OFW remittances spent mostly on food in 3rd qtr

Families who received remittances from their relatives abroad spent more on food and other household needs and less on acquisition of cars and houses in the third quarter of the year compared to their spending habits in the previous quarter. The third quarter Consumer Expectations Survey of the Bangko Sentral ng Pilipinas showed that 94.1 percent of the 5, 093 households polled (2, 558 in Metro Manila and 2, 535 outside the NCR) spent the monies they received primarily on food and other household needs, from 91.8 percent in the second quarter. However, the survey indicated an increasing trend in the number of households setting aside part of the remittances for savings from only 15.7 percent in the second quarter to 19.8 percent in the third quarter. In the first quarter, only 7.2 percent of households said they placed an amount for savings. More than 50 percent of these households (53.9 percent) spent their remittances on education, about one in every three spent it to pay debts, and one in every four spent on medical expenses. Despite a slight improvement in outlook for the third quarter, consumer expectations remained negative nationwide as economic improvements remained largely unfelt by broad sectors below high-income groups. The latest BSP consumer expenditure survey indicated that overall consumer confidence index was still in the red zone at negative 23.6 percent albeit better than the negative 26 percent in the second quarter. Bangko Sentral Governor Amando M. Tetangco Jr. explained that the decline in the negative index indicated that the "number of optimists increased relative to the previous quarter" although pessimism outlook still overwhelmed. The third quarter CES was conducted during the period 2-27 July 2007 with a sample size of 5,093 households, broken down into 2,558 households (50.2 percent) in NCR and 2,535 households (49.8 percent) in AONCR. The BSP said the households interviewed were drawn from the National Statistics Office's (NSO) Master Sample List of Households, which is considered a representative sample of households nationwide. Tetangco said that based on the survey results, more households anticipate better economic and family financial conditions in the fourth quarter as the index turned positive at 4.1 percent. Moreover, Tetangco said most consumers saw better prospects one year down the road, with the confidence index increasing to 7.9 percent from 5.8 percent in the previous quarter survey. The CES results indicated however that consumer outlook on economic conditions, family income and finances remained bleak and firmly in the negative territory, despite a slight improvement in the latest survey. Whether this long-term optimism would translate to an increase in buying intentions, however, was another matter altogether. The BSP revealed that in the survey, consumers nationwide anticipated that their expenditures on basic goods and services in the fourth quarter would rise in preparation for the holiday season. The expenditures index, according to the CES results, went up to 35.1 percent compared to 33.4 percent in the second quarter. The expenditure items with higher confidence indices were those on food, clothing and footwear, electricity, and hotel and restaurants. On the other hand, the CES results indicated that "majority" of respondents indicated that the prospects for buying consumer durables, motor vehicles, and residential properties were appreciably better in the third quarter of 2007. The survey reported that buying condition indices exceeded the 50 percent mark at 53.6 percent nationwide, 56.4 percent for the NCR, and 53.2 percent for AONCR. In the next twelve months, the BSP said the buying intentions of consumers appeared upbeat as the index inched up from 19.6 percent in the last quarter's survey to 21.4 percent. - GMANews.TV