INVESTMENT PRACTICES OF OVERSEAS FILIPINO WORKERS IN TAYTAY,

RIZAL

An Undergraduate Thesis

Presented to

the Faculty of the College of Business

University of Rizal System

Binangonan, Rizal

In Partial Fulfillment

of the Requirements of the Degree

Bachelor of Science in Business Administration

Major in Financial Management

ADONIS, ANERA M.
GUALVEZ, NINA C.
LUZURIAGA, DARWIN

2024
 Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Overseas Filipino Workers need extra funds if they wish to have a secure

financial future. They are able to protect their finances against any financial

difficulties that may affect them, consider a pricey life event like a serious health

emergency during the Covid-19 Pandemic. Overseas Filipino Workers are certain

to think about earning a high salary, having the chance to start over, gaining foreign

experience, and perhaps leading a better lifestyle than they do now in the

Philippines. Overseas Filipino Workers (OFW) are the modern-day heroes and

being an OFW is not easy as we expected.

Investment practices refer to the strategies, techniques, and approaches

individuals or organizations use to invest their money with the goal of generating

returns or building wealth over time. These practices can vary widely based on

factors like risk tolerance, financial goals, time horizon, and available resources.

Here are some common investment practices which include the Goal Setting, Risk

Assessment, Diversification, Asset Allocation. Investments guarantee that they are

financially prepared to handle such unforeseen events.

According to the Social Enterprise Development Partnership Inc., (2019)

OFWs feel both guilt and shame for not being with their families oftentimes, which

is why they tend to overindulge their loved ones. Both the BSP and PSA surveys
reveal that only 7.8% of OFW households use their money for investing. While

there are certain factors that influence where and how they allot their funds, OFWs

need to have the knowledge and guidance on how to grow their money.

Kiyosaki (2017) stated in his book that "It's not how much money you make,

but how much money you keep, how hard it works for you, and how many

generations you keep it for." It's pointless to have a high salary or income if only

going to spend it on things that aren't regarded as assets and do not generate

income. Investing is a better option not only because it generates income but also

because it helps to circulate money within the financial institution. However, the

majority of OFWs believe that investing requires a thorough understanding of the

stock market and that is why they should have the knowledge about the investment

practices. As a result, intimidation sets in, causing the Overseas Filipino Workers

to hesitate away from making investments.

The Researchers conduct generally the Investment Practices of Overseas

Filipino Workers in Taytay, Rizal. This study will serve as guide as well as to learn

more ideas about investments and to have a successful investing.

Background of the Study

According to Ang et al. (2019) Investment practices of Overseas Filipino

Workers (OFW) are referred to as personal finance management. Investment has

a goal of generating income and increasing the value over time. Undoubtedly,

money transfers from OFW significantly improve the Philippine state economy by
increasing foreign exchange. This remittance also has a big help to each of the

families left in the Philippines to have money for expenses. The money goes to the

family for them to be able to provide their necessities like shelter, finance expenses,

education, and other needs in life.

For Kapellas et al. (2020), this study presents an effort to summarize

evidence on literature about the effect of financial reporting practices on Investment

decisions Regulatory interventions/changes impact financial reporting and thus

play a significant role in the international comparability/usage of financial

statements and as a result on investment decisions.

On the other hand, in the article Ponferreda (2018), the contribution of cash

remittances of OFWs is merely saved. In the interview, there are a lot of OFWs

who become successful and save and invest their money, while others become

rich. Some people come back empty- handed after working aboard. The study

evaluates the financial management of overseas Filipino workers (OFWs),

determining the importance of budgeting, investment, and disbursement. It

concludes that managing financial resources is crucial. OFWs should enhance

their knowledge and improve financial practices.

Meanwhile, the study by Macatangay and Vargas (2021) explores the

investment preferences of OFWs working on the RABIGH PHASE II (RIIPED)

ARAMCO PROJECT in Saudi Arabia. The survey found that lower-income earners

prioritize education, family needs, and modest savings. High-income OFWs

prioritize fixed assets like real estate and bank savings. They lack experience in

stock market investing and lack understanding of other investment strategies.

 However, the study by Alvarez, Cruz, and Espirito Santo (2021) found that

42.2% of respondents were 25 years of age or older, 57.8% were female, 53.5%

were single, 39.4% were college graduates, and 20% had $10,000 in initial

investments. The respondents' investment practices in Teresa were rated as

frequently practiced, with the majority being female, single, and college graduates.

They have knowledge of investment but need financial experts to avoid scams.

Theoretical Framework

This study aims to define investment risk and explain how investment

decisions are made. Although practicing itself is subjective, both subjective and

objective factors have an impact on it. It is essential to examine risk from both

the objective and personal perspective of the investment decisions because risk

is a significant component of any investment.

