There’s a “rising overdependence” on overseas remittances by Filipinos from low-income households, who also need to improve their financial planning skills, says a study released Monday, Dec. 16, by a US-based international payments company.

According to UniTeller’s “Both Sides of the Coin: The Receiver’s Story,” half of remittances received by Filipino households are used for day-to-day family needs and bill and loan payments. The study also found that much smaller sums are allocated for education (13 percent) and savings (13 percent), while 7 percent is spent on non-essential luxury items (although doesn’t identify which kinds of items, exactly).

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The study is the report’s first edition, and looks specifically at behaviors of low-income remittance recipients in the Philippines, India, Indonesia, and Vietnam regularly receiving money from senders in Hong Kong, Singapore, and the US. Findings are based on a survey of 1,911 interviews with adults from low-income households (average monthly household income is at $175, or around P8,800), which was conducted in September 2019 (the Philippines had 606 respondents).

The second edition, which will focus on the senders’ perspective, will be released early next year, said Albert Guerra, UniTeller CEO.

Focusing on the topic of rising overdependence on remittances, Guerra said it wasn’t so much a problem but simply “a reality of life.”

“It doesn’t happen only in the Philippines, but in many countries. I think it’s good that there is that option to go out of the country to earn more money, and I think the Philippines has very good programs in place to train people to find good jobs abroad,” he added.

The bigger issue, Guerra said, is the apparent lack of financial planning know-how among recipients of remittances. According to the report, around 19 percent of recipients in the Philippines said they regularly run out of money before the next anticipated date of sending.

“That’s actually a lot—one out of five Filipino households says they regularly run out of money, which means that even if they allocate for certain expenses, these funds still aren’t being used efficiently,” said Noel Cristal, UniTeller Philippines country president.

Moreover, the survey revealed that Filipinos’ reliance on remittances was placing increasing emotional stress on the relationship between senders and receivers—despite the former’s average monthly remittance value of $446, which is two and half times higher than that of the latter’s average monthly household income. Forty-one of Filipino respondents said the expectation of receiving remittances had placed emotional stress on their families, and 54 percent said the same expectation had impacted their relationship with the sender.

Asked what could be the cause of such stress, Cristal said: “This could be because of instances when funds are still lacking, especially in the days running up [to the next scheduled remittance]. Senders, of course, would have allocated these funds already, but when their families say, hey, we’ve run out of money, that causes stress.”

The good news, said Guerra, is that many respondents indicated eagerness to learn and cultivate good financial habits (71 percent).

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And while cash remains king both across in Asia and here in the Philippines (35 percent expressed a high level of comfort in having excess cash on hand compared to putting it in a bank account, and 67 percent of international money transfers happening via cash pickups), digital channels are becoming more popular, with 78 percent of Filipino respondents saying that they have a mobile wallet account INQ

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