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CHAPTER I
THE PROBLEM AND ITS SETTING

Introduction

In the fast-changing economic environment of today, financial literacy is an important ability for

individuals and industries alike. Financial literacy, the ability to understand and effectively manage financial

matters, is crucial for individuals across all businessman. While the case for literacy is well-established,

there remains a substantial gap situated surrounding how financial behavior among businessmen in rural

area are influenced by their variation in its level of capability from an economic perspective.

In India, as cited in Kumar and Bansal (2018) that many people are not aware and do not have the

basic tools that make the decision in the realm of the economy valuable. Thus, personal savings are low

while debts especially in credit cards are higher than the optimum while investment portfolio’s decision

making is not as complex as it should be. This matter is made worse by issues of illiteracy regarding

finances and more so a lack of capital. Hence significantly influencing small enterprise behavior and

performance (scores).

In the Philippines, for instance, a few issues of concern relate to the levels of financial literacy

among SMEs owners. As highlighted by Remo (2018) ironically many of the SME’s owners are ill equipped

with even very rudimentary financial literacy that hampers the credit access, cash flow management and

overall business growth. Due to the lack of sufficient financial literacy that stems from birth, the funds where

unstable and the role that SMEs can play in the economic development of this country is also limited.

Contrasting the situation in the developed countries where people face different challenges, financial

literacy and proper funding faced significant problems. Increasing the level of financial literacy of these

individuals is, therefore, the way to enhance stability and working efficiency of SMEs in the Philippines.

In Pantukan, Davao de Oro, business owner has huge problems with regard to financial literacy.

This is due to the fact that limited education on the subject is available, along with resources. Mateo, 2019,

shows that most local entrepreneurs struggle to work with financial plans and decisions regarding savings,

plus the investments they will make to sustain and grow their businesses. This is aggravated by a lack of

programs aimed at rendering financial literacy to these unique rural business proprietors. In the absence of

local support, handling of financial resources becomes difficult for such entrepreneurs. Better access to
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focused financial education might significantly improve the financial stability and business success of firms

in this region.

Although financial literacy and behavior have been the subject of extensive research in general and

in the national setting, there is still a huge gap in addressing specific needs among businessmen in the rural

setting of Pantukan, Davao de Oro. To this regard, de Guzman (2021) pointed out that current studies fail to

address the question of how localized financial literacy initiatives affect financial behavior among small-

scale entrepreneurs in such a context. Addressing this gap could provide valuable insights into improving

financial literacy and behavior in similar rural settings. Improved research in this area will, therefore,

contribute to more targeted and hence effective strategies in financial literacy.

Statement of the Problem

The study focused on the Financial Literacy and Financial Behavior among Businessman in

Pantukan, Davao de Oro. This was done by using administered survey instrument.

1. What is the extent of Financial Literacy among businessmen in Pantukan, Davao de Oro in

terms of:

a. Savings;

b. Budgeting; and

c. Investing?

2. What is the level of Financial Behavior among Businessmen in Pantukan, Davao de Oro in terms

of:

a. Purchasing Behavior;

b. Long-term financial goals; and

c. Incidence of debt?

3. Is there a significant relationship between financial literacy and financial behavior among

businessmen in Pantukan, Davao de Oro?

4. What domain of financial literacy significantly influence financial behavior among businessman in

Pantukan, Davao de Oro?

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Hypothesis

The quantitative method of the study tested the following hypothesis

1.There is no significant relationship between financial literacy and financial behavior among

businessmen in Pantukan, Davao de Oro.

2. There is no domain of financial literacy significantly influence financial behavior among

businessman in Pantukan, Davao de Oro.

Review of Related literature

Financial literacy

Financial literacy might be defined as the awareness of concepts such as investment, debt

management, saving or budgeting; it is essentially a basic skill that enables the consumer to make informed

decisions about managing money. As stated by Lusardi and Mitchell (2011), financial literacy is paramount

in the consumer's quest for financial stability as it enables individuals to cope with rather complicated

financial goods and services. Financial literacy also puts the common man in a position to understand the

fundamentals of risk management, goal-setting, and financial planning, which are vital for achieving a long-

term stable financial condition in a more ever-complicated financial environment. Individuals with weak

financial literacy may find making the right decisions very hard, which often leads to problems of debt crisis,

low savings, and an inability to deal with mounting financial crises (Atkinson & Messy, 2012).

Research has shown that financial literacy has a positive effect on several aspects of financial

behavior, including debt management, investment decisions, and saving patterns. Huston (2010) states that

financial literacy is important for one's ability to manage spending and save for the future and stick to a

budget-both essential for financial well-being. For example, a person who understands financial concepts is

less likely to take high-interest loans and is better able to plan for retirement and other life objectives. This

is supported by OECD (2013), which highlights that individuals with higher financial literacy tend to make

proactive financial decisions, leading to better short- and long-term financial outcomes.

Financial literacy is especially important in emerging nations because it affects financial service

utilization and availability. People who are more financially literate are more likely to plan for retirement and

steer clear of expensive financial blunders like excessive borrowing and bad investment decisions,
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according to Lusardi and Mitchell (2014). According to Klapper, Lusardi, and Panos (2015), financial literacy

also has a favorable impact on financial resilience, savings behavior, and financial market involvement.

Financial literacy is crucial for the success of businesses, especially in micro, small, and medium-

sized enterprises (MSMEs). In Veracruz, Mexico, Culebro-Martínez et al. (2024) investigated the

connection between financial conduct, attitude, and knowledge. They discovered that while knowledge and

attitude had no discernible effect on business performance, financial behavior did. This implies that applying

financial concepts to resource management and decision-making is more crucial for entrepreneurs than

simply maintaining an optimistic outlook. According to the study, companies in the industrial sector

especially those run by men have a lower chance of achieving high performance than those in the

commerce sector. The results imply that in order to enhance the performance of their businesses,

entrepreneurs need to cultivate good financial practices and decision-making abilities.

In order to handle one's personal finances, financial literacy is essential. Issues like bankruptcy,

inadequate financial planning, and the incapacity to prepare for emergencies have all been exacerbated in

Malaysia by a lack of financial literacy. A measurement approach for the financial literacy concept is

intended to be validated by this study. It was decided to do an exploratory factor analysis (EFA) to make

sure the research instrument contained the right elements. Data from 100 school teachers in Kelantan,

Malaysia, was gathered using a cross-sectional research approach. The items in the study were on a 10-

interval scale. The researchers used Varimax Rotation and the Principal Component extraction approach in

an EFA procedure using SPSS software. Additionally, they conducted the Kaiser–Meyer–Olkin (KMO)

assessment of sampling adequacy and Bartlett’s Test of Sphericity. Cronbach's alpha was used to evaluate

the reliability of the items that were kept.

At first, there were fifteen items in the financial literacy construct. The final instrument, however, was

trimmed to 11 items across three dimensions following factor analysis: inflation (three items), time value of

money (four items), and numeracy (four items). The EFA procedure used to create the Financial Literacy

construct is thoroughly explained in this study. This work adds a useful survey tool that improves the

measurement of financial literacy, which is important given the paucity of research on financial literacy

characteristics.
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The research by Versal et al. (2023) explores the impact of savings and personal budgeting

indicators on financial literacy (FLI), financial well-being (FWB), and GDP PPP per capita in selected EU

and non-EU countries. The study concludes that savings indicators have a considerable impact on

subjective financial well-being, but not in EU nations. Furthermore, all of the characteristics that have been

studied have an impact on GDP PPP per capita, and financial literacy is dependent on savings metrics. The

results provide important information for policymakers seeking to increase financial stability and well-being

by indicating that savings are crucial in raising financial literacy.

Savings

The study by Fan and Zhang (2021) examined the relationship between emergency savings among

U.S. adults with respect to sources of financial education and the mediational role that financial literacy

played, employing data from the 2018 National Financial Capability Study. Findings suggest that

emergency savings were positively correlated with financial education received at work and at school. This

study found a positive correlation between emergency savings and financial literacy, where it was seen that

financial literacy mediated the relationship between emergency savings and financial education. The results

underscore the important role played by the various financial education sources in raising the likelihood of

having emergency savings. Also included are the implications for employers, financial educators and

counselors, and legislators.

