From the Central Illinois redneck author of "The Rooster Crows at 4am!," "Lizard Poop!," and "The Philippines Expat Advisor"
US Dollar to Philippine Peso Exchange Update: Peso Hits 4-Yr High
Are you an American expat living in the Philippines that keeps a close eye on the US Dollar to Philippine Peso exchange rate? Maybe you're a Filipino working overseas who sends money home to your family every month as my asawa used to do years ago. If so, the recent report that the Philippine peso recently hit a four year high is not welcome news for you. I'm certainly not thrilled with it. After almost three years in the Philippines, the current rate of 1 USD to 41.68 PHP doesn't do much for the budget. 
The Malaya Business Insight reports that the peso also has maintained the least volatility among Asian currencies. It posted the best appreciation against the US dollar among other Asian currencies from January to July 2 this year.
Data from the BSP showed that from January to July 2, the currency has appreciated by as much as 4.33 percent, the highest in the region. The most depreciated currency was India's rupee at -4.34.
In terms of volatility, or the degree of fluctuation against the dollar, the Philippine peso remains to be the least volatile in the region at 1.14 percent followed by the Singapore dollar at 1.2 percent.
Most volatile is still the rupee at 4.76 percent followed by the New Zealand dollar at 3.1 percent and the Australian dollar at 2.93 percent.
The stronger peso is certainly going to hurt the ranks of the Overseas Filipino Workers, OFWs, whose monthly remittances will mean less US dollars being sent to their loved ones here. Without those OFWs making sacrifices to support their families in the Philippines, the economy here would suffer a major blow since those remittances comprise a tenth of the total Philippine economy.
Results of the 2011 Survey of Overseas Filipinos showed that the total number of Filipino workers who worked abroad anytime between April to Sept. 2011 grew to 2.2 million in 2011 from 2.0 million in the same period in 2010.
Total remittances also grew for the period, to P156.3 billion from the previous year's P141.2 billion according to the Business World Online.
While my asawa and I are currently living below the U.S. poverty level of $15,130 a year for two people, we're still enjoying a comfortable lifestyle. We can still live cheaper in the Philippines.
Check out the above chart of historical US dollar to Philippine peso exchange rates since we've moved here. (Source: fxtop.com)
Though today's exchange rate is at it's lowest point since we first arrived in Guimaras, a rural province in Western Visayas, August 2011 (circled in yellow) was also another bad month. The best exchange months occurred when we moved in July 2009. May 2010 (circled in red) was another good month.
In July 2009 1,000 US Dollars would yield 48,300 Philippine Pesos. Today that same $1,000 exchanges for 41,690 pesos. That's a loss of 6,610 pesos each month. When you're on a fixed income, that hurts.
But we sit now and wait for our monthly deposit to be sent from our retirement account back in the States and won't do any exchanges until we have our allotment.
Maybe the exchange rate will even worsen in the coming days? Hopefully not, but I can't see any major improvements with the current state of affairs back in America that will strengthen the US Dollar.
Aside from the continuing dispute the Philippine government has with China over in the South China Sea, I don't see anything on the horizon here that would cause the weakening of the peso at this time.
Though I'm concerned, we'll just weather the storm and kick back and enjoy life despite the current exchange rate. It's still more fun in the Philippines. Most of the time.
Dave,
Hopefully by 2014 the rate will be better. I can’t see it getting much lower, would have an affect on the Philippine economy. I know it could hurt expats who only have a limited budget. Thats why we will have other sources of income when i live there, like my g/f’s business. Take care and hope you had a nice 4th of July.
Hopefully it won’t get any lower, PapaDuck. As I was complaining to Randy L on Facebook earlier today, we don’t have our monthly amount from our IRA account deposited yet but perhaps that’s a blessing in disguise. Maybe the rate will inch up a bit by the time we do our monthly exchange. Fourth of July? PapaDuck, the only fireworks I let off was when I saw the news about the exchange rate.
it is now at 40.1 today
Dave, well I’ll “pop off” a few beer caps for you today in celebration.
