Fewer remittance-receiving families want to save money, a new Bangko Sentral ng Pilipinas (BSP) survey showed, presenting a setback to the regulator’s efforts toward financial inclusion.
The number of savers among households that rely on cash from migrant workers suffered the sharpest drop since 2010 as those favoring major purchases remained steady, a BSP survey on family income showed.
Basic needs such as food and other household expenses remained the most pressing concern for families of overseas Filipino workers (OFW).
Nearly all OFW-supported households or 96.6 percent said money from abroad would be used for basic needs—indicating that cash transfers were still the main source of income for many Filipino homes.
The BSP conducts quarterly surveys on the intended uses of money from OFWs. One closely-tracked use of remittances is setting part of the money aside, which indicates growing financial maturity among households.
More money being saved by families, especially if the cash is put in banks, means the robust remittances that enter the country can be used for more than just fueling domestic consumption, but also for financing productive sectors of the economy.
Of the 563 households covered by the BSP’s third quarter survey, 38.2 percent said some part of money from OFWs would be set aside for saving.
This proportion was down from 49.7 percent in the previous survey.
The 11.5 percentage-point drop was the biggest since the second quarter of 2010, when the amount of savers declined from 50.4 percent to 38 percent.
In 2007, when the survey on OFW families began, only 7.2 percent of respondents said a portion of the money they received from overseas would be set aside for rainy days.
Other popular uses of remittances include education (71 percent), medical expenses (63.1 percent) and the purchase of houses (11.5 percent). All indicators were ready in the third quarter.
More OFW households said they planned to use remittances for debt payments at 45.3 percent (from 43.1 percent last quarter).
Remittances to the Philippines are expected to rise by 5 percent to a record high of $25 billion in 2015. Last year, remittances accounted for about a tenth of the gross domestic product (GDP).