Nizar et al. (2021) conducted the analysis of saving intentions among Malaysian community college

students using the Theory of Planned Behavior (TPB). It seeks to determine whether attitudes, subjective

norms, and perceived behavioral control affect saving intentions and whether the influence of mobile

applications helps moderate these relationships. The pandemic of COVID-19 further highlighted the need of

emergency savings, as financial preparedness directly affected household resilience during the system

shocks (OECD, 2020).

Budgeting

Two somewhat differing strategies were recently called forth by practitioners from Europe and U.S.

to cope with what they perceive are the disadvantages of conventional budgeting techniques. One method

concentrates mainly on planning issues relating to budgeting by suggesting a simplification of the process.

The other focus invokes issues pertaining to budget performance evaluation and advocates the scrapping
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of a budget altogether. This paper provides an overview and research perspective of these two recent

breaks. Hansen, Otley, and Van der Stede (2003) explain both methods, articulate practitioner discontent

with conventional budgets, put their thoughts into a research context, provide insights that could be useful

to practitioners, and then use practitioner perspectives to define interesting potential areas for academic

research.

The paper reviews the available participatory budgeting literature in-depth. Bartocci, Grossi, Mauro,

and Ebdon (2023) conducted an analysis of 139 English-written papers regarding participatory budgeting in

the public sector, published in academic journals over three decades (1989-2019). By soliciting this

collection of research and shedding light on the participatory budgeting concept, the findings build fresh

knowledge on participatory budgeting. By identifying neglected scope of research topics and practical

interests, the findings additionally motivate a research agenda.

This paper expects to express an opinion on the need for reevaluation of spending by governments,

on the backdrop of the COVID-19 pandemic. Using an understanding based on previously done research

and considering the Italian context, policy changes suggested by Anessi-Pessina et al. for developing

conditions include (i) how reporting and budgeting should change in the future.

Investing

The impact of financial literacy on investment decisions during the pandemic, particularly among

students at Universitas Muhammadiyah Sumatera Utara, is examined in the study of Putri et al., (2021).

The findings show that students' decisions to invest for their future requirements are highly influenced by

their level of financial literacy. Improving financial literacy can help people manage their money better,

which will ultimately result in better investing choices.

The association between investor demographics (gender, age, experience, and educational

background) and their stock market investing choices in Vietnam is examined in this study by Luu Thu et al.

(2023). The results show that herd mentality, emotional emotions, and overconfidence significantly impact

investment choices. Additionally, while experience has little bearing on financial decisions, demographics

like age, gender, and educational attainment have a positive impact on investing choices.

They provide a multifaceted view of sustainable investing's impact on society and the environment.

Shareholders can have an impact as: (1) external stakeholders, engaging with shareholders; and (2)

portfolio managers, screening their portfolios — the two strategies of impact most often deployed by
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mainstream shareholders — but also (3) field builders, an impact strategy most typically deployed by

shareholders on the periphery of the financial sector (Marti et al., 2024). Based on this framework of three

impact strategies, they reconstruct how the effect of each strategy on businesses makes them sustainable,

by drawing on knowledge from four academic fields—management, finance, sociology, and

ethics/sustainability.

In northern Ethiopia, they analyze the individual investing behavior of 822 young men and women

who are members of 111 official business groupings. To obtain disaggregated risk preference data, Holden

and Tilahun (2022) collected baseline data, investment data after one year, and field trials with incentives.

While Cohen's d values for the gender difference are moderate in size, they find that businesswomen on

average invest far less at the individual level than businessmen. Compared to men, women are found to be

more loss averse (higher Constant Relative Risk Aversion (CRRA-r) coefficients—more concave utility

function) and have more optimistic expectations (lower Prelec). Moreover, women had lower salaries, more

land-poor parents, and less nonland assets.

Financial behavior

Financial behavior is defined as the decision-making process and actions taken regarding money

management, which includes borrowing, investing, saving, and spending. It affects the overall financial

stability and well-being of the individuals since it reflects how people react to different opportunities and

challenges within their financial lives. Pirog and Roberts (2012) argue that financial behavior is not only

determined by economic factors but also by individual values, financial literacy, and habits. Good financial

habits, such as planned budgeting, setting of goals, and non-indebtedness, are those that ensure financial

safety in the long run. On the other hand, bad financial habits, such as impulsive spending or gathering too

much debt, bring about financial stress, which deteriorates financial health.

Among the factors known to influence financial behavior are knowledge about finances, social

status, and psychological characteristics like self-control. According to Fernandes, Lynch, and Netemeyer

(2014), people who are financially literate are expected to engage in good financial behaviors of avoiding

high-interest loans and savings for emergencies. Further, Perry and Morris (2005) argue that people with

high financial discipline and self-control tend to engage in good financial behaviors relating to budgeting

and not spending impulsively. These findings show that financial behavior covers attitudes and behaviors

as well as knowledge, which may be supportive or unsupportive of one's financial well-being.

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Financial behavior is substantially influential on financial stability and quality of life. According to

research done by Xiao and Porto (2017), individuals who frequently practice good financial behaviors have

less anxiety concerning money and are more prepared to face the stress of trying financial situations. For

example, smart investing, debt management, and saving a portion of income are all good financial

behaviors that help individuals reach their long-term financial goals and build financial resilience.

Understanding financial behavior is thus of the essence, since it helps politicians, educators, and financial

advisors design programs and interventions likely to encourage good financial behaviors and foster

economic stability.

Behavioral finance therefore covers financial planning, budgeting, investing, debt repayment, and

saving (Çera et al., 2021; Greenberg & Hershfield, 2019). The financial behavior of an entrepreneur is

indicative of the level of control over the finances and budget of the company. Sound financial behavior

leads to informed decision-making, whereas poor management of a business makes it hard to do business.

Effective financial behavior allows entrepreneurs to realize the entire impact of financial decisions on

business outcomes. Saifurrahman & Kassim (2021). Hence, possessing good financial conduct and

knowledge also affects the next generation in the family to initiate their business venture. Ahmad et al.,

(2021).

From the reviewed literature, the critical roles of financial literacy and financial behavior in the

promotion of financial well-being and stability are highlighted. Financial literacy is the knowledge and skill

that empower individuals to make informed choices about budgeting, saving, investing, and debt

management, thereby contributing to their financial resilience. The major finding of all these studies was

that financially literate individuals usually exhibit positive financial behaviors that are quite instrumental in

building financial security for achieving long-term financial goals. This relationship, however, is moderated

by other factors: psychological attitudes, socio-economic conditions, and self-discipline, which may weaken

or strengthen the relationship between financial literacy and financial behavior. That is to say, not only

should financial education programs be purely informational, but also holistic in nature—covering the

behavioral and psychological components that shape financial decision-making. This will allow the

programs to help the businessmen in Pantukan, Davao de Oro more effectively adopt good financial

practices that will eventually lead to better financial results and contribute to economic growth in the

community.
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Purchasing Behavior

Recent research has shown how financial literacy is crucial in driving consumer behavior, especially

among entrepreneurs. Financially literate people are better able to consider long-term value and cost-

effectiveness when making decisions on what to buy (Lusardi & Mitchell, 2010). Research indicates that

business owners with greater financial literacy do not tend to make impulsive purchases but instead spend

on long-term activities that would benefit their businesses (Xiao, 2010).

Purchase decisions are mostly led by emotional biases; however, financial literacy enables business

owners to reduce those biases and give way to more rational decisions (Solomon, 2013). Furthermore, the

risk tolerance level will be a considerable determinant of what people purchase. Businessmen having lower

risk tolerance prefer purchasing safer options whereas those having higher risk tolerance might do bigger

investments (Grable & Lytton, 2010). Besides, business buying decisions are normally anchored on factors

such as cost-efficiency and the expected return on investment.

