OFW households increase savings, cut investments

THE Philippine central bank said the use of remittances has continued to improve since the previous quarter as the savings index of overseas Filipino worker households increased.

The latest run of the Consumer Expectations Survey conducted by the Bangko Sentral ng Pilipinas showed that the percentage of OFW households that allocated portions of their remittances to savings rose to 42.6 percent in the fourth quarter this year from 35.5 percent during the previous quarter.

This developed after the percentage that apportioned the part of their remittances for investments dropped quarter-on-quarter from 9.1 percent to 6.4 percent, the BSP said.

Of the 563 households that received remittances in the last quarter, 95 percent said they spent part of their remittances for food. Nearly three-fourths of the households surveyed or 70 percent said they allocated their remittances for education, 60.9 percent for medical payments and 45.8 percent for debt payments.

Those that apportioned part of their remittances to buy consumer durables, housing and motor vehicles also went up, quarter-on-quarter, to 27.4 percent from 26.9 percent, 11.4 percent from 9.3 percent and 8.3 percent from 5.7 percent, respectively.

The central bank said respondents considered the last quarter of 2011 a favorable time to buy these big-ticket items despite the weaker current quarter sentiment in connection with benign inflation outlook over the next few months.

Similarly, buying intentions for big-ticket items in the year ahead surged to 10 percent, the highest since second quarter of 2008 owing to the rise in buying intentions for consumer durables and real estate, which offset the decline in buying intentions for motor vehicles.

“The buying conditions index during the quarter reached its highest level in four years. Easy installment terms contributed to consumers’ favorable buying conditions outlook in the current quarter,” Ma. Cyd Amador, BSP assistant deputy governor, told reporters.

She added that the overall improvement in buying intentions is consistent with the more favorable consumer sentiment on family income and family financial situation for the near term and the year ahead.

OFW remittances rose to $1.8 billion in October, up 6.2 percent from a year ago. The October cash transfers were also the highest monthly level of remittances recorded thus far.

For the first 10 months, remittan-ces reached $16.5 billion, registering a year-on-year expansion of 7 percent.

The BSP is optimistic it will hit the 7-percent or $20.1-billion growth projection in remittances this year. –LAILANY P. GOMEZ REPORTER, Manila Times