OFWs saving more – BSP

MANILA, Philippines – Beneficiaries of overseas Filipino workers (OFWs) are turning to savings and investments as the country posted a surprising economic rebound in the first quarter of the year after, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Rosabel Guerrero, director of BSP’s Department of Economic Statistics (DES), said the percentage of OFW beneficiaries that earmarked portions of remittances from OFWs increased to 43 percent in the third quarter from 38 percent in the second quarter and from only seven percent in the first quarter of 2007 when the quarterly survey was started.

“The percentage of households that allotted portions of remittances to savings continued to increase to 43 prcent (from a low of 7.2 percent in the first quarter of 2007),” Guerrero stressed.

She reported that about seven percent of the beneficiaries of OFW in the third quarter are turning to investments from 7.2 percent in the second quarter and from only 2.3 percent in the first quarter of 2007 when the survey was started.

“On the other hand, the percentage of OFW households that allocated portion of their remittances to investments remained steady at seven percent in the third quarter of 2010,” she added.

Families of OFWs have realized the importance of savings and investments as the country’s gross domestic product (GDP) posted a surprising growth of 7.9 percent in the first half of the year from 1.2 percent in the same period last year. The country’s GDP grew by 7.9 percent in the second quarter after expanding by 7.8 percent in the first quarter of the year.

Data showed that about 96 percent of the households with OFWs used the remittances for food, 71.7 percent for education, 61.6 percent for medical expenses, and 50.3 percent for debt payments.

“OFW households utilize their remittances primarily for food, education, medical expenses, debt payments, and savings in the third quarter of 2010,” Guerrero said.

The BSP official also reported that the percentage of respondents with OFW households that used their remittances for the purchase of motor vehicles, appliances, and houses increased in the third quarter from the second quarter.

The percentage of OFW households that used the remittances for the purchase of appliances and other consumer durables increased to 31 percent in the third quarter from 27 percent in the second quarter while those who used the remittances for the purchase of motor vehicles went up to 11.3 percent from 7.7 percent. The percentage of those who used remittances for the purchase of houses increased to 15.5 percent from 11.9 percent.

Latest data from the central bank showed that OFW remittances went up by 7.1 percent to $10.679 billion from January to July this year compared with $9.973 billion registered in the same period last year as remittances from sea-based Filipino workers grew by 9.4 percent while that of land-based workers rose by 6.5 percent.

Main sources of OFW remittances include the US, Japan, Singapore, United Arab Emirates, and Italy. These countries accounted for 81.7 percent of the total remittances in the first seven months of the year. –Lawrence Agcaoili (The Philippine Star)