Businesspeople with financial literacy can better analyze these factors, hence resulting in better

financial decision-making and the right resource allocation (Choi & Lee, 2016). Moreover, the good

knowledge of financial concepts ensures better decisions regarding credit and financing, which prevents the

chance of racking up debts that cannot be paid or played (Mandell, 2010). Taken together, these results

have shown how financial literacy could be a crucial factor that determines businessmen's purchasing

behaviors, affecting both personal and professional decision-making.

Long tern financial goals

Long-term financial goals are financial objectives that individuals or organizations strive to meet over

a long period of time—generally five years or more. These goals vary with the objective of the individual or

organization, but usually, creating wealth, gaining financial independence, and setting up a secured

financial future are the normal achievements. Long-term goals of individuals may include things like

investing in children's education, buying a house, and planning for retirement. Reaching these goals

requires disciplined saving, investment in diversified portfolios, and strategic choices based on long-term

results rather than short-term financial needs.

The long-term financial goals of the companies are often an expansion of operations, gaining an

increased share in the market, or attaining a stable financial position to be able to expand in the near future.

Business managers need to keep factors like capital investment, cost control, and strategic revenue growth
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in mind when trying to meet said goals. Among the important steps that people take in setting long-term

financial goals would be making a clear definition of those goals—whether it's buying a house, opening their

own business, or one's preparation for retirement.

According to Lusardi and Mitchell (2014), individuals with well-planned long-term financial objectives

are more likely to engage in smart investment, regular saving, and effective debt management. As indicated

by Atkinson and Messy (2012), firms with a long-term financial goal tend to perform better because they

map out a clear direction, which leads to strategic decisions. In a nutshell, whether for an individual or a

business, long-term financial goals are very essential in guiding financial action and ensuring that there is

financial stability in the future. They only demand self-discipline, careful planning, and frequent review of

changing financial situations.

Incidence of Debt

The level of indebtedness among the general population and businesses in relation to financial

behavior and economic stability should be researched. Over the past few years, a number of variables were

found to have been important in determining the levels of increased debt, including those concerning

income levels, the availability of loans, and economic conditions. A vast bulk of the empirical studies carried

out prior to the year 2010 have found ample evidence of debt accumulation with respect to the pros and

cons in relation to financial well-being from carrying debt.

As consumer credit became more accessible in the late 20th and early 21st centuries through the

forms of credit cards, mortgages, and personal loans, the prevalence of debt among individuals became

more visible. Lusardi and Tufano in 2009 found a rising level of indebtedness among people due to the

easier access to credit with a particular rise in the proportion of revolving debt in the form of credit cards.

This was especially so in the US, where consumer debt levels zoomed in the years leading to the financial

crisis of 2008 during the boom in housing. Lusardi and Tufano (2009) point out that those who are less

literate financially tend to accumulate more debt because they lack the knowledge base required to make

proper decisions about borrowing and its repayment. Enterprise debtiness turned out to be strongly

connected with the availability of financing and economic cycles. Many firms—mostly SMEs—used loans in

lots of instances to finance their activities or growth before the year 2010.

Nevertheless, from a 1998 study of Chen and Volpe, a highly leveraged firm normally faced

difficulties managing cash flows and satisfying its financial obligations due to possibilities of liquidation or
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other financial constraints. Since the recession starting in 2007 and finally culminating in the world

economic crunch at 2008 forced a series of firms experiencing liquidity shortages with increased costs of

borrowings, it made corporate debt prevalent. Thus, due to over-leverage by enterprises and consumers

impelled by optimism or lack of financial knowledge, debt accumulation and the consequent financial

distress were especially pervasive at this time. The OECD (2010) finds that many people depend on debt in

order to maintain their living standards and that the incidence of debt has risen across the world, with

special rapid growth among lower-income groups.

This tendency was indicative of general financial behavior patterns in the era, where the

preference was often for short-term gratification over long-term financial goals.

Financial Literacy and Financial Behavior

Financial literacy is widely recognized as a crucial factor in individuals’ ability to make informed

financial decisions, manage their personal finances, and achieve financial well-being. Huston (2010) posits

that financial literacy encompasses both application and knowledge, meaning that people need to be able

to apply financial principles in real-world financial scenarios in addition to understanding them. Higher

financial literacy tends to lead to more proactive financial decisions, which improves both short- and long-

term financial outcomes, according to the OECD (2013).

For financial well-being, particularly for entrepreneurs and business owners, financial conduct and

literacy are essential. According to a study by Galapon and Bool (2022), financial behavior has a greater

influence on financial well-being than financial literacy. Small business owners who handle their money on a

regular basis have a higher chance of being financially stable. Financial success is ultimately influenced by

the use of financial literacy, which serves as the basis for comprehending financial ideas. Instead of

concentrating only on theoretical ideas, financial education programs ought to emphasize behavioral

financial coaching. This could entail practical instruction in risk management, financial planning, and frugal

spending practices. Financial decision-making, stress reduction, financial well-being, and corporate

performance can all be improved by combining financial knowledge with useful behavioral interventions.

The study by Fazrin and Fathihani (2024), examined the relationship between locus of control,

financial literacy, and locus of control and financial management behavior. The study's goal was to

determine how locus of control, financial literacy, and financial attitudes affect financial management

behavior. The study's findings showed that financial literacy has a significant and positive impact on the
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Millennial Generation's financial attitudes, and that a strong locus of control also plays a crucial role in

shaping their financial behaviors. This suggests that people who feel in control of their financial outcomes

are more likely to engage in positive financial practices, which improve their overall financial well-being.

Management Practices in the Jakarta Region the financial management practices of the millennial

generation in the Jakarta region are not influenced by financial attitudes. The Millennial Generation's

financial management behavior in the Jakarta region is positively and significantly impacted by locus of

control.

This study by Rapina et al. (2023) examines the impact of financial behavior and literacy on

entrepreneurial motivation among accounting students. Using the Partial Least Square Structural Equation

Modelling (PLS-SEM) method, the research found a significant positive association between financial

literacy and students' willingness to start their own businesses. The study suggests that an integrated

educational curriculum is crucial to strengthening entrepreneurial motivation among accounting students.

The government is encouraging entrepreneurship among university students, especially accounting

students in West Java, Indonesia, as a means of addressing social issues, creating jobs, and fostering

economic growth

The studied literature highlights how important financial behavior and financial knowledge are to

fostering stability and well-being in one's finances. By giving people, the information and abilities they need

to make wise choices regarding debt management, investing, saving, and budgeting, financial literacy helps

people become more financially resilient. Research continuously shows that people who are financially

literate typically engage in sound financial practices, which are critical for establishing long-term financial

objectives and establishing financial security. However, a number of other factors, including psychological

attitudes, socioeconomic conditions, and self-discipline, can either improve or diminish the association

between financial literacy and financial behavior. These findings imply that financial education programs

must to cover the behavioral and psychological factors that affect financial decisions in addition to imparting

knowledge. By doing this, these initiatives can assist business owners in Pantukan, Davao de Oro in

implementing sound financial practices, which will ultimately enhance their financial results and boost the

local economy.

Theoretical Framework
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This study is anchored to the theory of (Lusardi & Mitchell, 2007). The pair said that financial literacy

is defined as the knowledge and understanding of financial concepts and risks, as well as the ability to

apply such knowledge to make effective financial decisions and financial literacy is seen as a critical factor

that influences financial behavior.

This supported by (Atkinson & Messy, 2012) that External Environment: Factors such as market

conditions, economic policies, and access to financial spending. Positive financial behavior is expected to

lead to better financial outcomes.

Furthermore, cognitive biases including anchoring, loss aversion, and overconfidence can have a

big impact on financial decision-making, claims Behavioral Finance Theory (2010). Additionally, according

to the Life-Cycle Hypothesis (Ando & Modigliani, 1963), people plan their savings and spending habits

depending on their anticipated lifetime income. This can have an impact on their financial choices and

general well-being.

