Beneficiaries of money transfers from aboard should save and invest part of their money for a more productive use of remittances, the Bangko Sentral ng Pilipinas said Monday.
â€œWe would like to harness the potential the use of remittances for savings and investments,â€ BSP Gov. Amando Tetangco Jr. at the signing of a memorandum of understanding between the Bangko Sentral and the Commission on Filipinos overseas on the Remittance Development Council
The Philippines is the fourth largest beneficiary of remittances, Tetangco said, citing World Bank records.
Money transfers to the Philippines went up 7.2 percent to a record $20.117 billion last year.
This year, remittances from overseas Filipinos will grow by 5 percent, Tetangco noted, saying money transfers grew 5.4 percent to 1.557 billion last January from $1.476 billion a year earlier.
Hard earned and pooled investments should be used effectively and productively through cooperatives, microfinance, migrantsâ€™ savings, investments programs, and social enterprises, said Imelda Nicolas, chairperson of the Commission of Filipino Overseas
â€œThese remittances will be our tool in transforming several underdeveloped areas in the country into vibrant communities,â€ Nicolas added.
While more beneficiaries of remittancesâ€”42.6 percent in the fourth quarter of 2011 from 35.5 percent in the third quarterâ€”saved part of the money they received from abroad, the beneficiary households that invested part of their money dropped to 6.4 percent from 9.1 percent in the same comparable period, according to the BSP Fourth Quarter 2011 Consumer Expectations Survey.
The sameÂ surveyÂ showed more beneficiaries bought consumer durable goods (27.4 percent from 26.9 percent) bought consumer durable goods.
More beneficiaries also bought houses (27.4 percent from 26.9 percent) and cars (8.3 percent from 5.7 percent).
By investing more of their money, the beneficiaries of remittances can help improve the Philippine economy. Thatâ€™s why the Bangko Sentral is encouraging them to invest regularly, according to the central bank chief.
â€œWhile remittances boost economic activity through higher private consumption, the potential of remittances for other productive uses such as savings and investments has yet to be maximized,â€ Tetangco noted.
Remittances accounted for 9 percent of the countryâ€™s gross domestic product last year,Â governmentÂ data showed.
The Remittance for Development Council is an advisory and policy-recommending body that would organize and optimize individual and collective remittances for national and local development by ensuring the smoother inflow of money transfers through secure channels so the money could be used for lending and other productive activities.Â â€”VS, GMA News
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