appear to have saved less cash in the third quarter, according to the Bangko Sentral ng Pilipinas.
In its latest survey, the BSP reported that 35.5 percent of households dependent on remittances from overseas Filipino workers (OFWs) had less savings in the three months to September, compared with the 43 percent of respondents reported in the same quarter last year.
“The appreciation of the peso decreased the value of remittances in peso terms, hence, a smaller amount could have been apportioned by households for savings and purchase of big-ticket items,” the BSP said in a report.
The latest figure was also lower than the 44 percent recorded in the second quarter of the year.
There were 651 households covered in the BSP survey, which was conducted in July.
According to the central bank, OFW households are encouraged to set aside a certain sum for savings and investments to secure their future.
The BSP has been conducting seminars on savings and investments for migrant workers and their families. But it admitted that it still has a long way to go before most OFW households get to practice saving up and investing.
The peso’s appreciation was fueled by the surge in foreign capital inflows, particularly short-term investments in stocks, bonds and other securities.
The BSP said the sharp rise in foreign “hot money” inflows was due to the poor economic performance of the United States and Europe which, in turn, forced international portfolio fund owners to seek opportunities elsewhere, particularly in emerging markets like the Philippines.
Also, the rise of the peso has badly affected the fortunes of Filipino exporters, whose goods are now more expensive in dollar terms, and thus less competitive in foreign markets.
Traders have since urged the BSP to intervene in the foreign exchange market, particularly by making the peso much weaker against the US dollar.
But according to central bank officials, the regulator maintains a policy of allowing a market-determined exchange rate. They noted that a weak peso would not benefit all sectors, and that the regulator must stick to a bias-free policy.
However, the BSP does intervene in the foreign exchange market from time to time, but only to temper the sharp rise or fall of the peso.
Remittances from workers continued to grow this year, particularly in dollar terms, despite the problems abroad.
The rise in remittances is attributed to continued strong demand for Filipino workers in overseas labor markets.
But economists said that while remittances have grown significantly in dollar terms, the peso value of the remittances have been registering almost flat growth because of the appreciation of the local currency against the US dollar.
Latest data from the BSP showed that remittances in the first seven months of the year reached $11.35 billion, rising by 6.3 percent from the $10.68 billion reported in the same period last year.