Spend wisely, remittance firm tells OFW families
MANILA, Philippines — Beneficiaries of remittances from overseas Filipino workers (OFWs) should spend wisely as the appreciation of the dollar against other currencies including the peso has been offset by the faster increase in consumer prices, according to London-based remittance company WorldRemit.
Earl Melivo, interim managing director for Asia-Pacific at WorldRemit, said Filipinos should be disciplined in expenses to make finances sustainably viable as consumer prices continue to rise.
While OFWs are able to maximize the value of the remittances sent home with favorable foreign exchange rates, for their recipients, managing those funds by being smart with their budget is crucial.
With increasing cost of importation, Melivo said local consumers could strengthen the demand for local products.
“The Philippines has many positive stories of locally made, high quality products. If consumers make the conscious decision to support local instead of buying items from overseas, there is a higher chance for prices to decrease and become more competitive,” he said.
According to Melivo, Filipino families should also plan ahead by preparing extra funds for expenses and saving whenever possible.
“Staying ready for price hikes will help families maintain their lifestyles despite the uncertainty of the economy. On top of that, allotting a portion of one’s monthly earnings for emergency funds will be helpful should more dire, unexpected situations arise,” Melivo said.
The peso has bounced back to the 57 to $1 level after hitting a new all-time low of 59 to $1 several times this month due to the more aggressive rate hikes by the US Federal Reserve to tame inflation and the rising demand for the greenback as the Philippine economy continues to reopen.
To stabilize the peso and anchor inflation expectations, the Bangko Sentral ng Pilipinas (BSP) has so far raised key policy rates by 225 basis points, bringing the benchmark interest rate to 4.25 percent from an all-time low of two percent.
The BSP is likely to deliver another huge 75-basis point hike on Nov. 17 as BSP Governor Felipe Medalla stressed the need for the Philippines to match point by point the rate hikes to be delivered by the US Fed.
A weaker peso increases inflation, and disrupts the currency’s purchasing power relative to the dollar.
While the weaker peso has provided some benefit to Filipinos overseas, for OFWs working in countries with a high-value currency, they have the ability to get more value out of the remittances sent home – especially with Christmas around the corner.
- Latest
- Trending