Conference Proceedings of Educational Paradigm, Systems and Strategies

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Research Paper

DECISION MAKING, ATTITUDES, AND BEHAVIOURS ON FINANCIAL

LITERACY AMONG FILIPINO COLLEGE STUDENTS: FACTORIAL AND
CORRELATIONAL ANALYSES

Abstract

Researches revealed that there is an urgent need for financial literacy (Hung, Parker, & Yoong,
2009; Nidar & Bestari, 2012; Mihalčováa, Csikósová, & Antošovác, 2014; Agarwal et. al, 2015).
However, in the Philippine context, financial literacy has not been extensively explored (Leano,
2006). This research study aimed at analyzing the reliability and validity of Filipino college
students' financial literacy based on Questionnaire for Assessing Financial Literacy (QAFL), a 12-
item Likert scale with acceptable internal consistency (α = 0.74) developed by (Čonková, 2014).
Specifically, this study aimed to analyze the relationship between students' decision making,
attitudes, and behavior in the financial market. It utilized a simple random sampling technique. A
total of 140 Filipino college students participated in this study. SPSS was used for statistical data
analysis. Results of the reliability analysis for Cronbach's Alpha if item deleted showed an overall
acceptable range (α =.722-.775) and Cronbach's Alpha based on standardized items (α = 0.750).
Results of the factor analysis revealed an appreciable factor loading = .49 up to the high factor
loading = .82 construct validity. Results of the correlation analysis revealed that the relationships
were statistically significant as follows: decision making and attitudes toward finances (rs = 0.52),
decision making and financial behavior (rs = 0.49), attitudes and financial behavior (rs = 0.45).
Thus, it is concluded that financial literacy is relevant to aid students in addressing issues
affecting their decision making, attitudes, and behaviors in the financial market.

Key words: Financial Literacy, Filipino https://doi.org/10.21016/5.062022.19.027O

College Students, Factorial Analysis,
Correlational Analysis How to Cite: Cardenas, N.C., Fonte, J.G.,
(2019) Decision Making, Attitudes, And
Authors’ Information: Behaviours On Financial Literacy Among
Corresponding Author: Nicky C. Cardenas Filipino College Students: Factorial And
ORCID: Correlational Analyses. Conference
E-mail address: [email protected] Proceedings of Educational Paradigm, System
Institution: Colegio de San Juan de Letran and Strategies. Vol05: Iss01: Pg01.
https://doi.org/10.21016/5.062022.19.027O
Co-Author: Julieta G. Fonte
ORCID: Copyright: © 2019 Cardenas, N.C., Fonte,
E-mail address: [email protected] J.G.
Institution: Polytechnic University of the
Philippines This work is licensed under a Creative
Commons Attribution-Noncommercial 4.0
Paper Reference Number: MA10OE027O International License.

Presented in the 5th International Conference in Educational Paradigm, Systems and Strategies (ICEPSS)
Peer reviewed under the responsibility of International Research Enthusiast Society Inc.
© 2019 The Authors
 Conference Proceedings of Educational Paradigm, Systems and Strategies
Volume 5 Issue 1
ISSN Online 2651-7264

Introduction
In 2008, former President George Washington Bush of the United States of America made financial
literacy a national priority by creating "The President's Advisory Council on Financial Literacy" (Iowa
State University 2008; as cited in Morris and Koffi, 2015). The significance of financial literacy has
been acknowledged by the ECOFIN Council of the European Union at a global level (Pastoráková,
2011; as cited in Mihalčováa, Csikósová, & Antošovác, 2014). The Department of Finance Canada
(2011) recognized the urgency of financial literacy as well. Previous researches all over the world
revealed that there is an urgent need for financial literacy in various aspects for specific target
respondents in South Africa (Fatoki, 2014), Pakistan (Arif, 2015), India (Agarwal et. al, 2015; Naidu,
2017), Australia (Gallery, et al., 2011; Agnew, et al., 2013), Malaysia (Boon, Yee, & Ting, 2011)
among others. Some scholars have seen the need and significance of developing a standard scale in
measuring financial literacy (Hung, et al., 2009; Kempson, 2009; Huston, 2010).

