BSP chief urges OFW families to save, invest regularly

BSP chief urges OFW families to save, invest regularly

By Lawrence Agcaoili (The Philippine Star)

Updated May 09, 2011 12:00 AM


MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is encouraging beneficiaries of remittances from their loved ones working overseas to save and invest regularly to improve the financial condition of the economy.

BSP Governor Amando M. Tetangco Jr. said in his speech during a policy forum on ovearseas Filipinos that there is a need to harness remittances from migrant and overseas Filipinos for economic and social development.

“While consumption generates economic growth, it is the allocation of remittances to savings and investments that will improve the financial condition of households and that of the entire economy in the long term,” Tetangco stressed.

He noted that results of the BSP’s Consumer Expectations Survey for the first quarter of the year indicated that the percentage of households of overseas Filipino workers that set aside money for savings has increased to 41.4 percent compared to only 7.2 percent in the first quarter of 2007 when the first survey was conducted.

However, he said that the percentage of households that used part of their remittance for investments reached only 5.7 percent in the first quarter of the year from 2.3 percent four years earlier.

“We do have a long way to go in terms of fostering investments among OFW households,” he added.

According to Tetangco, there is a need to establish a roadmap that would encourage OFW households to expand from pure consumption to include savings and investing regularly.

The BSP chief pointed out that the central bank has been working on a number of activities to mobilize remittances to fund productive activities and maximize the development potential of remittances.


For one, he said the BSP has encouraged and authorized commercial banks to offer specialized investment products and services to OFWs such as the mutlicurrency retail treasury bonds allowing OFWs to invest in bond instruments for as low as $100 or 100 euros.

In 2008, he explained that the Land Bank of the Philippines and the Development Bank of the Philippines were authorized to promote hedging instruments and long-term negotiable certificate of deposits.

Furthermore, the BSP has conducted 48 financial lectures across the country for about 6,000 dependents of OFWs for the past five years.

It has also conducted 14 financial lectures abroad for nearly 2,000 OFWs in Hong Kong, Singapore, South Korea, Japan, Saudi Arabia, Bahrain, Qatar, Italy, and the United Kingdom.

“Our objective is to empower our migrant workers in partnership with their families to save, invest, and grow their money for the long term,” Tetangco said.

The money sent home by Filipinos abroad are used by households for education, healthcare, purchase of real properties, house improvements, savings, investments, and even for small business.

OFW remittances went up by 8.2 percent to a new record level of $18.8 billion last year and contributed about 10 percent of the country’s domestic output as measured by the gross domestic product (GDP).

The BSP has lowered the growth target for overseas Filipino workers’ (OFW) remittances to seven percent or $20.1 billion instead of eight percent or $20.1 billion this year from 8.2 percent to a record $18.76 billion last year due to the political tensions in Middle East and North African (MENA) states as well as the disaster in Japan.

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