Conceptual Framework

This study explores the relationship between financial literacy and financial behavior among

businessmen in Pantukan, Davao de Oro. The independent variable, financial literacy, encompasses three

key components: savings, budgeting, and investing. Savings refer to the ability to allocate income for future

needs and emergencies. Budgeting involves awareness and management of income and expenses,

ensuring financial stability through proper planning. Investing highlights the knowledge and application of

strategies for diversification, risk management, and maximizing returns.

The dependent variable, financial behavior, reflects how individuals apply their financial knowledge

in practical scenarios. It includes purchasing behavior, which focuses on prioritizing needs, adhering to

budgets, and avoiding impulsive spending. Long-term financial goals involve setting and achieving strategic

objectives to secure financial stability in the future. Incidence of debt addresses responsible borrowing

practices and the avoidance of excessive financial obligations.

This conceptual framework posits that financial literacy, through its domains of savings, budgeting,

and investing, significantly influences financial behavior, including purchasing habits, long-term financial

planning, and debt management. The study aims to analyze these interrelations to provide insights for

enhancing financial practices among rural entrepreneur.

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Independent Variable Dependent Variable

Financial Literacy Financial Behavior

A. Savings A. Purchasing Behavior

B. Budgeting B. Long-term financial goals

C. Incidence of debt?
C. Investing

Figure 1. Conceptual Paradigm of the Study

Scope and Delimitation

The study was limited at all Barangay in Pantukan, Davao de Oro. The target respondents are

businessman. The researchers cautiously selected all businessmen, male and female to have balance

records according to gender. The respondents are businessmen at hand at Pantukan, Davao de Oro.

The research will only discuss the financial literacy levels and behaviors of the all-designated

businessmen at Pantukan, Davao de Oro.

Data for this research were collected through written administered questionnaires. This research did

not include other financial influences such as cultural background, educational background, or prior

financial education. This research only focuses on the subject which is the "Financial Literacy and Financial

Behavior among Businessmen in Pantukan, Davao de Oro”.

Significance of the study

This research is conducted to provide essential information and insights regarding the financial

literacy and behavior of businessmen in Pantukan, Davao de Oro, supported by recent studies and relevant

sources.

The findings of this study are expected to offer significant benefits to various stakeholders:

The Businessmen. Through this research, the businessmen, who are the primary respondents of

this study, can evaluate and enhance their financial literacy and behavior. The study may highlight gaps in

their understanding of financial concepts, enabling them to make more informed decisions about managing

their business and personal finances. The results of this study will serve as a foundation for their long-term

financial stability and growth in their enterprises.

The Parents. Parents can benefit from this study by learning about the positive financial practices

observed among businessmen, which may influence better financial behaviors within their own households.
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Additionally, parents may become more aware of financial literacy and behaviors, enabling them to engage

in meaningful discussions with their children about financial management.

The Students. The findings of this study are expected to inform the development of financial

education programs targeted at students. It is hoped that this study will help students gain practical

knowledge about managing personal finances, budgeting, and making informed financial decisions, which

they can apply in their future careers.

Researchers. This research will help researchers explore and expand the existing body of

knowledge about financial literacy and behaviors, specifically among businessmen. Moreover, this research

will provide them with valuable background experience for future studies or dissertations. The knowledge

and experience gained from this research will serve as significant lessons that they will carry forward into

their tertiary and post-college careers.

Future Researchers. The findings of this research will serve as a reference and guide for future

researchers interested in investigating similar topics or any studies related to financial literacy.

Definition of terms

Financial. Is a broad term that essentially refers to money management or channeling money for

various purposes. It applies to people, businesses, governments, organizations, or other entities.

Literacy. Refers to the ability to read and write effectively. It encompasses the skills and knowledge

necessary to understand and use written language for communication, information, and personal

development. Literacy involves not only the basic ability to read and write but also the comprehension,

critical thinking, and communication skills required to interpret and analyze written texts.

Behavior. Refer to one's actions before or toward others, especially on a particular occasion.

Behavior refers to actions usually measured by commonly accepted standards

Financial literacy. Refers to the ability to understand and effectively use various financial skills,

including personal financial management, budgeting, and investing. When you are financially literate, you

have the foundation of a relationship with money, and it is a lifelong journey of learning.

Financial Behavior. Refers to the way a person manages their money, makes financial decisions,

and deals with financial issues. Many factors influence an individual's financial behavior, including

upbringing, culture, personality, education, income level, and personal experiences.

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Businessmen: An individual engaged in business activities in Pantukan, Davao de Oro, either as

an owner or manager, who makes decisions regarding the operation and financial management of a

business.

CHAPTER II
METHODOLOGY
The methodology chapter outlines the specific methods and approaches applied in this research,

from design selection and respondent details to data collection and statistical analysis. This structured

approach ensures that the study’s processes are transparent, systematic, and reliable.

Research Design

A correlational research strategy was used in this study, which is very useful for examining the

connections between two or more variables without changing them. In order to understand how one

variable may change in connection to another, correlational research seeks to determine and assess the

direction and degree of links between variables (Creswell, 2014). We investigate the correlations between
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several factors impacting the dependent variable using this design, which is beneficial for research that aim

to find associations rather than prove causality.

Additionally, according to McLeod (2019), correlational research can incorporate both quantitative

and qualitative data, enabling a thorough analysis of relationships. This study was able to collect numerical

data from respondents through surveys and questionnaires, which made it easier to statistically analyze

correlations. The findings from this design can offer insightful information about trends and patterns,

advancing our understanding of the phenomena being studied and guiding future research directions.

In conclusion, the correlational design selected for this study enables a thorough examination of the

relationships among important variables, supporting the study's goals and offering a strong framework for

analysis.

Research Subject

The study involved 20 businessmen from various industries in Pantukan, Davao de Oro.

Respondents were selected using purposive or criterion sampling, a method that identifies participants

based on specific inclusion criteria. To qualify for the study, respondents needed to meet three criteria: they

must own a business, possess a car, and reside in a concrete or well-constructed house. This approach

ensured that the respondents were relevant to the study’s objectives and reflected the characteristics of

financially literate businessmen in the area.

This methodology guarantees the fairness and diversity of our sample, enabling us to conduct a

thorough analysis and comprehension of businessmen's financial behavior and financial literacy. By

concentrating on those who fit our requirements, we hope to collect pertinent and significant data that

represents the financial understanding and practices of Pantukan business community.

Our goal is to collect pertinent and significant data by concentrating on responders who fit our criteria.

In the end, 20 businessmen were chosen as study participants. In order to provide important insights into

the financial awareness of local entrepreneurs, we aim to accurately depict financial literacy and behavior.

The number of respondents chosen for this study is 20 businessmen. Table 1 will present the

distribution of respondents across the various clusters according to their eligibility and relevant

characteristics.

Table 1
Distribution of Respondents
 18

Criteria Male Female Total

Respondents Respondents
Quality Housing (e.g., concrete house), car 7 13 20
ownership, and business ownership

Research Instrument
This study uses a survey as its main research tool. A common technique for gathering quantitative

data, surveys are useful for gauging concepts like attitudes, beliefs, and behaviors (Garner & Scott, 2013).

This study's decision to use a survey was influenced by the kind of information required to achieve its goals.

It is crucial to develop hypotheses based on a careful examination of pertinent literature and to examine the

gathered data in order to test correlations between research variables, as stressed by Dörnyei (2007).

In particular, this study looks at the financial behavior and literacy among businessmen in Pantukan,

Davao de Oro. Twenty-one (21) items were used to measure financial literacy and eighteen (18) items

were used to evaluate financial behavior in a standardized questionnaire. The dependability of the

responses was increased by administering the questionnaire directly to participants, with the researcher

present to aid and make sure they understood each item.

Certain parameter constraints are included in the survey instrument to analyze the respondents'

level of financial behavior and literacy. By classifying replies into degrees of agreement or disagreement,

these criteria offer an organized method for analyzing the data and deriving insightful conclusions. The

study guarantees accuracy and consistency in assessing the major financial constructions among local

businessmen by employing a defined methodology

For measuring the extent of financial literacy and financial behavior among businessmen in

Pantukan, Davao de Oro, the researchers used the following scales along with their descriptive equivalents:

Table 2: Parameter Limits for Survey Responses

Parameter Limit Extent Description

4.20 – 5.00 Strongly Agree This indicates that respondents strongly agree

with statements about their financial practices

or awareness.

