Path to country’s prosperity may come through remittances
Traditionally, when people send money overseas, it's used in a way that most directly impacts families, such as by paying rent bills, grocery items or gasoline. According to a Filipino finance official, remittances may be exactly what countries need to fund improved job growth.
Speaking at the Philippine Services Sector Conference at the Sofitel Philippine Plaza Manila, Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo indicated that remittances could help stimulate the country's services sector, which is a key component of the Filipino economy.
“The BSP will continue to ensure that [overseas Filipino workers] gain better access to financial products and services by conducting various learning campaigns for a wider number of beneficiaries such as their families," said Guinigundo, according to BusinessWorld Online.
He added that investing may seem like something that's complicated and too detail-oriented to delve into, but BSP will help Filipinos who work in another country provide for their families so that they can understand what financial instruments are out there and whether they should invest. They may even want to invest in a small business.
Sittie Hannisah Butocan, economic research deputy director, noted at the conference that devoting remittances to investment makes sense, as it can yield higher returns, rather than none at all when it's put toward consumables.
Investments are more sustainable than non-tradable goods, and they will also have a multiplier effect on the services sector," Butocan told the news source.
Survey: Four in 10 Filipinos putting remittance earnings toward savings
It appears as though Filipinos may already be thinking about making more investments with remittance money. BusinessWorld Online notes that based on the most recent consumer expectations survey that was conducted by BSP, nearly 40 percent of respondents devoted at least a portion of remittance funds toward savings in the second quarter. That's up from just under 34 percent.
Guinigundo indicated that nothing is new about Filipinos putting remittances toward savings and investments. However, the potential of boosting the country's economy may be limitless if more consumers invest and make smart decisions in the process.
"[Overseas Filipino Worker] remittances are a major source of foreign exchange, they have helped spur private investments and consumption," he said during the conference, according to BusinessWorld Online. "But their full economic impact depends on Filipino households’ propensity to invest, and invest better."