What are Filipinos spending remittances on? Mostly food this year
As you probably already know, the Philippines is a country that receives a high amount of remittance flows throughout the year. Filipinos who work in the U.S. will send money to the Philippines to their families back home so that they can use it in a variety of ways. And a recent report is detailing the ways in which remittances have been spent in the first few months of 2012.
The Bangko Sentral ng Pilipinas determined this after surveying approximately 600 households who received Overseas Filipino Workers remittances between January and March of this year. The overwhelming majority of Filipinos – 95.6 percent – said they used remittances on food purchases.
But they were also used in other ways. For example, more than two-thirds said they allocated some of their remittance funds for educational costs and 60 percent said they put a portion of it toward medical payments. Just under 50 percent used it for other non-medical debts
Debt obligations Filipinos carry can sometimes temper economic sentiment, but remittances were among the things that actually led to consumer sentiment in the Philippines improving.
In the same report released by the BSP, consumer sentiment in the country rose to -14.7 percent from -20.6 percent when compared to the last three months of 2011. BSP says this is a strong indication economic growth will continue through the first half of the year.
Improved sentiment was largely due to Filipinos receiving wire transfers from their relatives living overseas, but there were other reasons for why they were optimistic. This included more jobs being available, an increase in the number of employed family members, average salaries going up, and a reduced amount of civil instability combined with greater peace and order throughout much of the country. In addition, the Filipinos surveyed also cited good governance and an appreciation in the value of the peso for why they were more upbeat about the country's financial state.
However, Filipinos aren't without their concerns, as the survey found some aspects of life in the country are tempering expectations. For example, the rising cost of oil is proving to be a burden for some families, and forecasts indicate prices won't be dropping any time soon. BNP noted that oil prices are Filipino consumers' top concern for the year ahead.
Nevertheless, the cost of energy didn't prevent many Filipinos from buying big-ticket items in the three-month period.
"Respondents were of the view that the current quarter is a favorable time to buy real estate for investment, motor vehicles for income generation and family use, as well as consumer durables," the report noted. "Relative to a year ago, buying conditions on big-ticket items improved at the national level."
If you have a family in the Philippines, consider visiting Xoom for all your money transfer needs, as their funds will be sent quickly and securely.
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