3.42 – 4.19 Agree This indicates that respondents agree with

statements about their financial practices or

 19

awareness.

2.60 – 3.39 Neutral This indicates that respondents are neutral or

have a moderate opinion about their financial

practices or awareness.

1.80 –2.59 Disagree This indicates that respondents disagree with

statements about their financial practices or

awareness.

1.00 – 1.79 Strongly Disagree This indicates that respondents strongly

disagree with statements about their financial

practices or awareness.

Data Gathering Procedure

In gathering the data for this study, the researcher followed several steps to ensure accuracy and

efficiency. Initially, the researcher sought permission by sending a formal consent letter to local authorities

and community leaders in Pantukan, Davao de Oro. This letter outlined the purpose of the research and

requested permission to conduct a survey among selected businessmen. The respondents were carefully

chosen based on specific eligibility criteria, ensuring that the study accurately reflected the financial literacy

and behavior of the target population.

A structured survey was used as part of a quantitative data collection strategy to obtain information.

The design was used to effectively gather information from 20 businesspeople representing a range of

sectors. A structured questionnaire of 21 items measuring financial literacy and 18 items measuring

financial behavior made up the survey tool. In order to improve the dependability of the data gathered, the

researcher was present when the questionnaire was being administered to help the participants and make

sure they understood every question.

The responses were meticulously documented and arranged following data collection. Following

that, the data was examined and interpreted in order to derive significant findings regarding the financial

awareness and behaviors of Pantukan businessmen. The study rigorously assessed the degree of financial

conduct and literacy using predetermined parameter boundaries, offering important insights into how these

elements are expressed in the local entrepreneurial community.

Formulating Research Questionnaire

 20

Creating a Research Questionnaire. We used a standardized survey questionnaire after deciding

on the research title. To guarantee consistent and dependable data, it is essential to design a valid and

trustworthy equipment. The study's standardized questionnaire evaluated the financial behavior and literacy

of business owners in Pantukan, Davao de Oro. Respondents were asked to indicate their level of

agreement with various statements about their financial practices and knowledge, using a scale from 5

(strongly agree) to 1 (strongly disagree).

The questionnaire's uniform and organized style was deliberately developed to support accurate

data collection and to conform to accepted research methods. Extensive statistical analysis was performed

on the collected information. The characteristics of the respondents were specified by descriptive statistics

like frequency and percentage. Regression analysis was employed to examine the effects of independent

variables on the dependent variable, while correlation analysis revealed connections between financial

behavior and financial literacy.

Data Analysis. Several statistical techniques were used to examine the data, including standard

deviation, mean, and frequency. The researcher also looked at the responder profile to comprehend data

distribution and spot important trends. Descriptive and inferential statistics were combined to guarantee a

solid analysis.

Statistical Treatment of the Data

To ensure that the research findings are accurate, dependable, and insightful, a variety of statistical

tools were used to examine the data gathered from the respondents. A thorough grasp of the connections

between financial conduct and financial literacy among businessmen in Pantukan, Davao de Oro, was

made possible by these instruments.

Mean. Using this technique, the average level of financial behavior and financial literacy among the

businessmen was ascertained. An overview of the respondents' financial practices and knowledge was

provided by the study's description of the central tendency of their scores through the computation of the

mean.

Analysis of Variance (ANOVA). This will be utilized to examine the relationship between financial

literacy and financial behavior among businessmen in Pantukan, Davao de Oro.

 21

Chapter III
Results and Discussion
In this chapter, the data on the financial literacy and financial behavior among Businessman in

Pantukan, Davao de Oro are presented, analyzed and interpreted.

Extent of Financial Literacy among businessmen in terms of Savings

Table 3 shows the extent of financial literacy among businessmen in Pantukan Davao de Oro.

Businessman are saving in terms of: Businessmen believe that saving money is necessary (4.50, Very

high); Businessmen save a portion of their income regularly (4.20, Very high); Businessmen can save a

portion despite having a low income. (3.80, High); Businessmen put up their savings account, property,

pension house, or collective investment scheme. (3.65, High); Businessmen put their investment and

savings in bank because always trust financial institutions. (3.75, High); Businessmen prepared to risk

some of their own money when saving or making an investment. (3.65, High); Businessmen truly see the

importance in making savings (4.20, Very high).

The overall mean score of 3.96, which corresponds to High, indicates that businessmen in

Pantukan generally have a positive attitude toward savings, although there is room for improvement in

areas such as risk-taking and diversifying their savings.

 22

The results in Table 3 indicate that businessmen in Pantukan, Davao de Oro, generally exhibit good

financial literacy in savings, as evidenced by the overall mean of 3.96 ("High"). This aligns with studies like

Huston (2010) and OECD (2013), which highlight that financial literacy promotes effective saving practices

and informed decision-making. Businessmen strongly agree on the necessity of saving and regularly setting

aside income, reflecting resilience even in low-income scenarios, as noted by Hauff et al. (2020). They also

trust financial institutions and invest cautiously, consistent with findings by Atkinson & Messy (2012).

However, the lower scores on risk-taking suggest a need for further education to enhance their confidence

in diversifying investments, supporting Kaiser and Menkhoff's (2017) call for programs addressing both

knowledge and behavior.

Table 3
Extent of Financial Literacy among businessmen in Pantukan, Davao de Oro in terms of Savings
A. Savings Mean Description

1.I believe that savings money is necessary 4.50 Very high

2. I save a portion of my income regularly 4.20 Very high

3. I can save a portion despite having a low income 3.80 High

4. I put up my saving on savings account, property, pension 3.65 High

house, or in collective investment scheme.

5. I put my investment and savings in banks because always trust 3.75 High

financial institutions.

6. I am prepared to risk some of my own money when saving or 3.65 High

making an investment.

7. I truly see the importance in making savings. 4.20 Very high

Overall mean 3.96 High

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low
 23

Extent of Financial Literacy among businessmen in terms of Budgeting

Table 4 shows the extent of financial literacy among businessmen in Pantukan Davao de Oro.

Businessmen are budgeting in terms of: Businessmen aware of their monthly income and expenditure

(4.00, High); Businessmen have a budget that they stick to (3.85, High); Businessmen set aside money

each month for savings and future needs (3.90, High); Businessmen try to save something and spend the

rest of the money on the everyday needs (3.95, High); Businessmen spend money on the daily needs the

rest of the money on the everyday needs (3.75, High);Businessmen are certain that if there is an

emergency, they could access up three months’ worth of their household income (3.80, High).

However, there are certain areas where financial procedures should be strengthened, especially

with regard to budget adherence (3.85) and disaster readiness (3.80). The considerably lower results imply

that businessmen would find it difficult to carefully stick to their budgets and obtain enough emergency

funds. These shortcomings highlight the necessity of financial education initiatives to encourage improved

financial discipline and resilience. Kaiser and Menkhoff (2017), who propose sophisticated budgeting

strategies to increase financial stability, emphasize the significance of such initiatives.

Generally speaking, the results show that Pantukan businesspeople manage their money well, while

there is always space for improvement. The implementation of financial education programs emphasizing

emergency reserves and budget discipline is advised in order to further improve financial literacy.

Furthermore, promoting participatory budgeting techniques (Bartocci et al., 2023) and streamlining

budgeting procedures (Hansen, Otley, and Van der Stede, 2003) may help small company owners become
 24

more financially resilient and prepared. By filling in these gaps, entrepreneurs can improve their financial

security and readiness for upcoming obstacles.

Table 4
Extent of Financial Literacy among businessmen in terms of Budgeting
B. Budgeting Mean Description

1. I am aware of my monthly income and expenditure. 4.00 High

2. I have a budget that I stick to. 3.85 High

3. I set aside money each month for savings and future needs. 3.90 High

4. I try to save something and spend the rest of the money on the 3.95 High

everyday needs.