There has been a growing interest also on financial literacy among young adults or university students.
The 2013 Survey of Consumer Finances provides extensive data on the ways young adults in the
United States are participating in the financial market (Peach & Yuan, 2017). In Europe, findings
confirmed that small scale training intervention's impact positively the financial knowledge among
university students (Brugiavini, et al., 2015). Other scholars explored university students' financial
literacy in Africa (Louw, Fouché & Oberholzer, 2013), Slovakia (Pružinsky & Mihalčová, 2014)
Indonesia (Nidar & Bestari, 2012), Malaysia (Falahati & Paim, 2011) among others. However, in the
Philippine context, studies regarding financial literacy among university students have been scarce.
Thus, this research study aimed at analyzing the reliability and validity of Filipino college students'
financial literacy based on Questionnaire for Assessing Financial Literacy (QAFL), a 12-item Likert
scale developed by (Čonková, 2014). Specifically, it analyzed the decision making, attitudes, and
behaviours as variables on financial literacy among Filipino college students by way of factorial and
correlational analyses.

Methodology

Research Design
This study used descriptive-factorial and descriptive-correlational approaches. SPSS was used for the
descriptive statistical analysis. The researchers administered the QAFL survey instrument among 140
Filipino college students major in internal auditing, business, and finance participated in this study from
two (2) Manila-based schools in different levels from (1st year – 4th year) as target participants of the
study. It utilized a simple random technique. Participants of the study were oriented and given
informed consent before answering the survey instrument QAFL. The researchers modified the scale
point system, thereby using a five-point Likert scale, 1-strongly disagree, 2- disagree, 3-neutral, 4-
agree, and 5-strongly agree to measure accurately students' financial literacy levels on decision
making, attitudes, and behaviours in the financial market. In other words, the survey instrument implies
the higher the students' score, the higher they are financially literate on each item of QAFL.

The Survey Instrument

This study used the Questionnaire for Assessing Financial Literacy (QAFL), a 12-item Likert scale with
acceptable internal consistency (α = 0.74) developed by (Čonková, 2014). The utilization of this scale
highlighted the variables decision making, attitudes, and behaviours in the financial market necessary
in measuring the financial literacy levels of Filipino college students.

QAFL has undergone five (5) stages of development: 1) modification of the scale pointing system, 2)
self-administration of the survey questionnaire QAFL among 140 Filipino college students, 3) use of
SPSS statistical analysis on scale reliability test, 4) construct validity by factor loadings and, 5)
correlational analysis for the variables: decision making, attitudes and behaviours in the financial
market.

Results And Discussion

Descriptive Statistics
Results of the mean scores in Figure 1 revealed that item Q7 "Did you invest of save money last
year?" got the lowest mean score of 2.08, while item Q1 “Before buying something, I carefully consider
whether I can do it.” got the highest mean score of 4.16. Respondents got a total mean score of 3.11
(moderately financial literate). In other words, results implied that Filipino college students are not
actively engaging in investing money but they are critical in buying financial products.
How to cite: Cardenas, N.C., Fonte, J.G., (2019) Decision Making, 2
© 2019 The Authors Attitudes, And Behaviours On Financial Literacy Among Filipino College
Students: Factorial And Correlational Analyses. Conference Proceedings
of Educational Paradigm, System and Strategies. Vol05: Iss01: Pg01.
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 Conference Proceedings of Educational Paradigm, Systems and Strategies
Volume 5 Issue 1
ISSN Online 2651-7264

Figure 1: Item Statistics

Item-Statements Mean Std. Verbal

Deviation Interpretation
Q1. Before buying something, I carefully consider 4.1571 .97650 Highly financial
whether I can do it. literate
Q2. I pay my bills on time. 3.9643 .96269 Highly financial
literate
Q3. I carefully monitor and control my accounts. 3.4143 1.22906 Moderately
financial literate
Q4. Did you take a loan to cover current expenses in the 3.2071 1.12842 Moderately
last 12 month? financial literate
Q5. I set long-term goals and try to achieve them. 3.6429 1.24121 Highly financial
literate
Q6. I am responsible and I prepare my personal budget. 2.4929 .98548 Lowly financial
literate
Q7. Did you invest of save money last year? 2.0786 1.20591 Lowly financial
literate
Q8. I find it more satisfying to spend money than to 2.6500 1.26903 Moderately
save it for the long term. financial literate
Q9. I tend to live for today and let tomorrow take care of 2.5500 1.14002 Moderately
itself. financial literate
Q10. Money is there to be spent. 2.8643 1.27065 Moderately
financial literate
Q11. I choose financial products after gathering 4.1429 .91802 Highly financial
adequate information. literate
Q12. I choose financial products after I look around in 2.1929 1.26887 Lowly financial
the market, got independent information, and requested literate
for piece of advice.

