Fewer OFW families save, invest in Q1

Fewer Filipino households are investing the money sent home by their loved ones from abroad amid the volatility in the global financial markets, results of a quarterly survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Rosabel Guerrero, director of the BSP’s Department of Economic Statistics (DES), said the percentage of OFW households using remittances to invest as of the first quarter of the year slipped to 4.2 percent from 5.9 percent in the fourth quarter last year. The level of OFW households using remittances for investments was almost double the 2.3 percent recorded in the first quarter of 2007 when the Consumer Expectation Survey (CES) was launched.

The results of the CES survey for the first quarter showed the percentage of OFW households saving remittances also declined to 38.3

percent in the first quarter from 42.3 percent in the fourth quarter of 2017.

However, 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 when the CES was launched 11 years ago.

“OFW households that utilize their remittances for savings and investment declined for Q1 2018,” Guerrero said.

The global financial market has been on a tailspin, sending the Philippine Stock Exchange index (PSEi) crashing below the 8,000 level late last month due to the brewing trade war between the US and China as well as the normalization path being taken by the US Federal Reserve.

Latest data showed personal remittances booked a doubledigit growth of 10.8 percent to $2.65 billion in January from $2.39 billion in the same month last year while cash remittances coursed through banks rose 9.7 percent to $2.38 billion from $2.17 billion.

Personal remittances went up 5.3 percent to a record $31.29 billion last year from $29.71 billion in 2016 while cash remittances grew 4.3 percent to an all-time high of $28.06 billion from $26.9 billion.

Remittances continue to boost personal consumption helping sustain a steady growth. Personal remittances accounted for 10 percent of gross domestic product (GDP) and 8.3 percent of gross national income (GNI) last year.

Guerrero said the percentage of Filipino families using remittances for education increased to 69.5 percent in the first quarter from 62.6 percent in the fourth quarter, while those using it for medical expenses inched up to 54.6 percent from 54.1 percent.

The BSP director said the percentage of households using remittances for the purchase of appliances or consumer durables rose to 24.1 percent from 23.4 percent and for the purchase of a house increased to 15.9 percent from 14.2 percent, as well as acquisition of motor vehicles to 8.6 percent from 8.5 percent.

Majority at 96.4 percent allocate remittances for food and other household needs in the first quarter, slightly lower than the 97.2 percent in the previous quarter.