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Saving hard-earned OFW income for investments


A family that prudently saves the earnings of its overseas family worker will have an easier time managing its resources, even if the amount isn't so grand.

A family that has found a new-source of income may still find it hard to budget or apportion its money for its growing needs.

For instance, Vilma Baligad, whose husband has been working as a security guard in Africa for more than a year with an income six times higher than his salary in the Philippines, still gropes on how to budget her family expenses.

Since Baligad solely depends on her husband's remittances, she has has noticed that the money went recklessly to buying household furniture, appliances, electronic gadgets and celebrations.

“We have more expenses now than before my hubby left for abroad," Vilma said.

She also has forgotten to save consistently sufficient money in the bank for the future.

Just like Vilma, OFW families should exercise discipline in utilizing money. They should prioritize their “needs” first before their “wants.” They have to make long-term goals and take their future into account

Working overseas creates a culture of dependency among beneficiaries of OFWs. They tend to rely on overseas Filipinos and not exert effort for long-term goals for their family.

Likewise, working abroad is also considered to be short term in nature. OFWs may lose jobs anytime due to unexpected closure of the company, serious medical problems or retirement.

Filipino overseas workers are seen to earn billions of dollars but confront challenges in saving them. In fact, this situation was featured on a special report of Cable News Network’s(CNN) “Eye on the Philippines.”

Recognizing this situation, the government has thought of ways to help its OFWs manage their pooled money into productive ways.

The Remittance Development Council (RedC) was established to encourage OFW families to save and invest.

Saving into a regular account disburses teensy-weensy interest rate and it is not enough to keep pace on the continuous increase in prices of goods and services.

On the other hand, investing money makes it grow bigger and faster which will allow OFWs to reach financial goals earlier.

“We are more determined in working so that their (overseas Filipino workers or OFWs') hard earned and pooled remittances will be used effectively and productively through cooperatives, microfinance, migrants' savings and investments programs and social enterprises. These remittances will be our tool in transforming several underdeveloped areas in the country into vibrant communities,” said Secretary Imelda M. Nicolas, Chairperson of Commission on Filipino Overseas.

OFWs have the choice of starting into micro or small enterprises like the successful turn out of the Pampanga-based Mekeni Food Corporation.

Prudencio Garcia, chief executive officer (CEO) of MFC, was once a migrant worker in Saudi Arabia and his investments continues to pay off to a world-class meat processing company that retains more than 1,000 employees.

In 2011, only 5.7 percent of OFW families used their funds for investments.

The government urges more OFWs to save and invest in order to generate more jobs that will contribute to the local economic development and community infrastructure such as schools, health centers, roads and other community projects.

It can also be a way to lift households’ standard of living thus targeting the advocacy in fighting poverty in the Philippines.

The government also conducts financial literacy trainings worldwide to reach OFWs and their respective families to impart better money management.

Overseas Filipinos count 9.5 to 12.5 million worldwide or 11 percent of the total population of the Philippines.

As the fourth biggest recipient of remittances in 2010, the Philippines obtained US$ 20.1 billion that constructed nine percent of the country’s domestic output as measured by the gross domestic product(GDP).

As an American proverb states, “Money talks, but all it ever says is goodbye.” OFWs should not let the opportunity of earning dollars fly from its nest.

Come save and invest!

By Geneve Baligad

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