Philippine Peso Vs. US Dollar

The Philippine Peso, PHP, exchange rate vs. the US Dollar. It’s a topic of great interest among American expats living in the Philippines as any fluctuation in the rate directly impacts our finances. A weaker peso means more money in our pockets. The recent drop in the PHP, which weakened to 44 to 1 at one point, was doubtless cheered by my kano friends all across this archipelago. If the rate holds to around 43 to 1, it means several thousand pesos  extra for us from last month when we do our upcoming exchange. 

Stack of Philippine PesosIn early June our exchange rate was 40.95 to 1. At the time this post was published, the rate was 43.09 to 1.

What’s driving the recent Philippine Peso vs. US Dollar activity? Analysts say investors are dumping risky assets amid speculations the United States may withdraw its stimulus measures as the world’s largest economy shows signs of recovery. American consumer confidence rose to a five-year high of 76.2 in May.

Contrary to the  Bank of America prediction last year that the Philippine peso could hit 30 plus-level this year, the exchange rate versus US Dollar continued to weaken at the 43-to-$1 level in June. Above 43-mark is said to be the weakest since June 26, 2012 when it hit 42.47.  (source: The Summit Express)


The expensive valuation of the local stock market was likewise cited as another key factor behind the sell down.  The Philippine Stock Exchange Index tumbled to 5,789.06 last Tuesday, the lowest close since December 19, before bouncing back in a technical rally on Wednesday and Thursday. The index on Tuesday had lost 22 percent from a record 7,392.20 set on May 15, wiping about $62 billion in value from the stocks. 

Stratbase Research Institute, a private think tank, noted that the plunge of Philippine stocks and the peso amid the uncertainty in the global economy highlighted the need for the Philippines to attract job-generating foreign direct investments to achieve inclusive economic growth.

Stratbase president Victor Andres Manhit said the best protection for stock investments was solid economic growth, fueled by job-generating investments, which the Philippines lacked. He cited that foreign direct investments in Philippines was the smallest in Southeast Asia, depriving millions of jobless Filipinos of employment opportunities.

Unemployment rate in the Philippines climbed to a two-year high of 7.5 percent in April 2013, as three million Filipinos of working age had no jobs while another 7.25 million considered themselves underemployed.

Manhit added the robust 7.8-percent economic growth in the first quarter was driven by remittances and consumer spending, and not by investments and manufacturing. (Source: Manila Standard

The Philippine Stock Exchange is now one of the the worst performers among Asian markets, on poor exports and jobs figures.

The weakening Philippine peso is good news for those who have remittances in the Philippines as their money will be valued more. Its also beneficial to the export side.

However, the effect is opposite on the importation of good and services.Philippines.

Here’s another prediction regarding the Philippine Peso vs. the US Dollar made at the end of last year: Merrill Lynch of BoFa said that we could expect an average of 41 to dollar by the first quarter of 2013 and strong forecast of 39.80 appreciation for the rest of the year.

BofA’s forecasts were stronger than the government’s official assumption of 42-45  for 2013. 

On July 4, 2012, I posted “US Dollar to Philippine Peso Exchange Update: Peso Hits 4-Yr High.”  The rate then was 1 USD to 41.68 PHP but as many American expats living in the Philippines know, things got even worse in January 2013. The peso surged below 41 against the US dollar, closing at P40.77, on the first business day of the 2013 New Year. This rate was a five-year high at the time and represented a gain of P15.55, or 27.62 percent, from the 2005 low when a dollar fetched P56.32.  (Source: Inquirer Business)


Ten dollar bill

Some like to speculate on where the Philippine Peso vs. US Dollar exchange rate will go. But that’s all it is, speculation. Not even all the financial experts can agree. I have seen highs of 45 PHP to the dollar by year’s end and lows of 37 to 1 predicted.  

One bit of advice.  Get your financial house in order before you decide to move to the Philippines. If you have to,  wait until you have a good, steady source of guaranteed monthly income before you arrive. Of course, all of us want more money in our pockets, but if you get  too obsessed about the Philippine Peso vs. US Dollar exchange rate, you’ll drive yourself crazy. And some of us, like myself, are already there. 