Just checked http://XE.com and it was P41.74 – that’s quite a difference.
i should have said it was 40.2 at the robinson mall on the 3rd of july at the exchange window in iloilo
Thanks, Scott, I have it at 41.67. I use XE online. I believe what you see at Robinsons is the current rate their current rate they will give you for the exchange.
Thanks, RandyL, have a great holiday.
That would be your rate to buy pesos with your dollar, right? My bank in the Phils. is at 41.80 today, about the same. I found XE to have high fees, so I quit using it. What about you?
I just use XE to look up the rates, Ice Man. What does everyone else use to check the current market rates? I’m curious.
XE has the best rates to send money, not convert currencies. Banks will have the best rates for converting. We send dollars to the RP and have wife’s sister go to the bank, otherwise we would lose almost P1.50 per dollar.
Thanks, Randy. We have been paying ATM fees up until this month and using our debit card from the States (have to wait for our money this come to come in first, it was delayed by the 4th of July holiday.) We now have a peso bank account in the Philippines. Have to see how that works out.
Hi Dave: Excellent article. Europe’s woes are still dogging the global economy. Food prices are up in the U.S. and there is talk of QE3 among the financial networks. QE3 could devalue the dollar more. Not a very positive note for us late baby-boomers as we will be paying more for our everyday costs in addtion to tax hikes. Salaries are not moving up and the job market environment is dismal.
Heya Dave, saw you lounging at SM Supermarket earlier today. How’s it goin? Nice hair by the way.
Thanks, Terry. Must have had a good hair day for a change. I was sitting in what I called the “old man’s chair” waiting for my asawa to finish her shopping. Only had to wait one hour. I was posted appropriately enough next to the “Senior Citizen’s” lane and was chatting with the checker and her bagger. I met a nice gentlemen named Patrick and his Filipina wife from my home state of Illinois. I love to chat with people. Next time stop by and say “hello.”
I also met a friend from Guimaras, a gentleman from Wales named John, while I was doing my shopping. My asawa and I take separate carts and meet up later outside of the checkouts. While speaking to John, a middle-aged Filipina approached me and asked me where I was from. “America” I replied. “Where at in America?” “Illinois, but I live in the Philippines. I’ve been married to my asawa for over 12 years.” She stood there and stared. I had the feeling that there was something not quite right with the lady. “This is my brother, John” I told her, pointing to my friend. “He does not look like your brother” she said. “But he is. You cannot see the resemblance?” I asked. She stood and looked some more. John struck up a conversation with me, excused himself, and we were able to walk away. The lady started following me. I took off across the store looking for my spouse. I managed to get away. John and I both remarked that there was evidently something wrong with the poor lady. Guess I better start turning off the charm when I go somewhere.
Hi, Roselyn. Good to hear from you. Yes, unfortunately Europe’s problems are really impacting our economy negatively. Food prices in the Philippines are also rising, but my asawa has found a good source to buy rice at P36 a kilo which isn’t bad. Fish prices have gone up somewhat because of the typhoon season, but still cheaper to live here if one adopts a more “native” lifestyle. The economic and job outlook for the States doesn’t look good, and I think retiring to the Philippines is still a good move for a lot of folks.
Today 7/12 was another good day for the Dollar’s strength against most currencies as most metals slid for the 4th consecutive day. After a strengthening of the Peso during the week previous, it has declined steadily since the 5th and has breached above the P42.10 with a strong ending in that direction today. With the Fed not discussing another round of QE in yesterday’s meeting, stocks fell for the sixth straight day. All this and continuing troubles in Europe props up the dollar and give us better exchange rates to look forward to, for the short term at least.
I just saw the peso was at 42 to 1, Randy. Already did my exchange for the month, but look forward to a better exchange rate next month. Guess I better not look at my retirement account if the market has been down for the sixth straight day. You win some, you lose some. It’s a crap shoot.
Hi Dave: I couldn’t disagree with you. “Retire to the Philippines and go native” is a good move. Have a great week.
Thanks, Roselyn, take care.
Terry, does Dave need a haircut?
I wouldn’t!