A study commissioned by life insurer Pru Life UK showed that Filipino Muslims remain one of the most underserved groups in terms of financial services, with many of them facing poverty and limited access to conventional banking and insurance.
In addition, researchers said that while many Muslim Filipinos maintain traditional practices such as keeping their savings at home rather than in banks, there is a growing need for financial products that align with Shari'ah rules and principles.
"Through this study, Pru Life UK hopes to better understand the market dynamics and challenges faced by this segment, particularly in regions where most Filipino Muslims reside, namely the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) and the Zamboanga Peninsula," Pru Life said in a statement.
It added that the comprehensive study to assess Filipino Muslims' financial health and behavior is part of Pru Life UK's ongoing commitment to promoting financial inclusion and understanding financially underserved communities in the Philippines.
The research aims to identify gaps in financial services and foster sustainable solutions to address the specific needs of Muslim Filipinos.
"With a Filipino Muslim population of approximately seven million, the majority of whom reside in Mindanao, there is a pressing need to uplift the financial well-being of this community," the insurer added.
The survey commissioned by Pru Life UK provides insightful data on the financial habits and concerns of Muslim Filipino families. The findings highlight that while many Muslim Filipinos maintain traditional practices such as keeping their savings at home rather than in banks, there is a growing need for financial products that align with Shari'ah rules and principles.
Key takeaways from the study include:
Financial behavior: Many Muslim Filipinos prefer avoiding conventional banks due to their prohibition of interest, which is against Islamic principles. As a result, most savings are managed at home. In a study made by international financial services company S&P Global in 2022, about 5% to 6% of the unbanked Filipino population is Islamic, translating to roughly three million out of the estimated seven million Muslim Filipinos.
Spending habits: Ethical values significantly influence the financial decisions of Muslim families, who prefer real assets over financial intermediaries.
Priorities: Healthcare (58%), providing for family needs (51%), and education (47%) rank high on the list of priorities for Muslim Filipino households.
Fears and challenges: Concerns over healthcare emergencies (56%), financial instability (42%), lack of access to insurance, and disasters (41%) are among the top worries.
Financial goals: Many respondents (4 out of 10) desired Shari'ah-compliant insurance and investment options to help secure their financial future without compromising their beliefs.
The research's commissioning supports the government's efforts to develop the Philippine Islamic finance system through the interagency Islamic Finance Coordination Forum.
In May 2024, the Insurance Commission released the first regulation for Takaful Window operation. Takaful is an Islamic insurance alternative compliant with Shari'ah rules and principles.
Atty. Paul Mandal, Pru Life UK SVP & Chief Legal, Government Relations, and Sustainability Officer, shared, "The findings in the study can help the government and the industry better understand the financial needs of the Muslim Filipino population and identify areas for collaboration to drive wider financial inclusion."
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