  1. Hey Dave,

    Good article! I was there in Feb. and March of this year when the exchange was I guess the lowest its practically ever been,(high 40″s-low41’s)yet I thought I was still getting some fairly good buys on some things at least. Do you have any idea what CD’s are earning there now Dave, currently here, a 3 year one just renewed, and for only 0.94% which is the lowest I have ever seen here, and a 5 yr. CD is 1.15%, so its kinda like why bother with them, but I also don’t want to invest in anything that has any risk as I cant afford to loose any, with plans for retirement so close.

    The main thing that’s determining when I retire and when we can move there is the real estate market here, it is getting better slowly but still has a pretty long way to go yet, but we live within 50 miles of Washington DC, so its not near as bad here as say the Midwest. Am hoping and praying that by 2018 I can sell and move there, just hope I can adjust to living there, cause I really do love the Phil. but not sure if I can handle the all the differences for sure or not. Like you, not having running water full-time, don’t know if I could adjust to that or not even, cause I am a spoiled American I guess. We had always planned to build there rather than rent, that way, a well could be drilled, a generator installed etc. but I wouldn’t do any of that if we rented, cause I don’t care to improve someone else’s property just so they can kick me out and keep it all.

    1. Thanks, Bill S. I’ve been meaning to address the recent peso situation and finally got around to it. More and more, I’m on Filipino time, and that’s really not a bad thing all the time. CD rates, Bill, or Time Deposit rates? Here’s some info:
      BPI 1 Year Time Deposit 1.125% – Rate is for a ‘Regular Time Deposit (Peso)’ deposit of 5 MM and up and for 364 days….
      Metrobank 1 Year Time Deposit 1.375% The time deposit td interest rate is a for a deposit of 50,000 to 199,999 Peso and applies for a ter…
      UnionBank 1 Year Time Deposit 1.8500% Interest Rate % is applicable for 12 months/360 days for a balance over P5,000,000 in Peso currency….
      Allied Bank 1 Year Term deposit 1.675% The Interest Rate is determined by the amount deposited over a 12 month/1 year 360 day period which …
      PNB 1 Year Time Deposit 1.675% The interest rate applies to Peso time deposits that range 181 – 360 day. The rates vary accor… More Info
      BDO 1 Year Time Deposit 1.125% The interest rate is for an approximate 12 month / 1 year term (360 days) for Peso deposit balances …
      LANDBANK 1 Year Time Deposit 1.25% This LANDBANK product is denominated in Peso and requires a minimum of P 1,000,000.00 – below 100 M …

      Well, Bill, the Philippines isn’t for everyone. It’s a completely different world from life in the States. I’ve been here almost four years and I’m still adjusting. Some folks come out for a few months or so and check things out. Some move back to their home country. Some stay. Only way to tell is to come out and give it a try.

  2. Hi Dave: I sure like having the extra pesos. 🙂

    Hi Bill S.: I have been here for over 3 years now. I still rent. It is best for me. You have to be VERY careful building a house here. Remember this… You will NEVER own a house and land here, NEVER! You will buy someone else the house and land. 🙁

    1. Me, too, Gary. It makes it even more fun in the Philippines.

      Good point, Gary. You will never own the land or your house. I plan to stay on my wife’s good side so she doesn’t give me the boot when we get our new place next year. Guess I better watch my Red Horse intake on the upcoming “Babes & Beer Tour” in Guimaras. My old friend, The Tom Cat, will be accompanying me. More on that later.

  3. Dave, an extremely well done article for someone not in the finance business.

    1. The Php isn’t falling. The dollar is rising, and you got the reason about 2/3 correct. There really is no economy in the US anymore. There is only the Fed. They are hinting at tapering down quantitative ease by this fall, but it’s a stretch to believe the articles you read on this because just six days after Bernanke’s announcement of taper, the final revision for Q1 2013 GDP came in at a horribly weak 1.77%, and odds seem good Bernanke knew it when he announced taper. But . . . the result was a sharp increase in US interest rates, and that usually strengthens currency.

