Spending Behavior of DepEd Personnel on the Use of Local Credit Card: Basis for Personal Financial Plan

Economic growth is driven by rising card payments. According to the study performed by Zandi et al. (2013), cards help stimulate growth for economies. Cards provide customers with convenient and secure access to their funds. Greater usage of electronic payments added $983B in global economic growth from 2008 to 2012. Whereas, electronic payment contributed 0.8 percent increase in gross domestic product in emerging countries and 0.3 percent increase in GDP in developed markets. The economy is unburdened from papers and contribution is added to GDP. As credit card consumption increases, it decreases the amount of cash circulated and ensures that economic activities are registered, and all monetary contributions are recorded in the economic system. As tax revenues increase, the growing economy also brings together new business opportunities and prevents unemployment. Last November 2021, the Credit Card Association of the Philippines (CCAP), celebrated over four decades of its existence. CCAP provides Filipinos with better access to credit cards (The Philippine Star, 2021). As this complements the goal of Bangko Sentral ng Philippines (BSP), transforming the country from a cash-heavy to a cash-lite economy. The BSP aims to convert 50 percent of financial transactions in the country to digital form and raise the number of Filipino adults with bank accounts to 70 percent of the population by 2023, under its Digital Payments Transformation Roadmap. BSP Media and Research – Speeches (2020) has rolled out initiatives toward providing consumers with an efficient, safe, and inclusive payment ecosystem, with the COVID-19 pandemic serving as the catalyst. From percent last 2013, the volume of financial transactions done electronically leaped to 20 percent in 2020. According to Surtida (2021) issuers will continue to partner with the financial consumers and remain committed and aligned with the thrust of regulations, to realize a better digitized and financially inclusive Philippine economy. Moreover, mentioned on their 41st organization virtual anniversary celebration that, issuers are keen to introduce further improvements in process and customer experience related to card issuance, including making transactions more secure. Further, Republic Act No. 1080 also known as Philippine Credit Card Industry Regulation Law (Credit Card Law) governs all credit card issuers, acquirers, and all credit card transactions and aims to align with global best practices and promote an efficient payment system (Villaraza, et.al 2021). All options, perks, and other promotional offers concerning the use of credit cards in the Philippines are governed by this law and also leaned upon by further discussions in this study. This law’s Section 19 protects credit card holders and users from harassment or unfair collection practices as defined by BSP rules and regulations. The Bangko Sentral’s figures show that the entire amount of credit card debt held by the Philippine banking system is Php 157.394 billion, of which Php 15.141 are classified as non-performing These statistics are highly concerning, and numerous websites online offer advice on how to cut back on or pay off credit card debt. To recognize the genuine value and measure of a credit card, it is necessary to comprehend credit cards and how they operate (Domingo, 2023). Cash is no longer king, consumers have embraced digital payments as a result of the pandemic (Islam, 2021). The pandemic opens consumers to an easier and more convenient way of handling cash. The world has changed dramatically and so as the consumers. Moreover, as stated by HSBC PH (2021), banks are unable to assess how well cardholders can manage debt if they don’t have a credit history. Building up a good track record of paying off debt is possible through the help of a credit card. Staying within their limit and making at least the minimum payment each month. Applying for a mortgage on larger loans will prove it the cardholder is responsible for handling debts. Credit card holders may be harmed if they will not follow the credit card agreements. The credit card offers reward points or miles that credit card holders can redeem for travel, gift cards, and many more. While having an easier and more comfortable way of buying, they also avail those benefits that credit card company offers. Rebates or cash back are among the popular offers of credit cards to its holders. They offer minimal charge fees and interest while having rewards rate. Rewards points earned can be used in restaurants, groceries, and even in gasoline stations. Most cash back credit cards also offer great cash back welcome bonuses to new cardholders. Spending money regularly in certain retailers, the option of using a credit card is also an advantage for enhanced rewards, discounts, and perks. It is safer to use a credit card in paying than cash and debit cards. Carrying a huge amount of cash when purchasing somehow makes your life at stake and prone to fraud and losses. There are cases where money is missing from their debit card instantly. When a credit card is used fraudulently, notifying the credit card company of the fraudulent transactions, while the matter is under investigation, credit card holders are not forced to pay the transactions while the credit card company is still resolving the transaction. The Department of Education’s personnel play a vital role in delivering and ensuring that each learner will receive the adequate learning they must have. From district superintendent, area supervisor, accounting, bookkeeping, teachers, and many more. All have the same goal of promoting every Filipino with complete basic education. These personnel also devote the salaries they received to their daily finances and needs. The increasing cost of living and inflation brings alarm to everyone. As Click (2021) mentioned that APDS Task Force Resolution No. 6, s. 2021 has clarified the rationale and full implementation of the 15-30 salary release scheme in the Department of Education. The new salary scheme for the DepEd Personnel will be received every 15th and 30th of the month. It was approved and implemented last January 2022 to all DepEd personnel nationwide upon the recommendation of the DepEd central office. To supply their necessities while waiting for their upcoming salaries, personnel opt to apply for credit cards, where the payment method is friendly. They use this as an alternative mode of payment in groceries, department stores, and other establishments which allow them to use the credit line given to them. In the province of Camarines Norte, particularly in the municipality of Daet, establishments and companies accept the use of credit cards. The most common credit card providers are Banco De Oro (BDO), SM Mall, SM Savers, LCC Department Store, Bank of the Philippine Islands (BPI), and Citi Bank. They have almost the same perks and promotional offers which entice credit card holders to use their cards. Comparing the current situation of the abovementioned DepEd teachers, it was reported that Filipino-public school teachers owe a total of Php 319 billion in debt to private and public lending financial lending institutions (Web Report, 2019). This debt behavior is attributed to a lack of financial literacy among teachers, according to the Secretary of Education, Leonor M. Briones. Dep Ed Camarines Norte is under the supervision of the DepEd Secretary of the Philippines, headed by School Division Superintendent, Crestito M. Morcilla Therefore, based on the mentioned debt above, DepEd personnel’s debt is included and part of that. As one of the DepEd personnel, the researcher believes that conducting this study is necessary and critical. This study will help the researcher know more about spending behavior and share it with the young minds of students and other DepEd personnel, who are not yet a holder of any credit cards. The goal of this research is to measure the spending behavior of the DepEd personnel on the use of credit cards. In addition, the researcher wants to know if the profile of the respondents has something to do with their spending Behaviour, and eventually generate an output to serve as a possible intervention to assist them in enhancing their spending Behaviour.