"One of the headline stats we identified was that 64% of families would not be able to afford a hospital bill of 10,000 pesos without having to borrow or use an HMO or health insurance plan. Ten thousand pesos is under 200 US dollars, an extremely small amount of money, and the fact that two thirds of the population is unable to afford that was quite shocking." - Lance Katigbak, Principal at BCG Manila


"The first thing we learned is that there are six different kinds of Filipino families. When asked to define a family, most people describe two parents and two kids, but in reality this standard nuclear structure represents less than half of the Philippine population. The third and more interesting segment is multi earner families, where more than two people work and make a living. These include sandwich families made up of grandparents, parents, and kids, as well as extended families that add an uncle, cousin, or another relative." - Lance Katigbak, Principal at BCG Manila


"So we ran a survey called the Filipino Dream last year, and the top two dreams that emerged were financial security to absorb health scares and starting a business. To understand why these rank highest, it is important to note that when Filipinos talk about financial security against health risks, they are not most afraid of getting sick themselves but of a family member getting sick. When a mother or grandmother falls ill, the entire family is expected to pitch in and help pay for the hospital bill." - Lance Katigbak, Principal at BCG Manila

Lance Katigbak, Principal at BCG Manila, joins Jeremy Au to break down why Filipino households, not individuals, are the true drivers of economic decisions in the Philippines. Drawing from BCG’s large scale research on the Filipino family, they explore how family structures shape spending, saving, and borrowing behavior, and why health risk sits at the center of financial anxiety. The conversation covers multi earner and extended households, the role of informal lending, and how overseas Filipino workers remain deeply involved in family decisions from abroad. Lance also explains why most products miss the market by designing for individuals, and how companies can unlock real opportunity by building for the household instead.

03:25 Filipino families fall into six major structures: Nuclear families make up less than half of households, with one earner, dual earner, and multi earner families each representing about a third of the population.

09:07 Informal lenders understand households better than banks: Five six lenders assess family level ability to repay, unlike formal finance that underwrites individuals.

13:01 Debt is driven by medical necessity: Paying off debt is the top priority for the poorest families, with health emergencies as the main trigger for borrowing.

18:35 Overseas Filipino workers anchor household budgets: OFWs send home most of their income and remain actively involved in family decisions through constant communication.

23:17 The Filipino dream centers on family security: Top goals are financial protection against health shocks and starting small stable businesses.

29:16 Spending roles differ by gender: Women often manage savings and budgets while men more often handle investments and hardware purchases.

32:04 Families seek modest upgrades, not luxury: Aspirations focus on stress free groceries, affordable dining out, and daily stability rather than status.

Jeremy Au (00:42) Hey Lance, I'm excited to have you on the show.

Lance Katigbak (00:44) Hey Jeremy, thanks for having me.

Jeremy Au (00:45) Yeah, I mean, I'm excited because, you know, there's so much to talk about, because you just launched a report on the Filipino family. And I think there's obviously a lot of information gaps about the Philippines as a market and, two, you're talking about the family, which is often, of course, a private matter or family matter. And so it is really interesting both to me, but also I'm sure to many folks who listen to the podcast. Lance, could you introduce yourself?

Lance Katigbak (01:07) Yeah. My name is Lance Katigbak. I am a principal at BCG's Manila office. My focus here is really on first understanding consumer dreams and aspirations. We've been writing a series of thought leadership pieces that started with a report called The Filipino Dream, where we tried to answer the question: what do Filipinos dream of?

We followed that up with a second report called Heart of Hustle, where we tried to understand what MSMEs were interested in and why they started businesses. And we recently launched our third report on the Filipino family. Outside of that, my focus in BCG is really on consumer and on business transformation—so working with clients who really want to turn around and change the trajectory of their business.

I've been at BCG since 2016, but between 2020 and 2024, I left to become the first employee of a fintech startup in the US called Claire. We were in the earned wage access space, which for those of you who are not super familiar with fintech, is basically giving people an advance on their earnings before payday. And we were one of the first players to do it in the US for free. Other than that, I studied film production at Harvard for undergrad, and I love to cook. I love to run and play badminton, and I have two dogs and a wife.

Jeremy Au (02:11) Amazing. So I mean, I guess we shared that half a connection. But today, you know, instead of talking about alumni days, I think we'll just focus on the report and what you have. BCG did work to survey over 1,500 Filipino households, which is a large number, right? So what was the genesis behind this report? What was driving the desire to do this research?

