Remittance money spent on wants not needs?
MANILA, Philippines – Overseas Filipino workers (OFWs) send millions of dollars in remittances back to their families in the Philippines, but is the money being spent on wants instead of needs?
“I personally have heard horror stories from Filipinos that are overseas,” Eduardo Cobangbang, Philippines, Japan and Korea cluster manager for business development of Xpress Money Services, said in an interview with INQUIRER.net.
“[The] money that they kept sending back [to their families], thinking it was being used for their intentions, was not even fully utilized for that purpose,” he said.
According to records of the Bangko Sentral ng Pilipinas (BSP), more than $21.4 billion were remitted in 2012.
Remittances have grown steadily since 2010 with $18.7 billion and 2011 with $20.1 billion, BSP record shows.
The more than 10 million OFWs worldwide are also steadily growing in number, with 1.8 million deployed in 2012, 1.6 million in 2011 and 1.4 million in 2010, according to the Philippine Overseas Employment Administration (POEA).
Cobangbang said that the money-sending behavior of OFWs is different compared with that of other nationalities.
“Filipinos would tend to send money every payday. Compare it with Indonesians, they don’t send every payday, they send every two or three months. It’s their culture, it’s inherent in them,” he said.
Financial literacy
Joel Candy, Asia and Pacific Xpress Money regional vice president for business development, agreed with Cobangbang, saying that financial literacy was needed among the OFWs and their families.
“One critical factor is the education, just opening a bank account and keeping the money there improves the level of awareness on their finances [so that] instead of buying a brand new cell phone, which is tempting, they would look at possible investment options,” Candy said.
He noted, however, that the number of Filipinos who don’t have bank accounts was large compared with other nationalities. This leads OFWs to remit money in the form of cash to relatives.
“If I get money and I get it in cash, physical cash, I am bound to spend it because it is disposable, it’s in my hand. Whereas,if I have money in the bank account then probably I won’t be that impulsive to spend it,” Candy said.
Cobangbang said that the benefits of financial literacy do not end with a family spending wisely.
“If they learn financial literacy, it will have an impact on them. And what’s good for the basic unit of the [country which is the] family, becomes good for the whole country,” he said.
Filipinos who have some savings in the bank are better equipped and prepared to face unexpected troubles such as natural calamities, Cobangbang said.
One financial awareness project of Xpress Money is the “Ipon booklet,” which is given to OFWs so they could keep track of how much they have remitted to their relatives in the Philippines.
“What we want to do is raise the level of consciousness of the sender, how much they are sending, saving and keeping for themselves,” Cobangbang said.
“It’s not a solution by itself,” he said, but raising awareness of how much OFWs are sending back home will make them aware of how the money is being spent.
Candy said that the project, which is being piloted in Hong Kong, was conceived because they observed OFWs sending money without keeping track of their remittances.
Read more: http://business.inquirer.net/164909/remittance-money-spent-on-needs-not-wants#ixzz2uViTv3vK
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