5.. I spend money on the daily needs the rest of the money on the 3.75 High

everyday needs.

6. I am certain that if there is an emergency, I could access up 3.80 High

three months’ worth of my household income.

Overall mean 3.88 High

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low
 25

Extent of Financial Literacy among businessmen in terms of Investing

Table 5 shows the extent of financial literacy among businessman in Pantukan Davao de Oro.

Businessman are investing in terms of: Businessmen invest an amount of money that exceeds their living

expenses (3.70, High); Businessmen invest in insurance companies (3.40, High); Businessmen invest in

real estates (3.50, High); Businessmen invest in shares or stock and bonds (2.85, Moderate); Businessmen

current investment portfolio is diversified to balance the risks (2.75, Moderate); Businessmen consider the

interest or the earnings before they invest (4.05, High); Businessmen ask suggestions from the experts

before they invest (3.75, High); Businessmen believe that investing an amount of money that exceed their

monthly living are bad (3.30, Moderate).

With an overall mean score of 3.41 ("High"), Table 5's findings show that businessmen in Pantukan,

Davao de Oro, have a modest level of financial literacy when it comes to investing. They exhibit best

practices, like seeking advice from professionals (3.75) and weighing possible profits before making an

investment (4.05). In line with Van Rooij, Lusardi, and Alessie's (2011) claim that financially educated

people use a variety of financial products and make well-informed judgments, they also invest in real estate

(3.50) and insurance (3.40).

Neutral answers in areas such as diversifying portfolios to balance risks (2.75) and investing in

stocks and bonds (2.85), however, point to a lack of confidence or understanding in managing riskier

investment options. These results are consistent with research by Atkinson and Messy (2012), which

highlights how crucial risk management is to financial literacy. According to Kaiser and Menkhoff (2017),

enhancing these areas through focused financial education initiatives may assist entrepreneurs in

diversifying their investing approaches and reaching more comprehensive financial conclusions.

Although the businesspeople generally demonstrate a sufficient grasp of fundamental investment

principles, their decision-making and financial resilience might be greatly enhanced by expanding their

understanding of risk diversification and higher-return investment possibilities.

 26

Table 5
Extent of Financial Literacy among businessmen in terms of Investing
C. Investing Mean Description

1. I invest an amount of money that exceeds my living expenses. 3.70 High

2. I invest in insurance companies. 3.40 High

3. I invest in real estates. 3.50 High

4. I invest in shares or stocks and bonds. 2.85 Moderate

5. My current investment portfolio is diversified to balance the risks. 2.75 Moderate

6. I consider the interest or the earnings before I invest. 4.05 High

7. I ask suggestions from the experts before I invest. 3.75 High

8. I believe that investing an amount of money that exceed your 3.30 Moderate
monthly living is bad.
Overall mean 3.41 High

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low

Summary on the extent of financial literacy among businessmen in Pantukan, Davao de Oro
The financial literacy of businessmen in Pantukan, Davao de Oro, is notably high, as reflected in the

overall mean score of 3.75 across the key areas of savings, budgeting, and investing. Among these,

savings achieved the highest mean of 3.96, indicating that businessmen prioritize regular savings as part of
 27

their financial management strategies. Budgeting closely follows with a mean of 3.88, reflecting their ability

to allocate resources effectively. Meanwhile, investing, with a mean of 3.41, although categorized as high,

suggests the need for improvement in making more strategic investment decisions.

These findings align with the research of Lusardi and Mitchell (2011), which underscores the

significance of financial literacy in enabling individuals to make informed financial decisions, thereby

improving their financial well-being. Additionally, the work of Kaiser and Menkhoff (2017) supports the

notion that targeted financial education programs can enhance the financial decision-making capacity of

entrepreneurs. Such programs not only promote financial resilience but also contribute to the overall

economic success of businesses. The results suggest that while Pantukan businessmen exhibit a solid

foundation in financial literacy, particularly in saving and budgeting, focused education and training in

investment strategies could further enhance their financial performance and business sustainability.

The high average scores in budgeting and savings show a solid grasp and use of good financial

habits. The ability of the businessmen to control cash flow, guarantee financial stability, and uphold

operational effectiveness is demonstrated in these areas. Nonetheless, the comparatively low investing

score indicates a room for improvement. To maximize profits, entrepreneurs may find it helpful to increase

their understanding of risk management, investment options, and portfolio diversification.

Overall, the findings show that although the businessmen in Pantukan have a strong foundation in

financial literacy, especially when it comes to budgeting and saving, they may be further empowered by

targeted education and training in investing methods. Long-term economic success would result from these

initiatives, which would improve their financial performance and business sustainability.

Table 6
 28

Summary on the extent of financial literacy among businessmen in Pantukan, Davao de Oro

Indicators Mean Description

A. Savings 3.96 High

B. Budgeting 3.88 High

C. Investing 3.41 High

Overall Mean 3.75 High

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low

Level of the financial behavior in terms of Purchasing Behavior

Table 7 shows that businessmen in Pantukan generally make thoughtful decisions when it comes to

purchasing. They prioritize necessary items (4.20, Very high) and carefully consider whether they can afford

a purchase (4.45, Very High). They also compare prices when making major purchases (4.05, High) and

use a spending plan or budget (3.95, High): They keep track to their expenditure and income (3.85 High);

They usually buying the best- selling product instead of the one they think is best when they is similar

option (3.85 High); They understand the importance of resisting temptation to spend the money on

shopping (3.90 High). However, they find it more satisfying to spend money than to save for the long-term

(3.55, High), suggesting a slight tendency to focus on short-term gratification.

 29

The impact of emotional factors on purchasing decisions could be the subject of another

interpretation. Even though they behave financially well most of the time, Pantukan businesspeople have a

minor propensity for instant pleasure. Even though they are financially literate, their purchasing decisions

may be influenced by emotional biases. Emotions frequently influence consumer behavior, including

company purchases, according to Solomon (2013). Even financially savvy business owners may feel a

strong emotional urge toward instant gratification, which, if not controlled, could result in unstable finances.

The tendency to put current spending ahead of long-term savings may be motivated by emotional

cravings for rapid gratification, which highlights the difficulty in striking a balance between sound financial

judgment and emotional fulfillment. According to Mandell (2010), financial literacy aids in lowering

emotional biases and promotes more careful and logical decision-making. Enhancing emotional regulation

and emphasizing the value of postponed pleasure have the potential to improve Pantukan businessmen's

purchasing habits and promote longer-term financial success.

According to the total mean score of 3.98, Pantukan businesspeople often behave responsibly when

making purchases. However, the lower mean of 3.55 for avoiding impulsive spending suggests that they

have a tendency toward rapid pleasure, which could be problematic for their long-term financial stability.

This result aligns with Pirog and Roberts (2012), who emphasize that intentional spending and self-control

are essential components of financial well-being. These entrepreneurs show sound financial practices, but

they might be better off concentrating more on long-term financial objectives, which would increase their

overall stability.

Table 7
Level of the financial behavior among businessmen in terms of Purchasing Behavior
A. Purchasing Behavior Mean Description

1. I priority buying the items that are necessary. 4.20 Very High

2. Before buying something I carefully consider whether I can 4.45 Very High
afford.
3. I compare prices when shopping for major expenses. 4.05 High

4. I use a spending plan or budget. 3.95 High

5. I keep track of my expenditure and income. 3.85 High

 30

6. I usually buying the best-selling product instead of the one I 3.85 High
think is best when there is similar option.
7. I understand the importance of resisting the temptation to 3.90 High
spend the money on shopping.
8. I find it more satisfying to spend money than save it for the 3.55 High
long-term.
Overall mean 3.98 High

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low

Level of the financial behavior among businessmen in terms of Long-term financial goals
Table 8 shows the level also have a firm grasp on the significance of long-term financial objectives

in terms of: They set long-term financial goals and strive to achieve them (3.90, High); They believe that

having a financial goals is necessary (4.20, Very High); They believe that having a long-term, five plus goal

is necessary (3.75, High); They set aside money for long-term investments (3.50, High); They believe that

investing is necessary for long-term financial goals (3.70, High).