Lance Katigbak (02:33) You know what, BCG is a global firm, and for us, what's important here in the Philippines is to really have that kind of local context and local anchorage, right? It's not enough to have global insights; you really have to understand how they connect to the local context. So for us, we decided to do a lot more of these thought leadership pieces so we could have a better understanding of the local market.

But when it came to the kind of work that we wanted to do, I think it really started with trying to understand what it is that all our clients would find interesting. I think there's a lot of topics that a few people would find interesting. But if you think about the vast majority of Filipino businesses, what do they share in common? And the main thing we figured out is that they're all interested, really, in helping improve the lives of everyday Filipinos.

That's why we looked at The Filipino Dream, which was the first survey that we did. But when we did that survey, the one thing that all the respondents told us is that they don't actually dream for themselves—they dream for their families. And so we said, you know what? Let's study the family.

We all know that families are a really important part of the Philippine household, and I think also a very important part of many, many different countries. But we said, why is it that we oftentimes when we do consumer research, we only look at individuals? We only look at how individuals make decisions. We never tried to understand, how do the families make decisions? How do things work in this kind of microcosm of the economy? And so that was really the spark that ignited within us to say, let's go beyond studying the individual. Let's actually try to understand the Filipino family.

Jeremy Au (03:56) So the Filipino family—tell us what's so special about the Filipino family? Why can't I just look at the Vietnamese family or the Indonesian family or the Southeast Asian family? What's so special about the Filipino family?

Lance Katigbak (04:07) I'm sure there's something special about every single one of those families that you mentioned, which I don't know because we haven't done that work. But I can tell you what I think is quite interesting that we learned about the Filipino family.

I think the first thing that we learned is that there's actually six different kinds of Filipino families. I think oftentimes if you ask how would you define the family, you'd probably describe it as two parents and two kids. But actually in reality, that kind of standard nuclear family structure only represents less than half of the Philippine population.

If you actually break it down, you break it down into thirds. The first third are families with one earner, and you basically have either your nuclear families with a breadwinner or your solo parents (one parent, two kids). Then you have your dual-earning households; you either have households with kids or nuclear families, and then those without kids or what we call DINKs—dual income, no kids.

And then you have your third segment. And this is really, I think, the more interesting one where you have multi-earner families. So families where there's more than two people who work and make a living. And there's two kinds: first you have your sandwich family, which are your grandparents, your parents, and kids; and then you have your extended family, which is kind of a grandparent, two parents, kids, and then an uncle, a cousin, or somebody else. So there's both a vertical and a horizontal component.

Each of these structures basically makes up a third of the Philippine population. If you just took the average household size—which is like 4.2 or 4.3 people per house—you would actually miss out on those on the lower end (those with two or three people) and those on the higher end (those with six, seven, or even eight people in the household). And I can assure you that decision-making dynamics and the ways they operate as a family are very, very different if you are a nuclear family versus an extended family. That was the very first thing that we learned.

Second thing that we learned is that these families tend to prioritize a lot of the basics still. The top three priorities were: one, financial security to absorb health scares; second, setting up a large savings fund; and the third was to improve daily nutrition and food quality. These are, unfortunately, I think, quite basic, right? They're not prioritizing moving into a dream home. They're not prioritizing being able to travel or be able to save a lot of money to be able to do something like buy a car. They're actually just focused on the basics.

Perhaps the third thing that we really learned about the Filipino family is that they are so, so concerned and so, so worried about health. One of the headline stats we identified was that 64% of families would not be able to afford a hospital bill of 10,000 pesos without having to borrow or use an HMO plan or health insurance plan. 10,000 pesos is under 200 US dollars. It's an insanely small amount of money. And the fact that two-thirds of the population is unable to afford that was really quite shocking. Those are the headline findings from the report.

Jeremy Au (06:51) Well, those are many headline reports and I think there's a lot to dig into each one. But maybe we'll start first with the types of family households that you mentioned, right? So obviously we talk about sandwich, we talk about nuclear. Everyone knows what a nuclear family is. But talk a little bit more about the different types of families, because you also mentioned extended families. So just walk me through what the stack of composition changes and what it means from your perspective.

Lance Katigbak (07:15) Yeah, I think the way that I would think about it, Jeremy, is that oftentimes when we sell to individuals—whether we're selling groceries or tech software—we think about selling to those who are earning, right? The parents, usually the worker; they're the ones that we tend to target because we assume that they're the ones with the money, which is true most of the time.

