by Jun Vallecera / Businessmirror
THEY may still account for a fractional minority, but the number of families of overseas Filipino workers (OFW) that set aside a portion of their monthly allotment as investments is growing, the Bangko Sentral ng Pilipinas (BSP) said.
From only 5.8 percent of OFW families surveyed in January, their number swelled to 7.2 percent in the latest data that measures in general the confidence of Filipino consumers in April.
Deputy BSP Governor Diwa C. Guinigundo noted the growing number following the release of consumer confidence data which showed a slight weakening in the second quarter of the year.
“Those households using remittances for investment purposes increased to 7.2 percent from 5.8 percent,” he told reporters. Total remittances from an estimated 8 million Filipinos abroad reached a total of $17.3 billion in 2010.
Nevertheless, the percentage of households that allocated portions of their remittances to savings went down to 38.0 percent during the survey period from 50.4 percent three months earlier, Guinigundo said.
The great majority of households, or 96.3 percent of total, use the money for food; and 64.2 percent spend the money for the education of their children.
Covered by the latest survey are 5,706 households, a little over half of which (3,104 or 54.4 percent), are from Metro Manila.
Traditionally, the bulk of families receiving foreign-exchange earnings of family members working overseas are neither known much as savers or investors.
However, the number of families that do invest some of the repatriated money in small enterprises or financial tools has steadily grown in small increments, the BSP noted.
Most savings are in the form of bank deposits that earn very little interest over time, as most remittance recipients are not financially sophisticated.
The BSP is confident, however, that the OFW families would in time invest their savings in a wider menu of options as the continuing financial literacy campaign championed by the central bank begins to bear fruit—both in the country and among the migrant workers reached by the seminars in labor-hosting countries.
The campaign has gone to Hong Kong, Dubai and other parts of the Middle East, among many territories where thousands of overseas Filipinos work in various fields of endeavor.
Banks such as the privately-owned Security Bank and HSBC have also conducted financial literacy campaigns of their own to parallel efforts the BSP pioneered in much earlier.
Some sophisticated banks and financial institutions have crafted innovative products aimed at securing part of the monthly flows. For instance, global insurer Axa Life Insurance and Investments is preparing a new product just for OFWs—one that guarantees uninterrupted remittance if something bad-—and hopefully transitory—happens to family members working overseas and cuts off the remittance flow.
Such a product has yet to muster the approval of the Insurance Commission, Axa officials said.