The overall mean of 3.81 (High) indicates that Pantukan businesspeople are devoted to

accomplishing their long-term goals and are typically worried about their financial future. The data indicates

that they may improve their financial behavior by more consistently allocating cash for long-term

investments, even while they recognize the importance of investing in achieving their financial objectives

(mean: 3.70).

This observation supports the findings of Huston's (2010) study, which emphasizes the significance

of disciplined saving and strategic financial planning for long-term success. By refining their investing
 31

strategies and forming a routine of consistently allocating funds for long-term objectives, these

entrepreneurs

might further strengthen their financial standing and guarantee stability going forward.

Table 8
Level of the financial behavior among businessmen in terms of Long-term financial goals

B. Long Term Financial Goals Mean Description

1. I set long term financial goals and strive to achieve them. 3.90 High

2. I believe that having financial goals is necessary. 4.20 Very High

3. I believe that having a long-term, five plus year goals is 3.75 High

necessary.

4. I set aside money for long-term investments. 3.50 High

5. I believe that investing is necessary for long-term financial 3.70 High

goals.

Overall mean 3.81 High

 32

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low

Level of the financial behavior among businessmen in terms of Incidence of debt

Table 9 shows the level of , businesspeople in Pantukan approach debt with a fair amount of caution

in terms of: They rely their expenses or needs on Mortgages (2.90, Moderate); They rely their expenses or

needs on Consumer Loans (3.05, Moderate); They have been involved in financial trouble such as bank

transfer or multiple debts (2.50, low); They have too much debt right now (2.30, Low); They exactly know

what to do in financial trouble such as a bank transfer fraud or multiple debts (3.25, Moderate).

With an aggregate mean of 2.80 (Moderate), businessmen in Pantukan are neutral when it comes to

handling financial challenges and have a comparatively low prevalence of debt.

Numerous studies on financial behavior reinforce the findings in Table 9, emphasizing the value of

prudent debt management and financial readiness. According to Lusardi and Mitchell's (2011) research,

financially literate people are more likely to refrain from excessive borrowing and comprehend the

consequences of using debt, which is consistent with Pantukan businessmen's neutral position toward their

reliance on consumer loans and mortgages.

The finding that Pantukan businessmen disagree with having too much debt and have not

experienced financial difficulties is also consistent with studies like those by Pirog and Roberts (2012),

which demonstrate that people who follow sound financial practices, such as budgeting and saving,

typically have lower debt levels.

 33

Additionally, Xiao and Porto (2017) stress that those who practice good money management are

more equipped to deal with financial crises. Regarding their understanding of how to deal with financial

problems, including bank fraud or having several debts, the neutral response indicates that they could be

better prepared for such circumstances. All things considered, these findings provide credence to the idea

that while Pantukan businesspeople handle debt responsibly, they might still stand to improve their financial

preparedness.

Table 9
Level of the financial behavior among businessmen in Pantukan, Davao de Oro in terms of
Incidence of debt
C. Incidence of Debt Mean Description

1. I rely my expenses or needs on Mortgages. 2.90 Moderate

2. I rely my expenses or needs on Consumer Loans. 3.05 Moderate

3. Have been involved in financial trouble such as bank transfer or 2.50 Low

multiple debts.

4. I have too much debt right now. 2.30 Low

5. I exactly know what to do in financial trouble such as a bank 3.25 Moderate

transfer fraud or multiple debts.

Overall mean 2.80 Moderate

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low
 34

Summary on the level of the financial behavior among businessmen in Pantukan, Davao de Oro
The general financial behavior of Pantukan businessmen is summed up in Table 10. The total mean

of 3.53 (High) suggests that businessmen generally behave well financially, especially when it comes to

long-term financial objectives and purchases. Their conduct in this area is neutral, though, so there is

potential for improvement in terms of debt management.

The results are consistent with financial literacy research, which backs up the notion that prudent

financial practices are essential to efficient money management. For example, Cude (2000) claims that a

key element of financial literacy is responsible purchasing behavior, which involves setting priorities for

important purchases, evaluating costs, and creating a budget. This is demonstrated in the high mean score

for purchasing behavior (3.98, High), indicating that Pantukan businesspeople engage in careful spending

practices.

The businessmen's behavior (3.81, High) in relation to long-term financial goals is in line with

Lusardi and Mitchell's (2011) findings, which emphasize the significance of establishing and pursuing long-

term financial targets for stability. This implies that by carefully planning, the businessmen are moving

closer to guaranteeing their financial future.

Their mean score of 2.80 (Moderate) for debt management, however, indicates that even while they

steer clear of significant debt, better risk management techniques are still required. The OECD (2013)

supports this conclusion by highlighting how crucial it is to comprehend and manage debt in order to

preserve long-term financial stability. Consequently, there is a chance to increase their debt even when

Pantukan businesspeople exhibit excellent financial behavior in terms of long-term objectives and

budgeting.
 35

Table 10

Summary on the level of financial behavior among businessmen in Pantukan, Davao de Oro.

Indicators Mean Description

A. Purchasing Behavior 3.98 High

B. Long Term Financial Goals 3.81 High

C. Incidence of debt 2.80 Moderate

Overall Mean 3.53 High

Legend:
Range of Means Description
4.20 ‒ 5.00 Very High
3.40 ‒ 4.19 High
2.60 ‒ 3.39 Moderate
1.80 ‒ 2.59 Low
1.00‒ 1.79 Very Low
 36

Significant Relationship between financial literacy and financial behavior

Table 11 demonstrates a strong positive correlation between financial literacy and financial behavior

among businessmen in Pantukan, Davao de Oro. With financial literacy having a mean of 3.75 and financial

behavior a mean of 3.53, the null hypothesis (Ho) is rejected. This indicates that higher levels of financial

literacy are associated with more prudent financial behaviors, such as effective budgeting, saving, and

investing.

The findings are consistent with Lusardi and Mitchell's (2011) assertion that financial literacy is

essential for sound financial decision-making. Financial literacy equips individuals to navigate complex

financial products and manage risks effectively. Similarly, Atkinson and Messy (2012) emphasize that low

financial literacy often leads to poor financial outcomes, such as excessive debt and inadequate savings.

These negative behaviors can improve with targeted financial education, as shown by Fan and Zhang

(2021).

Furthermore, financial behavior refers to the practical application of financial knowledge in areas like

saving, spending, and investing. Fernandes, Lynch, and Netemeyer (2014) highlight that individuals with

greater financial literacy are more likely to adopt better financial habits, such as avoiding high-interest loans

and planning for emergencies. The role of financial literacy extends to fostering disciplined behaviors, which

are vital for achieving long-term financial goals, as supported by Çera et al. (2021).

In the entrepreneurial context, the influence of financial literacy is critical. Choi and Lee (2016) found

that businesspeople with financial knowledge are more likely to make rational and sustainable financial

decisions, avoiding impulsive purchases and managing resources more effectively. This is particularly

crucial for entrepreneurs, where informed financial behaviors can significantly impact business outcomes,

as observed by Saifurrahman & Kassim (2021).

The strong relationship observed in this study aligns with the broader literature, underscoring the

importance of financial education in fostering economic stability and long-term financial resilience. For

businessmen in Pantukan, Davao de Oro, enhancing financial literacy could lead to better financial

practices, positively impacting their enterprises and contributing to the local economy.
 37

This connection between financial literacy and behavior is well-supported by the existing literature,

emphasizing how education in both financial concepts and practical applications can improve financial

outcomes, both personally and within the broader community. By fostering a more financially literate

business community, Pantukan’s entrepreneurs can improve their financial decision-making, contributing to

both their personal well-being and the economic stability of the region.

Table 11

Significant Relationship between financial literacy and financial behavior

Variables Mean Decision
Financial Literacy 3.75
Ho is rejected
Financial Behavior 3.53

The domain of financial literacy significantly influence financial behavior among businessman in
Pantukan, Davao de Oro
The regression analysis in Table 12 highlight the critical role of investing in shaping the financial

behavior of businessmen in Pantukan, Davao de Oro. The results show that the domain of Investing has a

significant influence, with a p-value of 0.006, which is below the 0.05 threshold, indicating its strong impact.

