More households investing part of remittances

MANILA, Philippines—The number of Filipino households that invested a portion of the remittances they got from overseas-based family members rose in the fourth quarter, according to the Bangko Sentral ng Pilipinas.

A BSP survey showed that 6.4 percent of remittance-dependent households put their money in various forms of investments, slightly higher than the 5.8 percent in the same period last year.

The survey, conducted in October, covered 563 Filipino households dependent on remittances from family members working abroad.

The BSP conducts this survey to monitor how Filipino households dependent on remittances use the money.

The BSP noted that despite the increase in the fourth quarter, the percentage of households that invest a portion of the remittances they receive was still small.

Officials said more households should to learn to invest part of the remittances so that they can earn more over the long term.

Besides helping augment income, investments will also help generate jobs.

Officials said micro enterprises are a good source of employment and have played vital role in growth of the overall economy.

The BSP is thus continuing with its advocacy to encourage more households—especially those that regularly receive remittances—to invest their money, either by putting it in mutual funds and other investment instruments or setting up small businesses.

Monetary officials said that it is important for households to learn about investments given uncertainties in global economic conditions.

In case economic crises hit offshore labor markets and lead to job displacements, households that have investments will be better off, they added.

The central bank has been conducting seminars for Filipino households, especially those dependent on remittances, on the basics of investments. It also holds such seminars abroad, particularly in cities where there are many Filipino workers.

Meantime, the same survey also showed that the proportion of remittance-dependent households that put part of their money in savings shrank to 42.6 percent in the fourth quarter of this year from 43.7 percent in the same period last year.

The BSP attributed the drop to the increase in purchases of basic goods and big-ticket items.

Spending by Filipino households has been one of the key growth drivers of the economy.

In the first three quarters of this year, the economy grew by 3.6 percent from a year ago, aided largely by consumer spending.

The latest growth rate was a sharp deceleration from over 7 percent last year, but economists said it could have been slower if not for consumer spending.