Leading life insurer Pru Life UK has commissioned a comprehensive study to assess the financial health and behaviour of Filipino Muslims. This move 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 7 million, the majority of whom reside in Mindanao, there is a pressing need to uplift the financial well-being of this community. 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. Through this study, Pru Life UK hopes to better understand the market dynamics and challenges faced by this segment, particularly in regions where most of the Filipino Muslims reside, namely the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) and the Zamboanga Peninsula.
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 behaviour: 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 3 million out of the estimated 7 million Muslim Filipinos.1
- Spending habits: Ethical values significantly influence the financial decisions of Muslim families, with a preference for real assets over financial intermediaries.
- Priorities: Healthcare (58%), providing for family needs (51%), and education ranks (47%) 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 10) expressed a desire for Shari’ah-compliant insurance and investment options that can help secure their financial future without compromising their beliefs.
The commissioning of the research supports the efforts of the government, through the interagency Islamic Finance Coordination Forum, to develop the Philippine Islamic finance system.
In May 2024, the Insurance Commission released the first regulation for Takaful Window operation. Takaful is an Islamic insurance alternative that is compliant with Shari’ah rules and principles.
Atty. Paul Mandal, Pru Life UK SVP & Chief Legal, Government Relations, and Sustainability Officer shares, “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.”
