Why do we click “Add to Cart” late at night? Why do we sometimes feel guilty buying things for ourselves, yet freely spend when it comes to gifts for others or obligations to family? In the Philippines, where financial literacy campaigns are gaining traction and digital financial tools are more accessible than ever, the way Filipinos approach money remains deeply shaped by emotion, culture, and social expectations.

Money decisions aren’t made in a vacuum,  they are filtered through our lived experiences, our upbringing, and the subtle (and not so subtle) cues we receive from our peers, community, and media. Understanding these behavioral roots offers clarity not just for individuals hoping to manage their finances better, but also for institutions building more responsive tools and policies.

When Logic Isn’t Enough: The Cognitive Biases Behind Our Wallets

While many believe their financial decisions are based on reason, behavioral economics shows that we’re often influenced by mental shortcuts and irrational tendencies. For example, anchoring bias can lead someone to believe a ₱50,000 laptop is a good deal simply because they first saw a ₱90,000 model. Similarly, the strong fear of loss, what researchers call “loss aversion,” keeps many Filipinos wary of investment products, even when they offer long-term growth potential.

There’s also present bias, the tendency to favor immediate rewards over future ones. This helps explain the popularity of payday sales and last-minute splurges, despite intentions to save. These behaviors aren’t signs of failure or ignorance, they’re simply human; but they can become traps when left unexamined.

Influence Is Everywhere: How Social Media Shapes Financial Behavior

In today’s hyperconnected world, social influence plays an outsized role in shaping what we value and how we spend. On platforms like TikTok, YouTube, and Shopee Live, viral “budol” hauls and financial advice from influencers can drive mass behavior. Recommendations from so-called “finfluencers”—even if unvetted—often carry more weight than official advisories or certified professionals.

Beyond the screen, peer pressure and family expectations also matter. For many young professionals, major purchases—from smartphones to condos—are shaped not just by need, but by perceived status, success, or fulfillment of social roles. This isn’t necessarily unhealthy, but it underscores how financial decisions are rarely just individual choices.

When Emotions Drive the Purchase: Spending as Self-Soothing

Spending money isn’t always about acquiring goods, sometimes it’s about regulating feelings. Many Filipinos use shopping as a form of emotional reward, control, or healing. A 2024 consumer study observed how certain purchases, especially comfort food, toys, or personalized items, were linked to what researchers described as “healing the inner child”; fulfilling emotional needs left unmet in earlier life.

While these spending habits can be cathartic, they can also spiral into unhealthy coping mechanisms. Recognizing this link doesn’t mean condemning emotional spending, it means understanding it, so we can build better support systems, like savings goals that allow room for joy without destabilizing one’s finances.

How Values Like “Hiya” and “Utang na Loob” Shape Our Finances

In the Filipino context, money is rarely private. Cultural values like hiya (shame) and utang na loob (debt of gratitude) have direct financial expressions. Lending money, covering for someone’s needs, or spending on extended family obligations are often non-negotiable, even when they strain personal budgets.

Generosity is seen as a virtue, but it can also lead to debt, overextension, or pressure to maintain appearances during celebrations or emergencies. In many ways, money becomes a reflection of how people maintain respect, repay kindness, and assert belonging. Financial behavior, then, must be seen in context: it is deeply relational, not just transactional.

If we want better financial outcomes—at both individual and national levels—we must design around how people really behave. This means crafting digital tools, policies, and public education efforts that meet people where they are.

For example, savings apps could draw inspiration from the cultural tradition of paluwagan, providing rotating savings features. Investment platforms could use narrative framing that resonates emotionally, not just technically. Public campaigns could move beyond fear-based messaging to emphasize empowerment, community, and shared growth.

Our relationship with money is personal, emotional, and social. By unpacking the psychological patterns behind how Filipinos spend, save, and invest, we gain insight into what drives both smart choices and risky ones. Financial literacy alone isn’t enough, it must be paired with empathy, cultural awareness, and behavioral insight. Only then can we build systems that truly support the financial well-being of the many, not just the few.

‍