In recent years, there has been a growing trend in the number of OFW’s

who are becoming interested in investing. They were forced to take a chance by

investing in their human capital assets, developing enterprises, purchasing lots,

building homes, and developing businesses. This was due to the present

economic, pandemic and market developments. These are just a handful of the

financial alternatives available to OFW’s. Overseas Filipino workers are making

sure their hard-earned money will eventually yield positive returns, hoping for a

more stable financial condition and more security in the future.

 The concept of rational choice can be connected to the careful

consideration of investments made by Overseas Filipino Workers. Rational

Choice Theory can apply to a variety of areas, including economics, psychology

and philosophy. This theory states that individuals use their self-interests to make

choices that will provide them with the greatest benefit. People weigh their options

and make the choice they think will serve them best.

Overseas Filipino Workers that are logical or wise in their business

practices tend to be careful and only put their money into ventures that have a

strong chance of long-term market growth, such as the food industry, franchising,

or retail. Though there is a lot of risk involved in this kind of business, some people

also work in finance and money.

 Conceptual Framework

INPUT PROCESS OUTPUT

1. Demographic Profile of
the respondents in terms
of :
1.1 Age;
1.2 Sex;
1.3 Civil Status;
1.4 Number of family
members;
1.5 Monthly Income ;
1.6 country designated
Determined
and;
1.7 Job description The collected data
2. Investment profile of the Investment
respondents: will be gathered
2.1 Savings; Practices of
2.2 Insurance; through the
2.3 Investment Overseas Filipino
Allocation questionnaire checklist
2.4 Investment Risk Workers (OFWs)
3. Assessment of on Google Forms,
investment practices in in Taytay Rizal
terms of:
evaluate, analyze, and
3.1Decision making;
3.2 Behavioral, and;
3.3 Investment control interpret using
4. The significant
difference between the statistical treatment.
Profile and investment
profile
5. The relationship
between the Investment
profile and the Investment
Practices of Overseas
Filipino Workers
6. Challenges and
opportunity experience by
the respondents in terms
of investment profile.

Feedback

Figure 1
A Conceptual framework of Investment Practices of Overseas Filipino Workers in Taytay,
Rizal
Statement of the Problem

This study aims to determine the "Investment Practices of Overseas Filipino

Workers in Taytay, Rizal " Specially, it will answer the following question:

1.What is the Demographic Profile of the respondents in terms of:

1.1 Age;

1.2 Sex;

1.3 Civil Status;

1.4 Number of family members;

1.5 Monthly Income;

1.6 country designated and;

1.7 Job description?

2. What is the investment profile of the respondents:

2.1 Savings;

2.2 Insurance;

2.3 Investment Allocation and;

2.4 Investment Risk?

3. How the respondents assess the investment practices in terms of:

3.1Decision making;

3.2 Behavioral, and;

3.3 Investment control?

4. Is there a significant difference between the Profile and investment profile?

5. Is there a relationship between the Investment profile and the Investment

Practices of Overseas Filipino Workers?

6. What challenges and opportunity experience by the respondents in terms of

investment profile.

Hypothesis

The researchers will test the null hypothesis that:

1. There is no significant difference between the Profile and investment profile

and;

2. There is no relationship between the Investment profile and the Investment

Practices of Overseas Filipino Workers

Scope and Limitations

The study aims to determine the investment practices of overseas

Filipino workers in Taytay, Rizal. The researchers gathered 2,605 OFWs with

data who are residents of Taytay Rizal. The researchers use the slovins

formula to get the number of respondents that participate in the study. The

researcher gets a 342 answer after computing the data so 342 will participate

in this study. The data collection came from the Municipal Planning and

Development Office. The respondents will be grouped according to age, sex,

civil status, position, monthly income, types of investment, savings, investment

allocation, and investment risk. Further, the researchers will use the

descriptive method with the questionnaire checklist through google form as

the primary source of data.

Significance of the Study

 Investors - This study also benefits and helps the investors to decide

where to invest

Researcher - This study helps the researchers gain more knowledge

about investment practices.

Future Researcher- It can serve as their related literature.

Overseas Filipino workers- This study will help the overseas Filipino

workers in allocating their earnings wisely not just for personal use but

also for other important purchases, such as education. OFWs' respective

family members and loved ones- This will help them by managing the

money carefully, they may do more than just invest it not only by Overseas

beginning to save but also by making other substantial investments.

Definition of Terms

Asset allocation – it refers to distributing or allocating your money in

different asset classes. It can also reduce the risk associated with your

investments.

Bangko Sentral ng Pilipinas (BSP)- Is the central bank of the

Philippines. They are the one who maintain the price stability and promote

monetary stability and the convertibility of the peso.

Diversification – is the process of putting your money or funds in different kinds

of investment.

