OFW families should invest more, says BSP

Lawrence Agcaoili - The Philippine Star

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has stressed the need for the beneficiaries of cash remittances from overseas Filipinos to invest more, amid the increasing access to financial services of migrant workers and their families.

BSP Governor Amando Tetangco Jr. said investments by overseas Filipino households has only increased to 6.5 percent in the first quarter of the year from 2.3 percent in 2007, while savings surged to 43.4 percent from 7.2 percent.

Results of the BSP’s Consumer Expectations Survey showed the percentage of beneficiaries using remittances to invest only almost tripled over the nine-year period, while those using remittances to save booked a six-fold increase.

“The challenge and the opportunity is to encourage more investments by overseas Filipino households,” he said.

Tetangco said the survey showed that 97.3 percent of overseas Filipino households use remittances to purchase food and other household needs.

Cash remittances went up 4.6 percent to a record $25.8 billion last year, while personal remittances inched up 4.4 percent to $28.5 billion.

Remittances accounted for 9.8 percent of the country’s domestic output as measured by the gross domestic product.

Personal and cash remittances have been a dependable source of strength for the Philippine economy, amounting to $228 billion between 2005 and 2015.

“The importance of remittances for enhancing the financial stability of overseas Filipinos and the economic growth of our country cannot be overemphasized,” Tetangco said.

The World Bank has ranked the Philippines as the third largest remittance-receiving country after India and China.

The BSP chief said banks and financial institutions should develop and promote products suited for the needs of overseas Filipinos.

“Financial education is essential for overseas Filipinos to realize the opportunities – as well as possible pitfalls – in investments. Equally important, financial institutions should consider it their responsibility to inform overseas Filipinos of their rights and protection as financial consumers,” he added.

According to Tetangco, the BSP has put in place policies and programs to enable the development of a wide range of products that could cater to the needs of overseas Filipinos and their beneficiaries through a nationwide Economic and Financial Learning Program.

Through the National Strategy for Financial Inclusion, the BSP together with 12 other government agencies, would provide a financial system that is accessible and responsive in greater financial inclusion.

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