OFW families save, invest more in fourth quarter of 2018

MANILA, Philippines — More Filipino households opted to invest and save the money sent home by their loved ones from abroad instead of buying big ticket items such as houses or motor vehicles in the fourth quarter, according to results of a quarterly survey conducted by the Bangko Sentral ng Pilipinas.

Redentor Paolo Alegre, head of the BSP’s Department of Economic Statistics (DES), said the 4th Quarter Consumer Expectation Survey showed the percentage of OFW households using remittances to save in the fourth quarter increased to 35.5 percent from the previous quarter’s 32.7 percent.

The percentage of OFW households using remittances to save as of the fourth quarter was almost five times the 7.2 percent recorded when the CES was launched 11 years ago.

“The higher quarter-on-quarter percentage of OFW households that allotted remittances for savings is consistent with the upturn in the percentage of nationwide households with savings and those who could set aside money for savings for the current quarter,” he said.

Likewise, Alegre added the percentage of household families investing remittances increased to 5.1 percent in the fourth quarter from 4.2 percent in the third quarter.

The level of OFW households using remittances for investments was more han double the 2.3 percent recorded in the first quarter of 2007 when the CES was launched.

“OFW households that utilize their remittances for savings and investment increased for the current quarter,” he said.

Alegre said the percentage of OFW households that allotted remittances to purchase appliances or consumer durables slipped to 18.7 percent from 19.2 percent in the previous quarter.

Likewise, OFW households have put on hold the purchase of big ticket items as the percentage of households that used remittances to acquire houses declined to 10.4 percent from 11.8 percent and those purchasing cars dropped to 6.4 percent from 9.4 percent.

Latest data from the central bank showed remittances recovered at the start of the ‘ber’ months as Filipinos abroad started sending money to their loved ones in the Philippines ahead of the Christmas holidays.

Personal remittances consisting of cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders picked up four percent to $23.71 billion from January to September this year compared to $23.16 billion in the same period last year.

On the other hand, cash remittances coursed through banks inched up 2.5 percent to $21.29 billion in the first nine months from $20.78 billion in the same period last year.

Beneficiaries of remittances emerge as one of the winners of the continued weakening of the peso against the dollar. The local currency is currently one of the weakest currencies in the region.

Remittances usually fuel personal consumption helping sustain a steady economic growth. The amount of money sent home by overseas Filipinos usually account for 10 percent of gross domestic product (GDP).