    2. It might be useful to note that when the Php weakens, oil imports costs more money. Everything gets made or transported with oil, so celebrating the 44:1 rate may be unwise. Costs might eat up the conversion gain.

    3. It’s good that you recalled the completely wrong BAC prediction. It’s a lesson worth remembering — namely, none of those guys know what will happen to currencies. None. Many will claim to. None do. They publish analyses just to reassure clients that the people they bank with are sophisticated financial whizzes, and no need to check the track record.

    1. Thanks, Owen, finance is certainly not my strong suit. I struggled with math in high school and my “C’s” in that subject kept me off the honor roll my freshman year. Thanks for your detailed analysis. I agree. The Fed reigns supreme in the States. When Bernanke speaks, it’s like Moses coming down Mount Sinai with the Ten Commandment tablets. But I’ve heard rumblings that Obama might be replacing him?

      I’m insulated, somewhat, from the price of oil as far as my local transportation costs go. I know higher oil prices mean higher prices for goods and an increase in the inflation rate. When we buy a new vehicle next year and ditch the jeepneys, I will pay closer attention to the price of oil. I haven’t checked the price of a barrel of oil in years now.

      I couldn’t agree more about these so-called financial experts and their predictions. NONE of them have a crystal ball that will accurately predict what will happen with the currencies.

  4. Dave,
    Thanks for all the info, sounds like interest rates are slightly better there, but still nothing to get real encouraged by. As I understand, once I become a legal citizen there, I can open an account. Each total deposit per bank is insured with something similar to our FDIC for a sum of 500,000p I read, as some banks there have failed in the last couple years and it may take years for the insurance to actually pay the depositors, that lost money. So, sounds like it would be best to keep it here for the most part, and transfer as needed, I guess.

    Yes, I know it will be very different, but that’s also one of the things I like about it so much there.Kinda reminds me way back when I was quite young and living in a very small town in the Midwest, before we moved to a large city there when I was about 10. I can, and try to adapt to things, but just reading the way some things are there, not so sure how well I will adapt till I try it at least, just don’t want to become an ugly American there, I embarrass my fiancée enough when I was there last time, not the ugly American kind of stuff, just I have a big mouth sometimes, and don’t always keep it shut, plus I enjoy making her squirm a little bit as she is quite conservative, as many there are. Will be looking foreword to upcoming stories on the Babes and Beer tour, especially if it has LOTS of pictures, preferably of the Babes, I mean a bottle of beer is nice to look at, but you see one bottle its pretty much all alike, but babes, there much more fun to look at, especially the ones from there.

    Gary, Understood, building is not something I would rusk into for sure, and I know, my wife would be the owner of it, but am ok with that, as I would want her to have a home once I am gone, but I also know things don’t always work out, so would be a few years before doing that. Would like to be able to have a small woodwork shop there, not to try to make any money cause I know that wouldn’t happen, but just to have something to do, that’s the business I am in here and would keep a few select machines to possibly bring there on day, just don’t know if 3phase power is avail there or not except in industrial areas. The current plan would be to stay there for 2 years, and not come home, just learn to adapt to it there, at the end of 2 years I would think I would have a pretty good idea of if I can make it there or not. I kinda think if I could endure the bureaucratic hell, that is Manila, I could endure anything else there, I’m hoping anyway. I have had a fair taste of the odd way some things are done there, compared to here, I just MUST get used to the idea its not my country, I am just a foreigner there.

    Steve, yeah, we are pretty close to each other, I am in the southern end of Fauguier, out in the country. Really weird how we can find people so close to each other on these sites.

    1. You’re welcome, Bill S. I plan to keep the bulk of our money deposited in the States. Rural banks fail in the Philippines at an alarming rate and good luck at trying to get your money back if one of them closes.

      Embarrass your fiancée? Brother, if I had a peso for every time I embarrassed my poor asawa our last four years in the Philippines, I would be a much richer man today. I am loud from the get-go. Once I have a San Miguel Pale Pilsen or two, the volume gets cranked up even more. I talk with everyone. Our garbage collectors. Our street sweepers. The security guy at KFC who insists on bringing my food to my table and getting me super fast service even during the crowded lunch hour. I just like to talk to everybody.

