OFW beneficiaries cut down savings

BENEFICIARIES of overseas Filipino worker (OFW) remittances cut down on their savings in the aftermath of the worst global financial crisis in decades. In its latest Consumer Expectations Survey, the Bangko Sentral ng Pilipinas (BSP) said that the percentage of households that allocated portions of their remittances to savings went down to 38 percent in the second quarter from 50.4 percent in the previous quarter.

Of the 534 households with OFWs, 96.3 percent said that they spent part of the remittances for food and other household needs.

About 64.2 percent of respondents used their remittances for education expenses, 51.4 percent for medical expenses and 43.3 percent for debt payments.

The percentage of OFW households that spent remittances to buy consumer durables and motor vehicles was steady at 27 percent and 7.7 percent, respectively.

Those that apportioned part of their remittances for amortization or full payment for houses decreased to 11.9 percent from 15 percent in the previous survey.

Households using their remittances for investments inched up to 7.2 percent from 5.8 percent in the first quarter.

At end-March, the consumer loans of the country’s large banks reached P417.2 billion, or a percent higher than the end-February amount of P413.1 billion.

Of the total consumer loans, residential real estate loans accounted for the bulk at 40.3 percent.

The BSP had said that consumer confidence over the next 12 months turned more optimistic.

In particular, the second quarter confidence index jumped to 10 percent from 5.1 percent a quarter ago and -7.6 percent during the same period last year.

The second quarter marked the second highest level in consumer optimism since the nationwide survey started in 2007, even as pessimists continued to outnumber the optimists but only by a small margin.

Fewer households—or 42.6 percent from 44.6 percent in the previous quarter—expected that their expenditures on basic goods and services would go up in the third quarter mainly because of expectations of lower inflation rates for the year ahead, the BSP said.

The consumer confidence index weakened in the second quarter with overall sentiment declining to -28.7 percent from -27.6 percent in the previous quarter.

The survey was conducted from April 5 to 16, with a total sample size of 5,706 households, of which 54.4 percent were from Metro Manila and 45.6 percent from areas outside the region. –LAILANY P. GOMEZ REPORTER, Manila Times