OFW beneficiaries seen turning into entrepreneurs
More households dependent on remittances from overseas Filipino workers are expected to go into business as the strong peso has cut the value of the dollars they receive from abroad.
Esquire Financing Inc., which caters to the credit needs of small and medium scale enterprises, said that with the strong local currency pulling down the peso value of remittances, recipient families may be pushed to engage in businesses to boost their income.
“More people are going into business, and they are going to [financing] groups like Esquire. What’s driving this is the positive outlook on the economy and the strengthening of the peso,” Rajana Uttamchandani, president and chief executive officer of Esquire, said in a briefing Tuesday.
Uttamchandani said that with the favorable outlook on Philippine economic growth, the peso is seen to remain strong in the years ahead.
Should the local currency indeed appreciate over the short to medium term, Uttamchandani said the income of remittance-dependent households would shrink if family members do not engage in other income-generating activities.
Esquire’s total loan portfolio currently stands at P5 billion, he said.
Uttamchandani added that the company expects to get more loan applications from SMEs over the near term as a result of the steady increase in the number of remittance-dependent households getting into business.
The Bangko Sentral ng Pilipinas earlier reported a gradual rise in the number of remittance-dependent households that are investing the money received from family members abroad.
In a survey conducted by the BSP in the first quarter of the year, 8.5 percent of remittance-dependent households in the country reported to have invested some of the money sent home by family members working abroad. This was up from 6.4 percent recorded in the same period last year.
The BSP has projected that remittances will grow by at least 5 percent this year from last year’s $20.1 billion.
In peso terms, however, economists expect remittances in local terms to post minimal growth because of the appreciation of the peso against the greenback.
The peso rose by 4.23 percent from January 1 to August 31, when it closed at 42.06:$1.
About 10 percent of Filipino households are said to be partly or fully dependent on remittances sent by overseas-based families.
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