The moderating effect of financial behavior on the relationship of financial knowledge to financial well-being among OFW households in Manila City: A basis for remittance management

ABSTRACT: Overseas Filipino Workers (OFWs) are vital to the Philippine economy, particularly in Manila City, through their remittances. These funds provide crucial financial support to families. However, many OFW households struggle with financial management, exhibiting low savings and investment rates due to a lack of financial literacy and planning. This mismanagement can lead to financial instability when remittance flows fluctuate. This study investigated the influence of financial knowledge on the financial behavior of OFW households in Manila and how this behavior affects their financial well-being. The research employed a face-to-face survey using a four-point Likert scale to gather data on financial knowledge and behavior. Findings indicated that respondents generally demonstrate responsible financial behaviors in spending, saving, investing, debt management, and budgeting. Despite this, challenges such as pre-remittance financial constraints and difficulties in controlling unnecessary expenses persist. While debt management is generally strong, some individuals experience financial stress, and tracking small daily expenses is less prioritized. The study revealed a significant positive impact of financial knowledge on financial well-being, especially in investment, insurance, and debt management. However, budgeting and saving did not show a statistically significant direct impact. While both financial knowledge and behavior contribute to financial well-being, their effects are independent; knowledge alone is insufficient without practical application. Good financial behavior enhances the positive effects of financial knowledge. To improve the financial stability of OFW households, the study recommends several initiatives: a Community-Based investment Literacy Program offering workshops and advisory services; a Financial Security and Asset Growth Program providing personalized investment and retirement planning, coupled with a Pension and Retirement Advocacy, and a Comprehensive Household Financial Management Program focusing on budgeting, expense tracking, and financial counselling. These programs aim to enhance financial literacy, promote wealth accumulation, and ensure long-term financial security for OFW families.

Filipiniana