OFW families warming up to saving, investing
Families of migrant workers are becoming better at managing their finances as they save or invest more of the money they get from overseas, a new survey showed.
This changing behavior—observed over the last seven years—bodes well for the welfare of overseas Filipino workers’ (OFW) families, and speaks of banks’ eagerness to serve the specialized market.
“It should be favorable in terms of their financial objectives. This trend is suggesting that they are becoming more financial educated,” said Bangko Sentral ng Pilipinas Assistant Governor Cyd Tuaño Amador.
A recent survey showed the proportion of OFWs that were saving money in banks instead of just spending it all on basic goods grew to 42.1 percent in the fourth quarter of 2014 from 39.7 percent in July to September.
The figure for the fourth quarter was significantly higher than the 7 percent of OFW families that saved money in banks in 2007.
Cash transfers from the country’s 10 million or so Filipinos overseas form a major part of the Philippine economy. At about $23 billion at the end of 2013, remittances were the economy’s largest source of foreign currencies that local firms and the government need to do business with the rest of the world.
Remittances also support domestic consumption, which accounts for about two-thirds of gross domestic product.
This year, remittances are expected to grow by 5.5 percent to a new record.
Apart from saving, there was also an increase in the number of OFWs who invest their cash in financial instruments.
In the fourth quarter, 6.8 percent of OFW families invested their cash, up from 6.3 percent in the previous quarter and 2.3 percent in 2007 when the survey was first conducted.
The survey, which is part of the BSP’s quarterly assessment on consumer expectations, asked families of OFWs to list down where their remittances were usually spent.
As expected, nearly all or 96.1 percent said they used the money they got from abroad on basic goods such as food.
Nearly three-fourths (72.2 percent) of the OFW households allocated part of their remittances for education, 56.3 percent for medical expenses and 42.1 percent for debt payments.
Monitoring of OFW families’ spending pattern is done to give policymakers an idea on how remittances are being used.
Amador said banks had been using this information in offering financial services designed for migrant workers and the families they leave behind.
Data on remittance inflows for October will be released today.
In September, cash remittances rose by 8 percent to a near-record high of $2.11 billion, the highest single-month remittance since December of last year.
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