An employee counts U.S. dollar bills before changing it to Philippine Pesos inside a money changer in Manila September 19, 2013. The Philippine central bank said remittances from overseas Filipino workers (OFWs) have allowed households to save money, boosting the country’s savings rate.(MNS Photo)
MANILA (Mabuhay) – Remittances from overseas Filipino workers (OFWs) have allowed households to save money, boosting the country’s savings rate, according to the Bangko Sentral ng Pilipinas (BSP).
Based on the BSP’s latest Flow of Funds report, domestic savings has expanded by 6.8 percent to P2.001 trillion in 2012, with households accounting for the bulk of that amount.
“The economy’s savings momentum is sustained amid solid overall revenue performance of all sectors and the country’s sound macroeconomic fundamentals,” the BSP said.
The FOF presents a summary of financial transactions among the different institutions of the economy, and between these institutions and the rest of the world.
It identifies which institutions are net borrowers and net lenders for the year. Institutions are categorized into four, namely financial corporations, non-financial corporations, the general government, and households.
The household sector remained the top saver in the economy for the fifth consecutive year, accumulating P928.9 billion in savings. “This was partly brought about by the steady stream of overseas Filipinos’ remittances,” the BSP said.
The non-financial corporations sector has generated savings of P713.4 billion due to the broad-based growth in savings across sub-sectors.
The general government sector, meanwhile, registered the highest growth in savings at 33.5 percent to P252.2 billion due to savings of the national government, local government units (LGUs), and social security agencies (SSAs).
The financial sector registered 17.5 percent growth in savings to P100.6 billion due to increased revenue generation of top private life insurance companies and the steady stream of income of the other depository corporations.
“Real investment continues to expand as the national government infuses huge investments in infrastructure and other capital outlays,” the BSP said.
Gross capital accumulation expanded by 7.7 percent to P1.691.9 trillion in 2012, with households accounting for 41.6 percent of the total.
The non-financial corporation sector’s capital accumulation grew due mainly to business expansion, modernization and rehabilitation projects.
Real investments of the financial sector fell by 19.5 percent to P31.2 billion on the back of sustained disposal of foreclosed properties by the banking sector.
The slowdown in the sector’s capital accumulation was likewise reflected in the sharp drop in real investments of the monetary authority as purchases of non-monetary gold in the BSP’s gold buying stations plunged by 91.6 percent year-on-year.
Capital accumulation by the general government sector rose 27.4 percent to P318.4 billion in 2012 as the national government accelerated disbursements for infrastructure projects and capital outlays.
Except for the general government, all other sectors were net lenders.
The household sector continued to be a net lender, with loans receivables as the desired form of asset acquisition.
The non-financial corporation sector maintained its net lending position, with fund provisioning activities largely reflected in the build-up of trade receivables, currency holdings and deposit placements.
The financial sector’s net lending surged by 48.2 percent to P69.4 billion as the assets of rural and cooperative banks, other deposit-taking institutions, and the insurance sub-sector increased.
The general government sector retained its net borrowing position at P59.9 billion on the strength of the national government’s faster capital accumulation. (MNS)