But what we saw in the report was actually that across the different family structures, the division of labor was such that those who are earning are not necessarily the ones who are spending, right? Think about a breadwinner household. You have one person, usually in the Philippines it's the father who's working, and then it's the mother who stays at home to take care of the kids. You can very well be sure that it's not the father who's making most of those decisions. It's actually the mother who's deciding on groceries and things like that. That's a pretty obvious one.

But how would that change in a household like an extended family where you have potentially four adults making the decision: a grandparent, two parents, and an uncle or aunt? What we saw here is that for many of these households, they actually end up forming a kind of committee of decision-makers. The four people in the household end up being a kind of coalition where they decide together what to buy.

Now there's different ways that that's actionized. In some households, they are kind of divide-and-conquer style: you're in charge of the groceries, you're in charge of the bills, you're in charge of the car. But in other households, it's actually more of everyone kind of having this constant ongoing conversation to decide what is important and what is sacrificed.

That's very different from a solo parent household, for example, where you have one person who usually, because they are both the breadwinner and the primary caregiver, ends up having to rely on household help, right? A maid or a nanny to take care of the kids. And in those households, what you actually saw is that the helpers play a more prominent role. They end up making decisions on groceries; they end up making decisions on how to manage the household because the solo parent just doesn't have the time or the headspace to do it. And sometimes it's also the kids who end up taking this bigger role.

Jeremy Au (09:23) So one interesting thing is that brands are focused on individuals—the American model where every man is a king and has their own kingdom—versus this coalition/committee board dynamic. So what are some of the gaps that happen because of this misunderstanding or inability to appreciate the Filipino family structure and diversity?

Lance Katigbak (09:49) The way I think about it a lot is if you take a look at the kind of industries where you have both a formal system and an informal system, you realize that the informal system exists because the formal system doesn't meet all the needs.

I'll give you a very concrete example in the Philippines. There is a concept of lending called "5-6" lending. It's 5-6 because you borrow five and you pay back six. It's a 20% usually monthly interest rate. It's a very expensive form of loan. And usually, if you're going to borrow from a 5-6 lender, this person is not just assessing your personal individual ability to pay; they are actually assessing the family's ability to pay. Because this person is going to go to your house to lend you the money, and he's going to come back to your house a few weeks later to collect that money. So he knows that it's not just about you; it needs to be about your entire family and your collective willingness to pay back a loan.

Now, compare that with a bank or any fintech app—there's only one person they're lending to, right? Maybe there's a co-guarantor at times, but it's very rarely the fact that they're underwriting an entire household. And if you consider the fact that in many households you actually have multiple people working—from our study, two-thirds of households have more than one earner—we're missing out on such a big portion of the market when we only try to lend to one person.

The other way to think about it is what are the "bad behaviors" or the ways that people misuse technology today? One thing we found in the report was that if you look at the penetration of mobile wallets in the Philippines—think GCash, Maya, Viber—you basically get 100% household penetration at the C3 level. So basically once someone gets to lower middle class, 100% of households have at least one mobile wallet.

Now when you look at that same statistic on the adult level (just percentage of adults), it gets to about 80% at the C3 level, but actually stays at 80% even as you get to Class A—the people making over $5,000 a month in monthly household income. What that means is that even as you get wealthier, you're not more likely to personally have a mobile wallet. We saw the same thing for bank accounts.

And I think what this really means is that in many households, people just decide to share a mobile wallet because that's how they manage money. They find it so complicated if you have multiple people paying for different things. They would rather have one person making all the financial decisions of the household. And because the kind of product does not exist from a financial sense, then people end up sharing mobile wallets. They have one smartphone that they just pass around to whoever needs to use the mobile wallet at that point.

So you end up having this impossible choice where you design for the individual, but in reality they end up actually using it as a family. And we miss out on this large segment of the market and this large opportunity to actually engage more people because the products are designed for the wrong person.

Jeremy Au (12:54) I think it's interesting because basically we're designing products for the individual while the family is not just nuclear but also extended in multi-generational formats. I'm curious because finance is a big part of it, and you also gave some headlines about financial security, debt, and having enough to pay for healthcare. Maybe why don't we start first with what you mentioned about financial debt? How do households think about budgeting or paying off debt?

Lance Katigbak (13:43) Very interesting question. One of the things we found in the survey is that if you look at the priorities of families by income, paying off debt is the number one priority of Class E families. These are the poorest of the poor families, those who make under $200 a month. And once you get to Class D, which is still poor but not extremely poor, then paying off debt starts to become a secondary priority. And by the time you get to the middle classes, it is no longer a priority. So the main finding we see is that debt is really something that people do because they have to and because they have no other choice.

