their
that can be purchased with a unit of currency. funds.

- Annual Percentage Rate (APR): APR is the annual - Interest Rate: An interest rate is the percentage
interest rate charged for borrowing money. charged on a loan for borrowing money. In the
context of savings accounts, it represents the portion
- Annual Percentage Yield (APY): APY is the annual of savings paid by banks as an incentive for
interest rate paid on savings accounts or other maintaining the account. Interest rates can be either
accounts that earn compound interest. variable or fixed.

- Budget: A budget is an estimate of income and

Levels of Financial Literacy
expenditures for a specific period, such as one
month, serving as a foundation for financial planning. The concept of financial literacy encompasses various
characteristics that influence how individuals view and manage
- Capital Gains: Capital gains occur when the value of their finances. According to Incharge (2017) as cited by Alana
an asset increases beyond its original purchase price, and Ignacio (2019), there are six major types of financial
realized only when the asset is sold. attitudes:
 - Frugal: Frugal individuals prioritize financial security by country in Financial Literacy and the events are as
living below their means and saving money. They follows(Alana and Ignacio,2019):
tend to avoid luxury purchases, believing that saving
• An estimated 20 million Filipinos saved money but only half
provides protection against unforeseen expenses.
had bank accounts-World Bank Study,2014.
- Pleasure Seekers: These individuals use money • The country is lacking of a national strategy in educating
primarily for enjoyment, often spending more than Filipinos towards financial education and literacy- a result
they earn. They may live beyond their means if not conducted by the Asian Development Bank (ADB) in 2018.
careful, focusing on immediate gratification rather
than long-term financial stability. • The Bangko Sentral ng Pilipinas (BSP) released the national
strategy for financial inclusion, stating that while institutions strive
- Self-Worth Seekers: This group spends money to to broaden financial services, financial literacy should
enhance their self-image, often equating their complement such initiatives.
financial status with personal value. They may • Only 25% of Filipinos are financially literate. This shows a large
prioritize luxury items to showcase their financial percentage not properly educated about financial concepts
capability. such as inflation and diversification- Standard & Poor’s(S&P)
Ratings services survey,2018.
- Indifferent: Indifferent individuals view money and
material possessions as unimportant. They may prefer • Only 1% of the Total population in the Philippines have
to create their own items or grow their own food invested to stock market even if it has been existing for Ten
rather than purchasing them. Years now.

• More than 80% of the Working Filipinos belonging in the middle

- Powerful: Those in this category use money to exert class have no formal financial plan.
control and influence over others. They leverage their
financial resources to gain power in social or
professional contexts.
Developing Financial Literacy: Needs vs. Wants

- Status Seekers: Status seekers use their financial

resources to display their wealth and social standing,
Understanding the difference between “needs” and “wants” is
often investing in luxury goods to impress others.
a fundamental concept in developing financial literacy. This
awareness enables individuals from various financial
. FINANCIAL LITERACY IN THE PHILIPPINES backgrounds to make informed decisions regarding their
finances. Below is a detailed comparison of needs and wants
“State of Finacial Education in the Philippines,” an article by Go
based on Surbhi (2016).
(2017) listed events that manifest the current standing of the
 “a person can be highly educated, professionally successful,
and financially literate” -Robert Kiyosaki (author of ‘Rich Dad,
Poor Dad’)

One of the noteworthy statements of Kiyosaki is when he

claimed that someone doesn’t need to earn a high income to
be rich for rich people make money work for them. In here, he
discusses one of the most vital concept in financial literacy-
assets vs. liabilities. Asset is something that brings you money
while liability to put in its simplest definition is something that
Source:[https://keydifferences.com/difference-between-needs-and- takes money away from you.
wants.html)
Below are the Big Ideas in the said book lifted from:
Needs are the essentials required for survival, traditionally limited
to food, shelter, and clothing. The extent to which these needs 1. The poor and the middle-class work for money. The rich have
are met significantly impacts an individual's functionality. For money work for them.
instance, a student attending school on an empty stomach is
2. It’s not how much money you make that matters. It’s how
likely to perform poorly due to unmet basic needs. Conversely, if
much money you keep.
the same student has all the necessities fulfilled, their
performance is expected to improve. 3. Rich people acquire assets. The poor and middle class
acquire liabilities that they think are assets.
In contemporary society, needs have evolved to include
education and healthcare, which are critical for survival and 4. Financial aptitude is what you do with money once you make
well-being. As the world changes, so do the basic needs of it, how you keep people from taking it from you, how to keep it
individuals, adapting to new circumstances and challenges. longer, and how you make money work hard for you.