*Legend: 4.5 - 5 = Extremely financial literate

3.5 - 4.49 = Highly financial literate
2.5 - 3. 49 = Moderately financial literate
1.5 - 2.49 = Lowly financial literate
0 - 1.49 = Very lowly financial literate

*Grand Mean = 3.11

Figure 2: Reliability Statistics

Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items

.759 .750 12

Results of the reliability analysis for Cronbach's Alpha based on standardized items revealed (α =
0.750) as shown in Figure 2 and Cronbach's Alpha if item deleted revealed an overall acceptable
range of (α = .722 - .775) as shown in Figure 3. Thus, this implied that the QAFL survey questionnaire
is reliable. All items revealed acceptable internal consistency.

How to cite: Cardenas, N.C., Fonte, J.G., (2019) Decision Making, 3

© 2019 The Authors Attitudes, And Behaviours On Financial Literacy Among Filipino College
Students: Factorial And Correlational Analyses. Conference Proceedings
of Educational Paradigm, System and Strategies. Vol05: Iss01: Pg01.
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 Conference Proceedings of Educational Paradigm, Systems and Strategies
Volume 5 Issue 1
ISSN Online 2651-7264
Figure 3: Item-Total Statistics

Item- Scale Mean Scale Corrected Item- Squared Cronbach's

Statements if Item Variance if Total Correlation Multiple Alpha if Item
Deleted Item Deleted Correlation Deleted

Q1 33.2000 45.888 .335 .230 .749

Q2 33.3929 46.068 .327 .288 .749
Q3 33.9429 41.493 .522 .400 .726
Q4 34.1500 41.769 .564 .402 .722
Q5 33.7143 41.385 .522 .432 .726
Q6 34.8643 48.622 .122 .113 .769
Q7 35.2786 42.418 .471 .319 .733
Q8 34.7071 40.870 .542 .392 .723
Q9 34.8071 42.128 .530 .395 .726
Q10 34.4929 41.460 .501 .430 .729
Q11 33.2143 48.817 .125 .055 .767
Q12 35.1643 47.361 .131 .041 .775

Figure 4: Eigenvalue for Factorial Loadings

How to cite: Cardenas, N.C., Fonte, J.G., (2019) Decision Making, 4

© 2019 The Authors Attitudes, And Behaviours On Financial Literacy Among Filipino College
Students: Factorial And Correlational Analyses. Conference Proceedings
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Figure 5: Rotated Component Matrixa

Item-Statements Component
1 2 3 4
Q1 .797
Q2 .817
Q3 .655
Q4 .556 .488
Q5 .665
Q6
Q7 .669
Q8 .710
Q9 .702
Q10 .721
Q11 .769
Q12 .813

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.a
a. Rotation converged in 5 iterations.

To establish the construct validity of the QAFL factor analysis was used by the researchers. Figure 5
presents the Extraction Method: Principal Component Analysis, Rotation Method: Varimax with Kaiser
Normalization, with rotation converged in 5 iterations that revealed seven (7) factor loadings. Overall,
the results of the factor analysis revealed an appreciable factor loading (= .49 up to the high factor
loading = .82) construct validity. Items with <0.40 were removed to establish the validity of factorial
loadings.

Specifically, the first factor showed one (1) loaded appreciably (. 56) out of 12 items and six (6) loaded
with the highest loadings (>.7) which are indicative of a) decision making for future finances on saving
and preparing budget/money for long-term goals (items 3, 4 and 5), attitudes toward financial matters
on spending money (items 7 and 8) and, current financial behaviours on buying something and paying
bills (items 9 and 10). The second factor showed zero (0) loaded appreciably (.4-.6) and two (2)
loaded with the highest loadings (>.7) which are indicative of b) critically choosing of financial products
by gathering adequate information (items 1 and 2). The third factor showed one (1) loaded appreciably
(.4-.6) and one (1) loaded with the highest loading (.82) which is indicative of availing of loans (item
12). The fourth factor showed zero (0) or none loaded appreciably (.4-.6) and one (1) loaded with the
highest loading (.77) which is indicative of d) monitoring and controlling personal accounts (item 11).