In contrast, Savings (p-value = 0.789) and Budgeting (p-value = 0.149) do not exhibit significant effects,

suggesting that while these areas are important, they do not directly shape financial behavior as strongly as

investing does.

This finding is consistent with existing literature that underscores the importance of financial literacy

in investment decisions. Lusardi and Mitchell (2011) emphasized that financially literate individuals make

more informed investment choices, which positively influence their financial behavior. Similarly, Kaiser and

Menkhoff (2017) noted that investment literacy is a key driver of improved financial decision-making and

business success. These studies support the idea that investment literacy equips individuals with the skills

and confidence to make strategic financial decisions, thereby fostering better financial behavior.

Moreover, the lack of significant influence from Savings and Budgeting aligns with research

suggesting that while these domains contribute to financial stability, they may not have an immediate or
 38

transformative effect on behavior. For example, Fan and Zhang (2021) found that while savings habits are

positively associated with financial literacy, their impact is often mediated by other factors, such as financial

education sources and emergency preparedness. Similarly, Hansen et al. (2003) highlighted that budgeting

strategies might require broader contextual changes, such as participatory methods, to become more

impactful.

The findings suggest that while savings and budgeting are essential, businessmen in Pantukan

might already practice these skills to a sufficient degree. However, their financial behavior is more deeply

influenced by how well they understand and engage with investment opportunities. This highlights the need

for targeted financial education programs that emphasize investment strategies, as suggested by Marti et

al. (2024), to empower businessmen to make informed and strategic decisions that enhance their financial

resilience and business success.

Table 12
The domain of financial literacy significantly influence financial behavior among businessman in
Pantukan, Davao de Oro
Indictors t-value p-value Decision
Savings 0.272 0.789 Ho is not rejected
Budgeting 1.518 0.149 Ho is not rejected
Investing 3.157 0.006 Ho is rejected
 39

CHAPTER IV

SUMMARY, CONCLUSION, AND RECOMMENDATION

This chapter presents the summary of the findings, conclusions, and recommendations derived from

the results of the study on financial literacy and financial behavior among businessmen in Pantukan, Davao

de Oro.

Summary of the Findings

The extent of financial literacy among businessmen in Pantukan, Davao de Oro is agree (3.75), the

indicators about the savings is agree (3.96), the indicators about the budgeting is agree (3.88), and the

indicators about the investing is agree (3.41).

The level of financial behavior among businessmen in Pantukan, Davao de Oro is agree (3.53), the

indicators about the purchasing behavior is agree (3.98), the indicators about the long-term goals is agree

(3.81), and the indicators about the incidence of debt is neutral (2.80).

There is no significant relationship between financial literacy and financial behavior among

businessmen in Pantukan, Davao de Oro, the independent variable is (3.75) and dependent variable (3.53),

the null hypothesis is rejected.

There is no domain of financial literacy that significantly influences financial behavior among

businessmen in Pantukan, Davao de Oro. The null hypothesis for savings and budgeting is not rejected,

while the null hypothesis for investing is rejected.

Conclusion
Despite the correlational nature of this study, meaningful conclusions can be drawn from the data

gathered. Based on the findings of the study:

1. Savings among businessmen in Pantukan, Davao de Oro, in financial literacy is Agree. On the other

hand, savings are Agree.

2. Budgeting among Businessmen in Pantukan Davao de Oro, in financial literacy is Agree. On the

other hand, budgeting is Agree.

 40

3. Investing among businessmen in Pantukan Davao de Oro, in financial literacy is Agree. On the other

hand, investing is Agree.

4. Purchasing Behavior among businessmen in Pantukan Davao de Oro, in financial behavior is

Agree. On the other hand, purchasing behavior in financial behavior is Agree.

5. Long-term financial goal among businessmen in Pantukan Davao de Oro, in financial behavior is

Agree. On the other hand, Long-term financial in financial behavior is Agree.

6. Incidence among businessmen in Pantukan Davao de Oro, in financial behavior is neutral. On the

other hand, incidence of debt in financial behavior is Agree.

7. There is a significant relationship between financial literacy and financial behavior among

businessmen in Pantukan, Davao de Oro.

8. There is a domain of financial literacy that significantly influences financial behavior among

businessmen in Pantukan, Davao. Investing significantly influences Financial Behavior among

businessmen in Pantukan, Davao de Oro, with Investing showing the strongest effect. In contrast,

Savings and Budgeting do not have significant effects.

This study highlights a significant relationship between Financial Literacy and Financial Behavior

(Spearman’s rho = 0.728, p < 0.001) and identifies Investing as an important predictor of Financial Behavior

(B = 0.302, p = 0.006), while Savings and Budgeting do not significantly contribute. These findings suggest

that investing literacy is an essential factor in influencing positive financial behavior among businessmen in

the area.

Recommendations

Based on the study's findings, the following recommendations are proposed to enhance the financial

literacy and financial behavior of businessmen in Pantukan, Davao de Oro:

1. Enhance Investment Knowledge

According to Lusardi & Mitchell (2014), a strong understanding of investment options like

stocks, bonds, and other financial instruments significantly contributes to better investment

decisions. Businessmen who are more knowledgeable about diversifying their investments and

managing risks tend to have better financial resilience. In this study, the data revealed that investing

knowledge was a significant predictor of positive financial behavior among Pantukan businessmen.
 41

This supports the recommendation to implement targeted educational programs on investment

diversification and risk management to improve decision-making.

2. Promote Long-Term Financial Planning

Mandell (2008) highlighted how crucial long-term financial planning is for entrepreneurs.

Financial success is more likely for those who create and carry out financial strategies that

complement their long-term objectives. According to the report, businesspeople in Pantukan

typically have long-term financial objectives, but systematic investments and savings should receive

more attention. These behaviors would be strengthened by workshops on developing and

implementing long-term financial strategies, which would be consistent with the body of research

supporting organized planning as the foundation of financial stability.

3. Debt Management Workshops

The research conducted by Bernheim et al. (2001) highlighted that understanding debt

management—such as recognizing the cost of borrowing and having clear strategies for repayment

—can lead to healthier financial habits. While businessmen in Pantukan show a cautious approach

toward debt, improving their debt management skills is crucial. This aligns with the study’s finding of

a neutral attitude toward debt, indicating the need for educational workshops to better equip

businessmen with tools to avoid excessive borrowing and handle financial challenges more

effectively.

4. Emphasize Diversification in Financial Strategies

According to Markowitz (1952), diversification is a key strategy for managing investment risk.

A diversified portfolio, spreading investments across various asset classes, can reduce the overall

risk and increase financial stability. This is relevant to the findings of this study, where

businessmen's investments were not as diversified as they could be. Educating businessmen about

the importance of diversification in both savings and investment portfolios will help them better

manage risks and achieve more sustainable financial growth.

5. Regular Financial Literacy Assessment.

Regular evaluations of financial literacy can result in ongoing progress in financial decision-

making, according to Lusardi and Mitchell (2011). Because it can help them adjust to shifting

financial conditions and trends, businessmen should regularly review and refresh their financial
 42

knowledge. This necessity for continuous learning to guarantee businessmen remain

knowledgeable and keep improving their financial conduct is reflected in the recommendation for

frequent financial literacy exams.

6. Encourage Peer Learning and Networking

Research by Coleman (1990) and Campbell (2006) highlights the importance of networking

and peer learning in the growth of financial literacy. In addition to encouraging the adoption of solid

financial strategies, peer discussions, shared experiences, and collaborative learning assist

business owners in staying current on financial best practices. Promoting networking and peer

learning among Pantukan businesspeople would create a helpful environment where everyone can

cooperate to improve financial practices.

By implementing these recommendations, businessmen in Pantukan, Davao de Oro can strengthen

their financial literacy and behavior, contributing to their long-term financial stability and business success.
 43

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