Filipino households with savings continued to improve in the country as the impact of the pandemic gradually dissipates amid the slow recovery of the global and local economy.

The Bangko Sentral ng Pilipinas (BSP) said that based on its survey, the percentage of households with savings rose to 32.8 percent in the third quarter this year from 30.2 percent in the second quarter.

“The increase in the percentage of savers was mainly due to the higher percentage of households with savings in the low- and high-income groups, which outweighed the lower percentage of savers in the middle-income group,” said the BSP, citing the latest results of the Consumer Expectations Survey (CES) released before the weekend.

The CES, however, noted that households with savings accounts in banks have declined in the third quarter this year while families that are dependent on an Overseas Filipino member – formerly called Filipino Overseas Worker (OFW) -- still typically use remittances to pay for food, rent and education, and just a little set aside as savings.

The survey is comprised of 38.4 percent middle-income group or those households with monthly earnings of P10,000 to P29,999; 35.9 percent high-income group earning P30,000 and over; and 25.6 percent low-income group with less than P10,000.

The percentage of households that BSP surveyed who said they could set aside money for savings increased to 33.9 percent in the third quarter versus 31.6 percent in the previous survey.

Among households that could save, 32.7 percent said they would save at least 10 percent of their monthly gross family income for savings, higher than the 31.7 percent a quarter ago. Consequently, 67.3 percent said they would set aside less than 10 percent for their savings, down from 68.3 percent in the second quarter, said the BSP.

According to the savers, they set aside money for the following reasons: emergencies; health and medical expenses; education; retirement; business capital; investment; and house purchase.

Of those surveyed, most said they kept their saved money “wholly or partially” in various institutions including banks.

The CES noted that 73.3 percent of households with savings have bank accounts. But this number is lower from 76.9 percent from the second quarter rate.

About 56.3 percent kept their savings at home, and 35.4 percent considered other institutions such as cooperatives, paluwagan, credit/loan associations, investments, microfinance, insurance, and e-wallets to put their savings.

The CES said OFW remittances sent to households with an Overseas Filipino as family member use these funds mostly to buy food and other household needs, also for education, and medical expenses in the third quarter.

The survey, conducted July 3 to 14 in both the National Capital Region and in areas out of the NCR, included 324 OFW households out of 5,404 household respondents.

About 96.3 percent of OFW households said they spend remittances for food and other household needs while 61.4 percent said they use it to pay for education.

Remittances are also spent on: medical expenses (51.2 percent), savings (37.3 percent), payment of debts (18.5 percent), investments (9.3 percent), and purchase of motor vehicles (9.3 percent).

All these numbers are higher compared to the second quarter CES results.

“In terms of the utilization pattern of remittances by area, a larger percentage of OFW households in the NCR allotted part of their remittances to education, medical expenses, savings, investments, and purchase of consumer durables, houses, and motor vehicles as opposed to their counterparts in (areas outside of the NCR),” said the BSP.

Meanwhile, the CES said about four in every 15 households in the survey availed of a loan in the last 12 months while access to credit remains easy for the third quarter compared to the second quarter. The loan proceeds in the last 12 months are mainly used to purchase basic goods.

In the third quarter, about 26.6 percent availed of a loan in the last 12 months, higher than the 24.8 percent in the previous quarter.

By income group, the highest percentage of households with loans are the high-income group at 28.3 percent, followed by the middle-income group at 26 percent and the low-income group with 25.8 percent.

Most households with loans use their borrowings for: to purchase basic goods (51.5 percent of households); business start-up/expansion (27.7 percent); education-related expenses (19.4 percent); health-related expenses (14.6 percent); and payment of other debts (11.1 percent).

The CES said 22.8 percent of households said they borrow money to buy real estate while 20 percent said they took out a loan to buy basic goods.

Other reasons for loan availment were: business start-up/expansion (17.6 percent); purchase of vehicles (8.7 percent); and education-related expenses (8.5 percent).

The BSP said about 83.2 percent of their loans were paid on schedule while 10.2 percent were paid ahead of schedule. Some 6.6 percent of households said they were behind schedule.

In the last 12 months, about 79 percent of loans were uncollateralized. Meanwhile, households that availed of a secured loan used the following assets as collaterals: ATM card (4.6 percent); land (2.2 percent); other real property (1.5 percent); and jewelry (1.2 percent).

Lending companies at 24.2 percent were the top source of these loans followed by relatives and friends at 23.9 percent, individual money lenders at 13 percent and another 10.6 percent from cooperatives. Banks only accounted for 10.4 percent.

The overall CES showed a consumer confidence index (CI) of -9.6 percent in the current quarter which was still in the negative, but it was better compared to  -10.5 percent in the second quarter. The CI is computed as the percentage of households that answered in the affirmative less the percentage of households that answered in the negative with respect to their views on a given indicator.

The CES questions were based on economic condition, family’s financial situation and family income. The result was that consumers were less pessimistic for the country’s economic condition but more pessimistic for the family’s financial situation and steady for family income.

Across income groups, it was less pessimistic among the low-income group, more pessimistic among the middle-income group, and less optimistic among the high-income group.