OFW kin saving less due to strong peso – BSP

MANILA, Philippines – A survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed that beneficiaries of overseas Filipino workers (OFWs) are saving less in the third quarter of the year due to the continued appreciation of the peso against the dollar.

Results of the BSP’s 3rd Quarter Consumer Expectations Survey (CES) showed that the percentage of households of OFWs that set aside money for savings has declined to 35.5 percent in the third quarter of the year from 44 percent in the second quarter of the year.

The figure was also way below the 43 percent recorded in the third quarter of last year.

“The appreciation of the peso decreased the value of remittances in peso terms, hence, a smaller amount could have been apportioned by households for savings and purchase of big-ticket items,” the BSP explained.

The BSP added that the percentage of households that apportioned part of their remittances to purchase consumer durables, houses and lots, and motor vehicles recorded a significant decline compared to the previous quarter’s results.

Data showed that of the 651 households that received OFW remittances in the third quarter, about 96.7 percent used remittances for food. More than two-thirds of the households or 68.7 percent surveyed allocated their remittances for education, 55.7 percent for medical payments, and 45.6 percent for debt payments.

On the other hand, the central bank said beneficiaries that apportioned part of their remittances for investment increased to 9.1 percent in the third quarter from 6.8 percent in the quarter.

The BSP said this was the highest level in terms of investments for OFW families since the survey was first conducted in the first quarter of 2007.

The BSP has been encouraging beneficiaries of remittances from their loved ones working overseas to save and invest regularly to improve the financial condition of the economy.

OFW remittances climbed 6.3 percent to $11.35 billion in the first seven months of the year from $10.679 billion in the same period last year on the back of the sustained demand for skilled Filipino manpower amid the economic growth concerns in the US, the debt crisis in Europe as well as the tensions in the Middle East and North African (MENA) states.

Remittances from land-based Filipino workers inched up by 4.3 percent while that from sea-based workers rose 14.1 percent in the first seven months of the year.

Data released by the BSP yesterday showed that about 83 percent of the total remittances from January to July came from the US, Canada, Saudi Arabia, the United Kingdom, Japan, Singapore, United Arab Emirates, Italy, and Germany.

For the month of July alone, OFW remittances increased by 6.1 percent to $1.715 billion from $1.616 billion in the same month last year. The remittance in July was the second highest monthly record after the record monthly level of $1.737 billion booked last June.

OFW remittances went up by 8.2 percent to a new record level of $18.8 billion last year and contributed about 10 percent to the country’s gross domestic product (GDP). –Lawrence Agcaoili (The Philippine Star)