OFW households spending less on big-ticket items

OVERSEAS Filipino worker (OFW) households have reduced their expenditures on big-ticket items such as property and motor vehicles amid the peso’s strength, according to a survey by the Philippine central bank. In the latest round of its Consumer Expectations Survey, the Bangko Sentral ng Pilipinas (BSP) said OFW households that used remittances to buy consumer durables fell to 28.9 percent in the fourth quarter from 31 percent in the previous three-month period.

Survey respondents who bought cars fell from 11.3 percent to 7.7 percent, quarter-on-quarter.

The survey further showed that the percentage of OFW households that apportioned part of their remittances for amortization or full payment of home purchases also went down to 11.3 percent from 15.5 percent.

OFW households that allocated part of their remittances to investments likewise dipped to 5.8 percent from 7 percent in the previous quarter, while those that set aside money for savings stabilized at 43 percent over the past two quarters, from only 7.2 percent in the first quarter of 2007.

Of the 534 households with OFWs, 96.7 percent said they spent part of their remittances on food and other household needs.

About 72.6 percent of respondents said they allocated their remittances for education, while 61.1 percent said they used the money for health care.

Nearly half said they used the remittances for debt payments.

The survey was conducted on October 1 to 15 this year, when the peso averaged 43.44 to the US dollar, down from the previous month’s 44.31 average.

The peso-dollar exchange rate has lost five percent since the January average of P46.02:$1.

Money sent home by Filipinos working abroad grew by 7.8 percent to $13.8 billion in the first nine months this year, from $12.8 billion last year.

For this year, the BSP expect remittances to grow by 8 percent from the 2009 full-year inflows of $17.3
billion.

For the first quarter of next year, more households expect that their expenditures on basic goods and services, specifically on food, electricity, fuel, personal care and transportation, to go up, indicating that substantial inflationary pressure could come from these goods and services.

The BSP earlier reported that consumer confidence hit an all-time high of -8.5 percent in the current quarter from -14 percent in the previous quarter amid the country’s sound macroeconomic fundamentals and brighter prospects ahead.

Inflation in November was recorded at 3 percent or slightly higher than the previous month’s 2.8 percent.

Last month’s price uptick brought the year-to-date average inflation to 3.8 percent or close to the lower end of the BSP full-year target of between 3.5 percent and 5.5 percent.

BSP Gov. Amando Tetangco Jr. had said the central bank would continue to monitor the impact of new policy measures in major economies on domestic liquidity, global growth prospects and investor risk appetite to see if adjustments are needed. –LAILANY P. GOMEZ REPORTER, Manila Times