Figure 6. 1: Correlations

Decision for Future Attitudes toward

Finances Finances
Pearson Correlation 1 .516**
Sig. (2-tailed) .000
Decision Making for Sum of Squares and
126.136 53.201
Future Finances Cross-products
Covariance .907 .383
N 140 140
Pearson Correlation .516** 1
Sig. (2-tailed) .000
Attitudes toward Sum of Squares and
53.201 84.237
Finances Cross-products
Covariance .383 .606
N 140 140

How to cite: Cardenas, N.C., Fonte, J.G., (2019) Decision Making, 5

© 2019 The Authors Attitudes, And Behaviours On Financial Literacy Among Filipino College
Students: Factorial And Correlational Analyses. Conference Proceedings
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Figure 6. 2: Correlations

Decision for Future Current Financial

Finances Behavior

Pearson Correlation 1 .486**

Sig. (2-tailed) .000
Decision Making for Sum of Squares and
Future Finances 126.136 44.104
Cross-products
Covariance .907 .317
N 140 140
Pearson Correlation .486** 1
Sig. (2-tailed) .000
Current Financial Sum of Squares and
Behavior 44.104 65.391
Cross-products
Covariance .317 .470
N 140 140

Figure 6. 3: Correlations

Attitudes toward Current Financial

Finances Behavior

Pearson Correlation 1 .454**

Sig. (2-tailed) .000
Attitudes toward Sum of Squares and Cross-
Finances 84.237 33.729
products
Covariance .606 .243
N 140 140
Pearson Correlation .454** 1
Sig. (2-tailed) .000
Current Financial Sum of Squares and Cross-
Behavior 33.729 65.391
products
Covariance .243 .470
N 140 140

Results of the correlation analysis revealed positive relationships that were statistically significant as
follows: a) decision making and attitudes toward finances (rs = 0.52), b) decision making and financial
behaviour (rs = 0.49), c) attitudes and financial behavior (rs = 0.45).

Conclusion

This research study aimed at analyzing the reliability and validity of Filipino college students' financial
literacy based on Questionnaire for Assessing Financial Literacy (QAFL), a 12-item Likert scale with
acceptable internal consistency (α = 0.74) developed by (Čonková, 2014). Specifically, this study
aimed to analyze the relationship between students' decision making, attitudes, and behavior in the
financial market. Results of factorial analysis revealed the factors that affect Filipino college students'
financial literacy based on the following: a) decision making for future finances on saving and
preparing budget/money for long-term goals (items 3, 4 and 5), attitudes toward financial matters on

How to cite: Cardenas, N.C., Fonte, J.G., (2019) Decision Making, 6

© 2019 The Authors Attitudes, And Behaviours On Financial Literacy Among Filipino College
Students: Factorial And Correlational Analyses. Conference Proceedings
of Educational Paradigm, System and Strategies. Vol05: Iss01: Pg01.
Member: Indexed in: https://doi.org/10.21016/5.062022.19.027O
 Conference Proceedings of Educational Paradigm, Systems and Strategies
Volume 5 Issue 1
ISSN Online 2651-7264
spending money (items 7 and 8) and, current financial behaviours on buying something and paying
bills (items 9 and 10), b) critically choosing of financial products by gathering adequate information
(items 1 and 2), c) availment of loans (item 12) and, d) monitoring and controlling personal accounts
(item 11). Also, the results of the correlation analysis revealed that relationships were statistically
significant as follows: decision making and attitudes toward finances (rs = 0.52), decision making and
financial behavior (rs = 0.49), attitudes and financial behavior (rs = 0.45). Thus, it is concluded that
financial literacy is relevant to aid students in addressing issues affecting their decision making,
attitudes, and behaviors in the financial market. It is suggested that intervention on business marketing
and financial courses would be given to Filipino college students to increase positively their financial
literacy for their benefits.

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