More OFW families buy houses, cars — survey

More Filipinos decided to use the money sent home by their loved ones from abroad to buy real estate properties as well as vehicles instead of saving or investing, according to results of a quarterly survey conducted by the Bangko Sentral ng Pilipinas.

Redentor Paolo Alegre, head of the BSP’s Department of Economic Statistics (DES), said the third quarter Consumer Expectation Survey showed the percentage of OFW households using remittances for the purchase of a house increased to 11.8 percent in the third quarter from 8.7 percent in the second quarter.

Alegre said the level of OFW households using remittances to purchase cars also rose to 9.4 percent from seven percent.

Likewise, the percentage of OFW households using remittances to pay debt increased to 24.6 percent from 22.9 percent.

The move to buy houses, cars, and pay their financial obligations was primarily to lock in lower interest rates as the BSP has so far raised the benchmark interest rates by 100 basis points this year to curb rising inflationary pressures from high oil and food prices, weak peso, and the impact of the tax reform law.

OFW households benefit from the strong dollar as they are able to get more pesos from remittances. The local currency almost touched 54 to $1 last Friday, hitting an intraday low of 53.975 to $1.

The peso has depreciated close to eight percent year-to-date to 53.73 last Friday from 49.81 to $1 at the start of the year due to normalization of interest rates in the US, trade war between the US and China, emerging market contagion, as well as strong imports and concerns of runaway inflation in the domestic front.

As a result, Alegre said the percentage of OFW households who allocated part of their remittances for education, purchase of appliances, and other miscellaneous expenses declined in the third quarter.

Furthermore, he added the percentage of OFW households who saved their remittances declined to 32.7 percent from 33.9 percent, while those who invested also decreased to 4.2 percent from 5.2 percent.

The survey was conducted from July 1 to 14 and covered 5,408 households including 449 that receive remittances from overseas Filipino workers.

Latest data showed personal remittances climbed by 2.8 percent to $15.79 billion in the first half from $15.36 billion in the same period last year, while cash remittances coursed through banks inched up by 2.7 percent to $14.18 billion from $13.81 billion.