From the Midwest redneck author of "The Rooster Crows at 4am!," "Lizard Poop!," and "The Philippines Expat Advisor"
Latest Update on Philippine Peso to US Dollar Exchange Rate Predictions
The Philippine Peso to US Dollars exchange rate. Most American expats living in the Philippines that I know follow the PHP to USD conversion very closely. And despite a trend of strengthening that has led the peso to another four-year high last week, the local currency is expected to weaken throughout the rest of the year. It’s predicted to recover to less than 42 to $1 for the most part of 2013. If you’re an American that has retired to the Philippines on a fixed income, you might have some cause for concern.
You’d think that a guy like myself that is trying to peddle his latest 340-page E-book, The Philippines Expat Advisor, PEA, wouldn’t focus on potentially negative aspects of living in “paradise.” But though I sincerely believe my latest publication is one of the most comprehensive guides on moving to and living in the Philippines, I’m not going to “sugarcoat” the realities of life in the PH.
Inquirer Business, in a Sept. 17, 2012 article, reports that the DBS Group, A Singaporean financial services provider, said in its latest quarterly report on market strategies that the local currency was seen trading against the dollar at P42.60 by year’s end. The peso posted a record 41.56 to $1 last September 11. At the time of this post the exchange rate was 1 USD = 41.6034 PHP on xe.com.
DBS described the peso’s performance against the greenback to be stable between 41.20 and 43.80 to $1 in the next few months owing to favorable economic fundamentals.
The Singaporean group noted that 2012 has so far been a relatively favorable year for the Philippines compared to 2011. In particular, economic growth went faster while inflation eased. This enabled both monetary and fiscal authorities to focus on addressing threats to domestic economy from a weak global market.
“Investors were rewarded with a stable-to-stronger exchange rate, a record-high stock market, and all-time-low government bond yields,” DBS said.
Here’s the latest US Dollar to Philippine Peso 2013 exchange rate prediction from The Bank of New York Mellon:
2012 4th Quarter: 1 USD = 43.00 PHP
2013 1st Quarter: 1 USD = 42.50 PHP
2013 2nd Quarter: 1 USD = 41.50 PHP
2013 3rd Quarter: 1 USD = 40.75 PHP
2013 4th Quarter: 1 USD= 40.00 PHP
BNY’s forecast for the 2013 exchange rate seems to be fairly close in line with DBS’s predictions. In contrast, Lloyds Banking Group expects the Peso to weaken to P45.50 versus the greenback by the end of 2012, according to an article in PinoyMoneyTalk.com.
“US Dollar to Philippine Peso Exchange Update: Peso Hits 4-Yr High” was a earlier post I did regarding this topic. At that time, the PHP to USD exchange rate was 1 USD=41.68 PHP. The recent current high of 41.56 was a cause of some concern for me when I saw those figures.
A post I published, “Wide Range of Predictions for Philippine Peso vs. USD Exchange Rate,” on Feb. 19, 2011, had predictions from some financial institutions that the peso would improve to PHP 37.50 to $1 in 2011 and PHP 35.50 in 2012 from HSBC (Hong Kong and Shanghai Banking Corp.) The Peso closed at 43.8907 on 12/31/2011. At this time, the 2012 forecast for 35.50 doesn’t seem very realistic.
Thankfully, we had already done our monthly exchange when the new high was hit. If the DBS forecast is correct, we’ve weathered the worst of the storm, at least for the rest of 2012.
My advice to any American expat, living in the Philippines on a fixed income, is to have some sort of supplemental income coming in. The US Dollar to Philippine Peso exchange rate was over 48PHP to 1USD when we retired to the Philippines in July 2009. Without the additional income this website provides, including past generous donations, we would have been hard-pressed to make ends meet the last three years.
But when my Social Security kicks in, which I plan to take at age 62, it will provide us with an additional $1300 a month. With our current IRA monthly investment income, we’ll be living very comfortably in the Philippines, but we’re hopeful, of course, of better exchange rates in the future. I don’t know of anyone that’s not glad to have some extra cash coming in. Do you?