Fewer OFW households save, invest in 1st quarter

Fewer Filipino households allocated portions of remittances they received from their loved ones abroad to save and invest during the first quarter of the year as they prioritize their spending amid the sharp rise in consumer prices, results of a quarterly survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Teresita Deveza, deputy director of the BSP’s Department of Economic Statistics (DES), said results of the Consumer Expectations Survey (CES) for the first quarter showed a decline in the percentage of households allocating a portion of their remittances for savings to 36.9 percent in the first quarter from 46.8 percent in the fourth quarter of last year.

“The decline in the percentage of households that allotted remittances for savings could be due to the higher prices of goods and expected increase in expenditures on their basic goods and services,” Deveza said.

Despite the decline, the percentage of OFW households using remittances to

save as of the first quarter of the year was more than five times the 7.2 percent recorded in the first quarter of 2007 when the CES was launched.

On the other hand, she added the number of households that allocated remittances for investments slipped to 6.2 percent in the first quarter from 10 percent in the fourth quarter.

The percentage of OFW households investing remittances is almost three times the 2.3 percent level when the survey was first conducted.

Of the 485 households included in the survey that received OFW remittances for the first quarter, more than 98 percent used the remittances that they received to purchase food and other household needs.

The proportion of households which used part of their remittances for education reached 68.2 percent and for debt payments, at 31.3 percent.

About 22.5 percent of the respondents said they use the money that they received to purchase consumer durables followed by 12.4 percent to buy houses and 6.4 percent to acquire motor vehicles.

Deveza said the spending outlook index of households on basic goods and services remained steady at 28.7 percent for the second quarter.

More respondents expected an increase in expenditures on house rent, furnishings, water, electricity, fuel and transportation while fewer expected to spend more for clothing and footwear, medical care, communication, education, recreation and culture as well as personal care and effects.

She added respondents are expecting inflation to increase to 3.1 percent for the first quarter from the 2.7 percent inflation rate expectation in the fourth quarter. Inflation kicked up to a 27-month high of 3.3 percent in February from 2.7 percent in January due to higher food and oil prices.

According to her, fewer respondents expect an increase in interest rates.

Likewise, respondents are of the view that the peso would continue to depreciate against the dollar this year. The peso is the worst performing currency this year after weakening by 1.7 percent against the greenback.

The stronger dollar means higher peso conversion for recipients of remittances from overseas Filipinos.