We have $100, you have P5,852

“Never spend your money before you have earned it.”

—Thomas Jefferson

 

By Alex P. Vidal

 

RIGHT now, if you have P5,852.75, it is equivalent to US$100.

If we intend to send P2,926 to our loved ones in the Philippines, we remit $50 or $60 (the additional $10 is for wire transfer fee).

Yes, the Philippine peso is “weak” once again as we end the year 2025.

Filipinos abroad are expected to send money in the Philippines starting November for the entire Yuletide season in December until New Year 2026.

The reason Philippine peso is weak today is probably due to a combination of political uncertainty stemming from government corruption allegations (notably the flood control project scams), a recent cabinet reshuffle, and expectations of further interest rate cuts by the central bank to support economic growth.

These factors may have negatively impacted investor sentiment, causing foreign investors to pull back from the stock market and putting downward pressure on the currency.

Investigations into alleged graft in DPWH flood infrastructure projects may have led to a broad exit by foreign investors and a decline in business confidence.

 

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A recent shake-up in government leadership, including the Department of Finance, has reportedly created uncertainty about potential new policies and the overall stability of the economic leadership structure.

The central bank may continue to cut interest rates to cushion the economy from the fallout of the corruption scandal, which can make the peso less attractive to investors compared to currencies with higher returns.

Also, expectations of slower growth have weakened investor confidence and contributed to the peso's decline. Trade deficits, interest rate differentials, and other factors also reinforce the peso's weakness.

The combination of political uncertainty and concerns over economic growth may have led to a negative market sentiment, with foreign investors pulling money out of the stock market.

Political risks and instability may have led also to weak confidence, keeping trading volumes subdued.

It is always beneficial to send US dollars to the Philippines when the dollar-to-peso exchange rate is high because the money will be converted into more pesos, which increases the financial assistance received by the family.

A high exchange rate means one US dollar buys a greater number of Philippine pesos, making the remittance more valuable in the Philippines.

 

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When the rate is high, say 1=58 pesos instead of 57, the recipient gets more pesos for each dollar we send. And for those who rely on remittances for daily expenses, this can mean they have more money to spend on needs like food, education, and healthcare. 

We have to consider this: "High rate" for sending dollars means the dollar has a high value relative to the peso. If the peso is strengthening and the rate is lower (e.g.,1=57 pesos), it is less beneficial for the sender.

Exchange rates fluctuate, so it's a good practice to monitor them to time we transfer for the most favorable rate.

Different services have different fees and exchange rate markups. Compare transfer services to find the one that offers the best rate and lowest fees after all charges are factored in.

We always consider the transfer fees and exchange rate costs in advance, as these can significantly impact the final amount received. 

Under the news system, we can send money online through apps or websites, and recipients can receive funds digitally to a mobile wallet or bank account, or via cash pickup locations, often without a bank account.

 

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Digital transfer options can be very fast, with some services offering same-day or even instant transfers once funds are received.

Many online transfer services and fintech apps offer competitive exchange rates and lower fees than traditional banks, allowing more of your money to reach the recipient.

We learned that the Philippine government does not impose taxes on personal money transfers from overseas.

Digital platforms provide security features and allow us to track the status of our transfer online.

Recipients have multiple options for receiving money, including direct bank deposit, cash pickup, and mobile wallet, allowing them to choose what is most convenient for them.

(The author, who is now based in New York City, used to be the editor-in-chief of two leading daily newspapers in Iloilo, Philippines.—Ed)

 

$100 is now equivalent to P5,500

“A flexible exchange rate is important, and it shouldn't be artificially restrained because of the needs of the economy.”

—Elvira Nabiullina

By Alex P. Vidal

WHEN I made a transaction with the Western Union in Manhattan at around 9 o’clock in the morning yesterday (June 27), the exchange rate was US$1 to Philippine Peso 54.3132.

At past 12 noon the same day, I went to the Queens branch of San Franciso-based Lucky Money, Inc., a Filipino-run remittance center and the exchange rate was US$1 to Philippine Peso 54.85.

What does it mean?   

The Philippine peso has breached the P55-level against the US dollar.

The Filipino currency finished at P54.78 versus the greenback, stronger than its previous close of P54.985. 

We don’t know how will these changing of currency rates go on. 

For us who remit to the Philippines, the current rate is “favorable”, to say the least for obvious reasons.

For our families, well, they may not feel if it is “favorable” or not since they are the receivers, but it’s their economic life that will serve as the basis if the mighty dollar against a weak pesos will give them satisfaction, in one way or the other.   

In the previous years, when the US dollar threatened to “run away” from the Philippine peso in the exchange rate that went steady at $1=P48-P49 for a while, the most it could take was $1=P50-P51 then back to $1=P48-P49.

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“After the government started easing pandemic curbs, the peso has started to feel the pressure from rising imports, which were meant to meet improving domestic demand as the economy reopens,” reported the Philippine Star. 

“Expensive global oil prices have also bloated the Philippines' import bill, stoking more dollar outflows.”

The economy's performance is at the heart of the decision to buy or sell dollars.

According to Ivestopedia’s Nick Lioudis, a strong economy will attract investment from all over the world due to the perceived safety and the ability to achieve an acceptable rate of return on investment.

Since investors always seek out the highest yield that is predictable or "safe," an increase in investment, particularly from abroad, creates a strong capital account and a resulting high demand for dollars, explained Lioudis.

“On the other hand,” he explained, “American consumption that results in the importing of goods and services from other countries causes dollars to flow out of the country. If our imports are greater than our exports, we will have a deficit in our current account.”

With a strong economy, a country can attract foreign capital to offset the trade deficit. 

That allows the U.S. to continue its role as the consumption engine that fuels all of the world economies, even though it's a debtor nation that borrows this money to consume. 

This also allows other countries to export to the U.S. and keep their own economies growing.

“From a currency trading standpoint,” Lioudis further explained, “when it comes to taking a position in the dollar, the trader needs to assess these different factors that affect the value of the dollar to try to determine a direction or trend.”

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Lioudis explained the causes why the dollar rises, the factors that influence the exchange rate, and what makes a currency weak:

What Causes the U.S. Dollar to Rise? There are a variety of factors that cause the U.S. dollar to rise, but the primary factor that it boils down to is demand for the dollar. If the demand for the dollar increases then so does its value. Conversely, if the demand decreases, so does the value. The demand for the dollar increases when international parties, such as foreign citizens, foreign central banks, or foreign financial institutions demand more dollars. Demand for the dollar is usually high as it is the world's reserve currency. Other factors that influence whether or not the dollar rises in value in comparison to another currency include inflation rates, trade deficits, and political stability.

What Factors Influence the Exchange Rate? Factors that influence the exchange rate between currencies include currency reserve status, inflation, political stability, interest rates, speculation, trade deficits/surpluses, and public debt.

What Makes a Currency Weak? A weak currency is one whose value has declined in comparison to another currency. Weak currencies are those of nations that have poor economic fundamentals or an ineffective government. A weak currency can be derived from high levels of inequality, political instability, and high levels of corruption, public debt, and trade deficits.

(The author, who is now based in New York City, used to be the editor of two local dailies in Iloilo.—Ed)