Number of households with savings up in Q2

MORE Filipino households were able to set aside money as savings in the second quarter, as the country’s economic prospects turned rosier in the April-to-June period based on a survey conducted by the Bangko Sentral ng Pilipinas (BSP).

Under the survey, the central bank said the percentage of households with savings increased to 30.3 percent from savings rate of only 28.9 percent a quarter earlier and the 22.4 percent in the same period last year.

The various households set aside money from their income to finance so-called emergency expenses, or for health and hospitalization, retirement, education and for business capital and investment, according to the central bank.

Earlier this year, BSP Deputy Governor for the Monetary Stability Sector Diwa Guinigundo said the higher savings rate provide an added boost to one of the region’s fastest-growing economies.

He said if households are able to set aside money and deposit these as savings, the banks, as intermediaries, could deploy them as loans to the various producers and manufacturers, increasing the country’s potential output.

The central bank said as of end-June this year, 65.2 percent of household savers have bank deposits, while the other 23.5 percent still kept their savings at home while 11.4 percent put their money in cooperatives, paluwagan schemes and other credit or loan associations, as well as in government nonfinancial institutions.

The central bank also said while the number of savers in the country may be rising quickly, the distribution of savers remains a key point of improvement.

According to the central bank, the households with savings increased among the middle- and high-income groups but remained steady in the low-income segment.

The central bank also said that while the number of savers increased, the percentage of respondents who could increase their savings in the second quarter of the year declined from 38.3 percent to 35.7 percent.

Also noted in the survey was the number of households that were remittance recipients from Filipino migrant workers.

The central bank said the percentage of overseas Filipino workers (OFW) households that utilized their remittances for savings rose to 46.6 percent in the second quarter from 45.4 percent in the first quarter. This was the second highest savings percentage of OFW families since the survey started in 2007.

Food and other household needs remained the top allocation for remittances in the second quarter, followed by education, medical expenses and debt payments. –Bianca Cuaresma, Businessmirror