Families of OFWs saving and investing less

MANILA, Philippines — More families of overseas Filipino workers (OFWs) are saving and investing less in the fourth quarter despite the projected rebound in remittances, as host countries gradually recover from  the impact of the   pandemic.

Redentor Paolo Alegre, senior director of the Department of Economic Statistics at the Bangko Sentral ng Pilipinas (BSP), said that based on the  result of the   fourth quarter 2021 Consumer Expectation Survey (CES), the percentage of households using remittances to save declined slightly  to 31.7 percent from the previous quarter’s 31.8 percent.

Likewise, Alegre said OFW families using remittances for investments dropped to 9.2 percent from 11 percent.

According to the BSP, spending priorities of OFW households  are: food and other household (down to 96 percent from 96.5 percent), education (down to 50.5 percent from 56.9 percent), and medical expenses (down to 45.8 percent from 48.7 percent).

“The number of OFW households that utilizes their remittances to purchase food and other household needs decreased in the fourth quarter of 2021,” Alegre said.

He said the remittance proceeds used for the purchase of appliances or consumer durables also declined to 12.9 percent from 15.1 percent, as well as the percentage of OFW households intending to buy a house or a car declined in the fourth quarter.

Meanwhile, the BSP said households that received remittances in the last 12 months continued to be satisfied with the services of remittance agencies, with a confidence index at 91.2 percent, higher than the 82.2 percent recorded in third quarter survey.

The CES covered 5,495 respondents, including 325 OFW households. It was conducted from Oct. 1 to 13 when the National Capital Region (NCR) and adjacent provinces were placed under enhanced community quarantine anew due to the emergence of the more contagious Delta variant.

The BSP is now expecting remittances to grow by six percent this year and four percent next year after slumping by 0.8 percent last year, as hundreds of OFWs were displaced in host countries due to the impact of the global health crisis.

Latest data from the central bank showed personal remittances increased by 5.4 percent to $28.82 billion from January to October   compared to last year’s $27.35 billion.

Personal remittances include all current transfers in cash or in kind by OFWs as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines.

Likewise, cash remittances coursed through banks went up by 5.6 percent to $23.12 billion from a year-ago level of $21.89 billion.

Both personal and cash remittances have been recording growths after contracting by 1.7 percent in January.