For effective financial planning, individuals must prioritize 5. The single most powerful asset we all have is our mind.
“needs” over “wants”. By focusing on fulfilling essential needs
before indulging in wants, individuals can achieve greater
financial stability and security. This prioritization ensures that Cash Flow Patterns:
resources are allocated effectively, reducing the risk of financial
distress. • Poor Class: Individuals in this group often struggle to
make ends meet, working multiple jobs just to cover
monthly expenses. Their cash flow typically goes from
income directly to expenses, leaving little room for
Assets VS Liability
investment.
 • Middle Class: While they may have higher-paying jobs, Understanding Diversification
they still live paycheck to paycheck, often accumulating
liabilities such as large homes and luxury items. They tend To illustrate diversification, consider the example of Alexander,
to manage their finances better than the poor but still who invests $100,000 in a diversified portfolio. He takes into
prioritize liabilities over assets. account market realities and assesses the relationship between
• Rich Class: The wealthy prioritize acquiring assets over risk and return, opting for relatively safe investments that
liabilities. They generate passive income through promise long-term returns. His diversification strategy includes:
investments and do not rely on traditional jobs for their
income. This approach allows them to build wealth o Diverse Stock Selection: Alexander invests in 10 to 12 stocks
effectively. from various industries, sectors, and geographical
regions. This mix helps to leverage risk effectively.
Practical Tips in Diversification of Money
o Varied Risk Levels: He includes investments with different
The adage “Don’t put your eggs in one basket” serves as a risk profiles. For instance, when stock prices decline, bond
fundamental principle in financial diversification. Literally, if all prices often rise as investors seek safety in bonds. A
your eggs are in one basket and that basket falls, you risk losing portfolio that includes both stocks and bonds is likely to
everything. Figuratively, this means spreading your resources perform better during market downturns than one that
and assets across various investment instruments to mitigate consists solely of stocks.
risk. This approach has proven beneficial for many individuals
during financial crises. o Standard Deviation Calculation: Alexander calculates the
standard deviation of his diversified portfolio. Ideally, the
The Millennial Perspective portfolio's standard deviation should be lower than that of
each individual asset. For example, if Stock A has an
Many millennials embrace the philosophy of "You only live once," average expected return of 5.17% and Stock B has an
often prioritizing experiences over accumulating assets or average expected return of 6.24%, the portfolio's standard
managing liabilities. This mindset can lead to financial deviation is 3.75%. This indicates that the portfolio is less
challenges later in life, particularly when it comes time to save volatile than the individual stocks, which can help reduce
for retirement. The stress of realizing that one has not saved overall risk.
adequately for retirement can be overwhelming. However, it is
not too late for millennials to adopt better financial habits,
including diversification, to secure a more stable future. What Must a Diversified Portfolio Include?
A diversified portfolio is essential for managing risk and - Sector funds: These funds focus on specific sectors of the
optimizing returns. Here are the key components that should be economy, allowing investors to capitalize on sector-specific
included: trends.

- Real estate funds: Investing in real estate can provide

income through rental yields and potential appreciation in
1. Stocks: A diversified portfolio must include stocks, which
property value.
represent a form of security indicating that the holder has
proportionate ownership in the issuing corporation. Domestic - Commodity-focused funds: These funds invest in physical
stocks provide ownership in local companies, while foreign goods like gold, oil, or agricultural products, which can act as a
stocks represent ownership in companies based outside the hedge against inflation.
investor's home country. Investing in stocks offers benefits such
- Asset allocation funds: These funds automatically diversify
as dividend payouts and potential capital gains as the stock
across various asset classes, adjusting the mix based on market
value increases over time.
conditions.

2. Bonds: Bonds are another critical component of a diversified

Chapter 5
portfolio. They are interest-bearing securities that obligate the
issuer to pay the bondholder a specified sum of money at
regular intervals (known as coupons) and to repay the principal
amount at maturity. Compared to stocks, bonds are generally
less volatile, making them a safer option during periods of
market unpredictability. However, bonds typically offer lower
returns on investment (ROI) compared to stocks, which is a
trade-off for their stability.

3. Other Investment Options: In addition to stocks and bonds, a

well-diversified portfolio may include:

- Short-term investments: These can provide liquidity and quick

access to cash.

- International stocks: Investing in foreign markets can

enhance diversification and exposure to global growth
opportunities.