Cost Management Practices and Financial Literacy
Discover key cost management practices and the role of financial literacy in navigating rising healthcare costs in the Philippines. Learn how businesses and individuals can optimize spending, leverage fintech solutions, and enhance financial decision-making to achieve long-term stability.
QUANTITATIVE RESEARCH
Realyn Manalo
3/10/20254 min read
With healthcare benefit costs in the Philippines expected to continue rising at a double-digit rate in 2025, it is becoming more important for both organizations and individuals to manage their costs effectively. As a result, businesses must find ways to control and reduce spending to keep their finances healthy. This is especially challenging for companies that provide healthcare benefits to their employees, as they need to balance higher costs with the goal of offering fair and sustainable benefits.
Along with cost management, financial literacy is also crucial. Understanding basic financial concepts, such as budgeting, forecasting, and risk management, helps both business leaders and employees make better decisions in the face of rising healthcare costs. Because of this, organizations with strong financial knowledge are better able to plan for future costs, adjust their strategies, and protect their financial well-being. In the end, as healthcare costs keep rising, making smart financial choices will be key to ensuring that businesses can handle these increases without sacrificing other important financial needs.
Who Can Use These Topics?
These research topics are ideal for students and professionals pursuing:
College Programs:
Business Administration (Major in Financial Management)
Accountancy
Economics
Senior High School Strands:
ABM: Perfect for studies on investment strategies and financial management.
GAS: Best for interdisciplinary finance research.
Why This Topic Needs Research
Despite technological advancements, gaps in financial literacy and cost management persist among individuals and small business owners. Key areas necessitating further research include:
Limited Financial Education: A significant portion of the population lacks formal financial education, leading to inadequate budgeting and financial planning skills.
Regulatory Uncertainties: Rapid changes in financial regulations, especially concerning digital finance and taxation, create challenges for MSMEs striving to remain compliant.
Barriers to Fintech Adoption: While digital financial tools offer substantial benefits, obstacles such as cost, lack of awareness, and resistance to change hinder their widespread adoption among small businesses.
Economic Pressures: Factors like inflation and supply chain disruptions complicate cost management, underscoring the need for enhanced financial literacy to navigate these challenges effectively.
Current Industry Data and Trends
Global
Fintech Adoption and Cost Management: A World Bank report highlights that digital financial services can bridge the financing gap for SMEs by providing alternative funding sources and improving access to traditional financial products.
Financial Literacy and Business Success: The Organisation for Economic Co-operation and Development (OECD) has found that businesses with higher financial literacy levels are more likely to survive economic downturns, as they are better equipped to manage credit and optimize operational costs.
Philippines
Financial Literacy Levels
A 2024 study by the Bangko Sentral ng Pilipinas (BSP) revealed that only 2% of Filipino adults correctly answered all six basic financial literacy questions, indicating a significant gap in financial education.
The same study found that young adults (18 to 39 years old) scored the highest in financial literacy, with a score of 0.742, compared to middle-aged individuals (0.656) and senior citizens (0.623).
Source: Young Filipino Adults Are More Financially Literate, Study Shows
Cost Management Challenges for Small Businesses
Micro, small, and medium enterprises (MSMEs) constitute 99.5% of all businesses in the Philippines, yet many struggle with financial management due to limited financial literacy.
The BSP's 2021 Financial Inclusion Survey indicated that only 2% of Filipino adults were able to correctly answer all six basic financial literacy questions, underscoring the need for improved financial education among business owners.
Feasibility & Challenges by Target Group
1. Micro-entrepreneurs and Small Business Owners
Feasibility: High – Small business owners are relatively accessible through government programs, trade associations, and fintech provider databases.
Challenges: Moderate – Many SMEs may be unwilling to share financial details due to privacy concerns or fear of judgment about their financial practices.
2. Self-employed Professionals (Freelancers, Gig Workers)
Feasibility: Moderate – Online communities, social media groups, and freelancing platforms make it easier to reach this group.
Challenges: High – Many freelancers have informal financial structures, making it difficult to assess standardized cost management practices.
3. Financial Managers of Small Enterprises
Feasibility: Low – This group is harder to access, as financial managers may be bound by company policies on sharing financial information.
Challenges: High – Data privacy regulations and reluctance to disclose company financial strategies can pose significant obstacles to research.
Further Research on Cost Management
Practices and Financial Literacy
As future researchers, you have the opportunity to shape the field of cost management practices and financial literacy by identifying emerging challenges and opportunities. In the face of rising economic pressures, especially healthcare costs in the Philippines, understanding how individuals and businesses manage expenses and apply financial knowledge is essential for sustainable financial health.
What’s Already Known:
Cost management and financial literacy are both essential for maintaining financial stability in today’s economic environment. Businesses, particularly those offering employee benefits, face increasing pressure to balance rising healthcare costs while maintaining profitability. Financially literate individuals and organizations are better equipped to apply strategies such as budgeting, forecasting, and risk analysis to manage costs effectively. However, gaps in financial education and limited adoption of digital financial tools continue to hinder optimal decision-making, particularly among micro, small, and medium enterprises (MSMEs).
What Needs Further Study:
Impact of Financial Literacy on Organizational Cost Saving Strategies: There is limited research on how financial literacy among business owners and managers affects their ability to implement cost saving strategies. Future studies should investigate whether higher financial knowledge translates to more effective budgeting, cost control, and long term financial planning, particularly in industries affected by rising healthcare expenses.
Challenges in Adapting to Financial and Regulatory Changes: With evolving financial policies and tax regulations, many small businesses struggle to stay compliant. Research is needed to evaluate how regulatory uncertainty affects cost management practices and what support systems or training programs can help MSMEs adapt efficiently without compromising financial stability.
Behavioral and Technological Barriers to Fintech Utilization: Digital tools offer powerful solutions for managing costs and improving financial literacy, yet their adoption remains low among small businesses. Future research should examine the psychological and social factors such as fear of digital systems, lack of awareness, or perceived complexity that influence resistance to fintech adoption and how these can be addressed through targeted interventions.
🔗 Explore more on this topic in our main article: Top 10 Finance Research Topics in 2025
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