OFW families saved, invested more in Q2

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 second quarter, according to the results of a quarterly survey conducted by the Bangko Sentral ng Pilipinas.

Redentor Paolo Alegre, director of the BSP’s Department of Economic Statistics (DES), said the Second Quarter Consumer Expectation Survey showed that the percentage of OFW households using remittances to invest doubled to 7.6 percent in the second quarter from 3.8 percent in the first quarter.

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

Likewise, Alegre said the percentage of household families saving remittances increased to 33.9 percent in the second quarter from 33 percent in the first quarter.

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 12 years ago.

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

Alegre said the percentage of OFW households that allotted remittances to purchase motor vehicles fell to 7.8 percent from 10.2 percent, while those who used remittances for the purchase of appliances or consumer durables also slipped to 18.9 percent from 19.2 percent in the previous quarter.

On the other hand, OFW households that used remittances to acquire houses increased to 11.7 percent from 10.2 percent.

Latest data from the central bank showed remittances in the first four months, both personal and cash, continued to outpace the three percent growth target set by the BSP.

Personal remittances composed 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 rose by 3.7 percent to $10.81 billion from January to April compared to $10.43 billion in the same period last year.

On the other hand, cash remittances coursed through banks went up by 4.1 percent to $9.7 billion from $9.4 billion.

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).

Strong inflows from remittances, earnings of the business process outsourcing (BPO) sector as well as tourism receipts continued to boost the peso.

On the experience of households receiving OFW remittances, Alegre said more of these households found it easy to receive money transferred by OFW in the last 12 months.