The second finding is that there is a bit of a mismatch between the kind of lending products that are available versus the kind of products that people actually need. The number one reason we found that people borrowed money is actually for medical reasons—some unexpected medical emergency. And it's not very common that you can go out and find a medical loan, right? You can find a personal loan or an unsecured loan, but there are very few lenders who would actually lend to you specifically as a medical loan.

If you think about it, it should make sense that a financial institution should want to lend to somebody who is working and healthy but got into a medical situation, because paying off that bill would allow them to get back to work and earning. But because we haven't quite figured out a model yet for underwriting individuals, we end up focusing primarily on secured loans like housing or car loans, because those are easier to underwrite as hard assets. We haven't yet quite figured out the "soft asset."

And I think this is really where the family comes in. If you are a family where you have multiple people who are earning, it might be a little bit risky to underwrite just one person. But if you're able to underwrite multiple people and hold them equally accountable for something that's unsecured, I think as a company, you actually end up managing your risk a little bit more.

Jeremy Au (15:43) The statistic around most families not having enough savings for healthcare expenses—and feeling that it is highly risky because of the lack of insurance—was the top highlight for me, but also the most troubling. I mean, doesn't this feel like a no-brainer for somebody to fill the market with a family health insurance plan?

Lance Katigbak (16:07) Honestly, I don't think it's for lack of effort. On one hand, you have the government and PhilHealth propagating this national insurance plan; it's now technically universal coverage. I think there's a lot of efforts on the government side that we have to acknowledge.

The complexity we've seen in the private sector is that there's actually a kind of mismatch between who is insured and who actually needs the insurance. Most health insurance plans cover the working, usually healthy professional. You're between 25 to 60, you're working, and your company will offer you some kind of plan. But who they will not cover are your parents, who are maybe in their 60s or 70s and who actually need that kind of health insurance. And in some cases, they don't even cover your children, who end up having more hospital bills because their immune system is developing.

The challenge that needs to be answered is: how do we create the kind of coverage that is profitable for health insurers but covers both the working adult (lower risk) and those higher-risk segments who are just as important to cover because they are connected? If the parent gets sick, it's that working professional who's going to have to take off work anyway. So everybody is affected in the event of a health emergency.

Jeremy Au (17:35) Another interesting part is the presence of Overseas Filipino Workers (OFWs) as a country norm. I assume this also compounds the insurance issue, where the breadwinner is based overseas while the dependents (parents or children) are in the Philippines managing the household with remittance flows. Can you talk about this intersection?

Lance Katigbak (18:13) That's an interesting point. For many OFWs, even if they had health insurance in whatever country they were in (Middle East, US, or Singapore), it's very unlikely those companies are also providing health insurance to their family back in the Philippines.

The implication is that the family becomes the insurance plan of whoever is left behind. One thing we saw in the survey is that most OFWs actually leave behind families who are in extended setups. For example, if you're a family of four and the father goes abroad to work in the UAE, the mom and the two kids are more likely to actually move back in with the mom's parents (the grandparents). They end up forming this bigger structure, which helps them be a little bit more stable. And in the event of a health emergency, you also have more people who can help pitch in and care for the patient.

The second thing we saw with OFWs is that they actually send home a majority of their income. Most OFWs are actually parents. They send home on average about 60% of their personal income, which is responsible for about 75% of the household budget. Because they're contributing three-fourths of the budget, they have a vested interest to make sure that money is spent responsibly.

Can you imagine making this massive sacrifice of moving abroad and then finding out your family spent it on something you didn't agree with—maybe something unnecessary, vices, or a frivolous purchase? So about 80% of OFWs remain connected and involved in the decision-making of most households. We often think about OFWs as just people who send money home, but they are actually decision-makers and parents making decisions for what's best for their family.

Jeremy Au (20:51) So how do OFWs stay involved with their family decisions?

Lance Katigbak (21:00) We didn't survey exactly how, but 25% said they would be involved in day-to-day decisions. If you open up the imagination a bit, there's probably ongoing conversations on Messenger, WhatsApp, or Viber—asking what's going on, providing input into what to buy, and how much to spend.

This is new; this was not something that could have been done 10 or 15 years ago because it was really expensive to stay connected. But now, because it's become so affordable, it's basically normal to have this ongoing flow of communication between OFWs and their families.

