Overseas Filipino Workers (OFWs) send home billions every year, fueling not just family needs but also the Philippine economy. Yet behind the remittance numbers lies a more personal story: many OFWs still come home with little savings, struggling to achieve the financial security they sacrificed so much for.
In an interview with Financial Adviser PH, Edwin P. Mercado, an Associate Financial Planner of RFP Philippines, shared insights from his research among OFWs in Saudi Arabia. His studies—covering financial education, spending behavior, and savings discipline—offer a clear picture: it’s not just about how much you earn, but what you do with it.
Access to Financial Education: A Good Start, But Not Enough
OFWs are not short on financial advice. Pre-departure seminars, OWWA workshops, even online financial literacy courses are available. These programs teach budgeting, saving, and even investing. “Education is critical,” Mercado explained, “but access alone doesn’t guarantee success.”
His research found that greater access to financial education does lead to more consistent saving. OFWs who joined financial workshops or actively sought advice were more likely to keep emergency funds and feel confident about managing money.
But there’s a catch. Education often raises awareness without always changing behavior. A one-off seminar won’t stop an OFW from overspending on pasalubong or giving in to family pressure if habits aren’t reinforced. “Information is powerful,” he said, “but knowledge without action is like a map no one follows.”
Spending Behavior: Where Money Is Made—or Lost
Mercado’s data shows that spending discipline has a slightly stronger influence than education on whether OFWs actually save. In fact, the model he built explained over 65% of savings behavior, with spending habits edging out financial literacy as the bigger predictor.
Spending behavior is shaped not just by self-control but by culture and emotions. The Filipino tradition of generosity—sending remittances, maintaining lifestyle expectations, bringing home gifts—can quietly drain funds. “Pasalubong isn’t just chocolate or perfume,” Mercado noted. “It’s cultural obligation. But unmanaged, it eats into savings.”
Research confirms this. Studies show that deliberate spending choices predict wealth more reliably than income levels alone. For OFWs, that means budgeting, tracking expenses, and resisting impulse buys can do more for financial health than simply working longer hours.
The Power and Struggle of Saving Consistently
If spending is where decisions are made, saving is where discipline shows. Mercado’s study defined savings behavior as regularly setting aside income, maintaining an emergency fund, and preparing for long-term needs.
“Many OFWs intend to save,” he shared, “but the intention-behavior gap is real. The daily pressures of remittances and expenses abroad make it hard to follow through.”
Those who succeeded in saving, however, reported higher financial confidence—less stress, greater optimism, and readiness for emergencies. Technology is helping too: mobile banking apps, automated transfers, and reminders make saving easier. Still, challenges remain. Not every OFW has access to trustworthy banking systems, and high remittance demands often derail plans.
Which Matters More: Knowledge or Action?
The big question Mercado’s research tackled was: what matters more, financial education or spending behavior? Both were significant, but spending discipline came out slightly stronger.
“Think of it this way,” he explained. “Education is knowing you should budget. Behavior is actually sticking to the budget even when your family pressures you to send more. It’s not what you know, it’s what you do with what you know.”
This echoes global studies: while financial literacy improves awareness, it’s consistent habits that drive long-term wealth. For OFWs, that means every small choice—whether to save or spend—directly shapes their financial future.
Practical Steps That Work
So what should OFWs focus on? Mercado suggests blending education with action:
Join financial workshops – but pair them with tools like expense trackers and budgeting apps to reinforce learning.
Set up automatic savings transfers, so money is saved before it’s spent.
Create accountability circles—peer groups or mentors who can encourage discipline.
Align family expectations with financial goals. Clear communication about remittances can ease the cultural and emotional burden of always giving more.
The Bigger Picture
At the end of the day, OFWs need both education and discipline. Knowledge helps avoid scams, plan retirement, and understand investments. But it’s habits—daily, mindful, sometimes difficult choices—that turn income into wealth.
“Our OFWs are resilient, hardworking, and generous,” Mercado concluded. “If they can channel even a fraction of that discipline into saving and spending wisely, the future becomes theirs to shape.”
For every peso earned abroad, the real question isn’t just how much comes home—but how much stays saved. Because financial freedom isn’t about sacrifice alone; it’s about making every sacrifice count.
