More OFW families saving more, investing less
MANILA, Philippines - More beneficiaries of overseas Filipino workers (OFWs) are turning to savings but are investing less, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.
BSP Deputy Governor Diwa Guinigundo said the second quarter 2012 Consumer Expectations Survey (CES) showed an increase in the percentage of households with family members abroad that allocated portions of their remittances to savings to 38.7 percent in the second quarter from 33.7 percent in the first quarter.
Guinigundo explained that the percentage of households receiving remittances from their loved ones abroad in the second quarter was way higher than the 10.7 percent recorded in the first quarter of 2007 when the CES was launched.
Aside from savings, the survey showed that the percentage of OFW households using remittances for education climbed to 67.2 percent in the second quarter from 64 percent in the first quarter in time for the opening of the new school year.
On the other hand, the percentage of OFW households allotting remittances for investments declined to 5.5 percent in the second quarter from 6.1 percent in the first quarter.
The BSP survey further showed that OFW households using remittances to buy motor vehicles declined to 3.8 percent from 6.1 percent, to acquire houses to 8.4 percent from 9.1 percent, and to buy appliances to 17.6 percent from 20.5 percent.
OFW households continue to utilize their remittances primarily for food, education, medical expenses, and debt payments in the fourth quarter of the year.
This year, the BSP sees the growth of OFW remittances slowing down to five percent after growing by 7.2 percent to a record $20.1 billion last year.
Latest data from the central bank showed that the amount of money sent home by OFWs went up by 5.4 percent to $6.543 billion in the first four months of the year from $6.21 billion in the same period last year on the back of steady demand for skilled Filipino workers abroad and expanded access to services offered by banks and financial institutions.
Higher remittances result to stronger external payments position boosting the country’s buffer fund to fend off the impact of global shocks.
Robust OFW remittances also boost private consumption resulting to stronger gross domestic product (GDP) growth. Private consumption accounts for about 70 percent of the country’s domestic output that is expected to expand between five percent and six percent this year.