Jeremy Au (21:51) One interesting aspect is that these OFWs are assimilating practices or knowledge from whatever country they're in. Do you see differences between OFW households versus non-OFW households?

Lance Katigbak (22:15) That's not something we looked at in this survey, but we got a lot of interest in the OFW topic, and we're doing a follow-up report called The Filipino Diaspora. Filipinos who are either working or living abroad remain quite connected to their families here. That's about to go into the field probably early next year, so I hope to share something back with you late in Q1.

Jeremy Au (22:39) Interesting. I want to be first in line to see that report. Very few countries have as large a diaspora as a percentage of population as the Philippines. It's so different from other diasporas where they've moved with their families permanently; here, they are raising kids back in the homelands. I want to circle back to the point about the dream being at the household level. What is the Filipino dream for the household?

Lance Katigbak (23:59) Yeah, so we ran the survey called The Filipino Dream last year. The top two dreams were: one, financial security to absorb health scares; and second, to start a business.

For many Filipinos, the thing they are most afraid of is not necessarily them getting sick, but a family member getting sick. If a grandmother gets sick, everyone in the family is asked to pitch in to help pay that hospital bill. You'll dig into your personal savings and travel plans, and all of that ends up going into the hospital bills.

This is where the business dream comes in. A lot of people believe that starting a business—and I'm talking about a sari-sari store, a water station, or a small shop selling rice—is what leads to financial security. They perceive these as stable recurring sources of income. They think if the family had a business, they would be protected and wouldn't be dependent on a company for help. Most people say this dream is for the family; the end beneficiary is really the family.

Jeremy Au (26:09) Birth rates are totally different across Southeast Asia. Singapore is at about 1.1, which is half the replacement rate. I'm curious how this Filipino dream household plays out for children.

Lance Katigbak (27:00) Interesting question. If you look at demographic data, the Philippines actually recently went below the replacement rate also. In 2020, we were at 1.9 kids per household. At the same time, marriages are getting delayed and household sizes have decreased—from 4.6 in 2010 to 4.1 in 2020.

We're seeing the emergence of DINKs. When we studied this demographic, they said they don't know if they can afford everything that comes with raising a kid.

On the point about dreams for children, when we ask clients what they think the top priority of families is, the most commonly guessed answer is education. But the good news is that public tertiary education has actually become free already due to a law passed a few years ago. Families can send their kids to public universities for free, and many of these are very good institutions. So families are more comfortable with the educational component being fulfilled.

Jeremy Au (29:13) I stand corrected then, because 1.9 is roughly in the same band as Vietnam and Indonesia. You also did research on the difference between male versus female decisions, right? What does that data-driven reality look like for spending roles divided by gender?

Lance Katigbak (29:58) There's two angles to look at: how many people make decisions for different categories and who is the main decider.

Some categories like groceries are mostly multi-decision-maker categories. 84% of households have multiple people deciding on the groceries. On the flip side, you have a category like hardware, which is primarily decided by one person, and it's usually the dad (70% of hardware decisions).

For companies, you have to recognize this nuance. For example, if you're an appliance store selling a washing machine and you only try to convince the mom that it saves time, but you don't talk to the dad—who might decide on the 12-month 0% interest financing—you might not make that sale.

There's also a primary decision-maker for financial roles. Savings are oftentimes decided by the mom, while investing is oftentimes decided by the dad. The men end up picking investing—maybe they like the technical aspect or the challenge—while women manage the savings and the spending budget. It's just the preference of the families for how they manage their money.

Jeremy Au (32:31) The last point in the report was about households pushing for a modest upgrade rather than ultra-luxury. What does this mean?

Lance Katigbak (32:46) Filipinos aren't aiming for luxury; they just want modest upgrades that make their lives better. We heard things like, "I just want to be able to do the groceries without bringing a calculator," or "I want to go to a restaurant without having to check the price of every item."

It goes back to seeking financial security. People are worried about illness, losing their job, or inflation—anything that could destabilize their family lives. They seek a sense of stability, and any company that helps them make that feel achievable will be well rewarded.

Jeremy Au (33:37) Awesome. I'd like to summarize the three big takeaways. First, focusing on the household rather than the individual. Second, the dynamics around lending and healthcare risk fear. And lastly, the Filipino dream regarding education, appliances, and daily living. Thank you so much, Lance, for sharing.

Lance Katigbak (35:38) Thank you so much, Jeremy. I really enjoyed our conversation today.