More OFW families turn to savings

MORE HOUSEHOLDS ARE NOW saving the money sent to them by relatives working abroad, a survey by the Bangko Sentral ng Pilipinas showed.

The quarterly survey involved 486 OFW households.

The BSP said that 39.9 percent of households receiving money from overseas Filipino workers said they were saving a a portion of the remittances—a significant rise from the 30.4 percent seen in in the third quarter of last year.

Also, in the second quarter of this year, only 38.3 percent of respondent-households engaged in savings.

BSP officials said the increase in OFW savings was a welcome development, explaining that the rise in bank deposits would provide the needed funds to support investments.

Amando Tetangco Jr., governor of the central bank, also said savings by OFWs would help secure the country’s future.

The survey also showed a year-on-year increase in the number of households that allotted money for investments.

OFW households that engaged in investment activities in the third quarter stood at 7.6 percent of respondents, up from 7.4 percent in the same period last year.

The percentage number of OFW households that invested, however, was lower than the 8.3 percent reported in the second quarter.

Analysts said the global economic turmoil, which led to concerns about job security among OFWs, forced many households to save more.

Rather than invest the money sent in from abroad, people were forced to place their cash securely in banks, fearing the risks brought on by the crisis. This risk aversion could have led to the quarterly drop in the number of OFW households that engaged in investment activities.

The BSP said it would promote financial literacy among OFWs and their households. It had conducted road shows in various countries, educating OFWs about investments and savings. The BSP likewise conducted seminars on the same topics among families of OFWs.

“We want OFWs and their families to become financially sophisticated,” Tetangco earlier said.

In the first half of the year, remittances sent to the Philippines amounted to $8.5 billion, up 2.9 percent from that in the same period a year ago.

The government reported that $16.4 billion in remittances were sent in last year.

Remittances could post a decent single-digit growth for the full year 2009, the BSP said. –Michelle Remo, Philippine Daily Inquirer