Foreign exchange - exchanging the currency of one country for another at

prevailing exchange rates.

Goal setting - is a path that investors want to succeed in life.

Insurance – is a mean of protection from financial loss or possible damaging

effects of something.

Investment – is a process of investing money to earn or gain profit

Investment Practices - means the investment objectives and fundamental

investment policies and restrictions of a respective Borrower as set forth in such

Borrower's Prospectus.

Overseas Filipino Workers (OFWs)- it's referring to individuals with Filipino

citizenship who have temporarily lived and worked outside the Philippines for a

limited period of employment.

Philippine Statistics Authority (PSA)- signifies its commitment to provide

timely and quality statistics necessary for decision making in all aspects of

Filipino life.

Risk assessment - the process of identifying what hazards exist or may appear

in the work.
 Chapter 2

METHODOLOGY OF RESEARCH AND SOURCES OF DATA

This chapter includes research method, setting of the study, subject of the

study, source of data, research procedure and statistical treatments.

Research Method

This study will use descriptive methods and statistical analysis to determine

the investment practices of Overseas Filipino Workers in Taytay Rizal.

According to Williams (2007), descriptive research is research design used

to examine the situation involving identification of attributes of a particular

phenomenon based on an observational basis.

Descriptive method of research is to gather information about the present

existing condition. Since this study is focused on the perception or evaluation of

the consultancy firm's effective human resource management, the descriptive

method is the most appropriate method to use. Creswell (1994). The researchers

used descriptive methods to monitor and describe the behavior of OFW towards

investment practices without altering it.

Statistical analysis is the collection and interpretation of data in order to

uncover patterns and trends. It is a component of data analytics. Statistical analysis

can be used in situations like gathering research interpretations, statistical

modeling or designing surveys and studies. Contributor, T. (2020).

The researchers use statistical analysis to gather data through a

questionnaire checklist and calculate it using computational techniques. Moreover,

the researchers directly collected relevant data and information through primary
sources, especially surveys, and then analyzed and interpreted it, which contributed

to the originality and reliability of the study.

Setting of the study

This study will be conducted in the province of Rizal, municipality of Taytay.

Taytay is a small city in the province of Rizal, Philippines, situated quite close to

the Great Manila urban area, about 15 miles south of Antipolo city. There are about

one-third of a million people living in Taytay, and it is a small commercial and

industrial spot famous for its textiles, clothes, furniture, etc. Taytay is also a

destination for shoppers, and there are a large number of shopping malls and

markets in the city. Taytay is also known as an education center, with a large

university and a few public and private colleges located there. Taytay Rizal has 5

barangays: Dolores, Muzon, San Isidro, San Juan, and Sta Ana.
 Figure 2

Map of Taytay Rizal

Subject of the study

The subject of the study will be 342 Overseas Filipino Workers in Taytay,

Rizal. Taytay Rizal has 5 barangays: Dolores, Muzon, San Isidro, San Juan, and

Sta Ana.

Sources of data

The primary sources of data that will be use by the researchers in the study

is the questionnaire checklists through Google form. The first part of the

questionnaire consisted of the respondents' profiles, and the second part will be

the investment practices of Overseas Filipino Worker (OFW) families.

Secondary data will be gathered from the internet, including literature and

studies linked to the study.

Research Procedure

In conducting the study, the researchers formulated three sides for the study

to choose from. Among the three titles, the "Investment Practices of Overseas

Filipino Workers in Taytay, Rizal" has been approved to be the tide of the study that

the researchers have worked on

After the site has been approved, the researchers were also given the chance

to choose their respective adviser who will guide and help them while doing the

study.

After that, the researchers started formulating the Chapters 1 and 2 of the

study. After the research instructor checked the draft of Chapters 1 and 2 they were

subjected to a proposal defense

 After the proposal defense, the researchers will begin working on the

revisions of the first two chapters. The researcher goes to their chosen municipality

to get the number and list of their respondent in every barangay. After that, the

researcher does questionnaire checklist that they are going to distribute to the

respondents. After the distribution and the retrieval of questionnaires, the responses

are going to tally, compute, tabulate, analyze, and interpret in accordance with the

appropriate statistical treatment.

Statistical Treatment

The following statistical treatments will be use to analyze and interpret the

data.

1. To determine the respondent’s profile, the researchers use

frequency, percentage, and distribution.

2. To recognize the OFW’s investment practices, the weighted

mean will be use.

The Five-Point Likert Scale will be use to interpret items in the
questionnaire.

Scale Range Interpretation

5 4.20- 5.00 Always

Practiced

3.40-4.19
4 Frequently
Practiced

3 2.60- 3.39 Sometimes

Practiced

2 1.80- 2.59 Rarely

Practiced

1 1.00 - 1.79 Never

Practiced