OFW families investing more – BSP survey

MANILA, Philippines – More beneficiaries of overseas Filipino workers (OFWs) are shifting to investments and savings but at the same time are keen on undertaking major purchases such as the acquisition of houses and motor vehicles, a ranking official of the Bangko Sentral ng Pilipinas (BSP) said.

BSP assistant governor Cyd Tuano-Amador said the central bank’s first quarter 2012 Consumer Expectations Survey (CES) showed that the percentage of households with family members abroad that allocated portions of their remittances to investments increased to 8.5 percent in the first quarter of the year from 6.4 percent in the fourth quarter of last year.

Amador said the percentage of households that allocated portions of their remittances to savings was steady at 42.7 percent in the first quarter of the year from 42.6 percent in the fourth quarter.

She pointed out that there has been a major shift in the utilization of remittances by the beneficiaries as only 7.2 percent saved the money sent home by their loved ones from abroad when the survey started in 2007.

Likewise, the percentage of households that invested remittances was only 2.3 percent in 2007.

Despite the continued shift to investments and savings, she pointed that beneficiaries of remittances from overseas Filipino workers (OFWs) are also able to undertake major purchases.

The survey showed that the percentage of those who used the money sent home by their relatives abroad to purchase houses jumped to 15.2 percent from 11.4 percent while those that acquired motor vehicles went up to 8.7 percent from 8.3 percent.

However, the BSP official said the percentage of those using remittances to buy consumer durables such as appliances declined to 25.9 percent in the first quarter of the year from 27.4 percent a quarter-ago.

Of the total 5,852 household respondents of the survey conducted between January 23 and February 8, the BSP said about 589 households with relatives abroad received remittances.

The BSP said OFW households continue to utilize their remittances primarily for food, education, medical expenses, and debt payments.

BSP Governor Amando Tetangco Jr. earlier urged beneficiaries of remittances to channel the money sent home to the Philippines by their loved ones overseas for more productive uses such as savings and investments.

Tetangco said during the signing of a memorandum of agreement (MOA) between the central bank and the Commission on Filipinos overseas on the Remittance Development Council stressed the need for beneficiaries of overseas remittances to save and invest more.

“We would like to harness the potential the use of remittances for savings and investments,” Tetangco stressed.

Higher remittances result in stronger external payments position boosting the country’s buffer fund to fend off the impact of global shocks.

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 Philippine economy.

“While remittances boost economic activity through higher private consumption, the potential of remittances for other productive uses such as savings and investments has yet to be maximized,” the BSP chief.

Last year, remittances accounted for nine percent of the country’s domestic output as measured by the gross domestic product (GDP).

As of 2010, there were 9.45 million OFWs worldwide of which 47 percent are permanent residents, 45 percent are temporary migrants, and seven percent are irregulars. –Lawrence Agcaoili (The Philippine Star)