      Ahhh, “The Babes & Beer Tour: Guimaras Edition” will probably kick off this weekend. My good friend, The Tom Cat, whose own fiancée, LenLen, is one of my wife’s legion of relatives on the mango island, will be my co-pilot on this tour. We don’t hang out at our usual spot, The Shirven Hotel, and we’re looking for a new hang out on the mango island. Tom’s bringing his camera. I’ll be borrowing my asawa’s Sony CyberShot and she has given me her blessing for the tour, although she will tell me not to drink too much, and as usual, I will not listen. Plus, it’s all for a good cause! More details coming soon.

      Bill, if an old geezer/fart like me with diagnosed OCD can break his routine and adjust, I know you can, too.

  5. Dave,
    Thanks for the great info about the exchange rates. For us for the most part its better to have a stronger peso which is opposite of most expats. That tour sounds like a lot of fun. We will be there in 4 more weeks. Looking forward to getting there. Had an unusually high tempature of 66F here in Ohio for July 1st. Anne is not used to the cool tempatures.

    1. You’re welcome, PapaDuck. 66? I haven’t experienced that low of a temp in 4 years. Melinda came to the States in the November. She had to wear a face mask when she went out to protect her from the cold, but she got used to it. She said her first snow was like walking through sand on the beach, although much colder.

      Looking forward to your arrival, it won’t be long now. Have a safe trip.

  6. Seriously!!! Can someone please explain to me how the Philippines calculates unemployment rate? There is no way in hell the unemployment rate in the Philippines is 7.8%.

    That is totally absurd!!! We all know the rate is WAYYYYY higher than that.

    As far as the exchange rate. That is a good and bad thing.

    Great for us that exchange money regularly…not so great as far as signs related to the Philippine economy, although it is usually a sign of the dollar itself getting stronger.

    Why would anyone put a lot of money in a 5 year CD paying rates that low? Inflation wipes that out immediately.

    Listen guys, if you are in the Philippines and want to start a good little business (you need a decent amount of capital to make it work) then get into lending.

    Look at what a lot of the loan people from India have done. They do REALLY REALLY well giving out micro loans. When I lived in Mindanao we gave out loans, all legal and secured with collateral and we did really well.

    My goodness, 5 Year CDS for those rates!!! Wow.

    1. That unemployment rate is not accurate, Todd. I can’t recall the Senator’s name, but he said the true unemployment rate was closer to 45 percent which is much closer to the actual figure. The National Statistic Office doesn’t count people who are actually unemployed. If someone quits looking for a job, they are not counted. If a person works on a farm and doesn’t get paid, they get counted as employed. If a person works one hour a week, they are counted as “underemployed” but not “unemployed.” It’s all smoke and mirrors, worthy of any magician’s best illusions. If it weren’t for over 10 million Filipino’s working overseas, the figure would be much worse.

      Micro lending is a good business option, Todd. Indians in the Philippines are one of the main micro lenders around, but also the target of robberies and disgruntled customers who don’t pay their loans back. But it’s something worth looking into, as long as the loans are legal and secured with collateral as you mentioned.

  7. Bill, you are is NOT your country and you are NOT going to change anything major there.

    There really is no magic secret to adjusting to the Philippines. You either have the type of personality that can adapt to things being much different…or you do not.

    I have many friends from America that have NOT been able to adapt and then I have friends that take to the Philippines like fish to water.

    I have had ZERO issues with adapting to the filipino culture. But I am a minimalist. I do not need a lot and I am not the type of American that thinks I am the cock of the walk because I am American. Those are the guys that usually end up having the problems.

    You will know VERY quickly if you can live in the Philippines. It will not take you long. If you have a hard time adapting to wonderfully hospitable people that treat you super well then you might be in trouble.

    If you are the type that thinks everything in the Philippines should be like America…and YOU are going to make that happen…don’t even bother. You will NEVER make it in the Philippines.

    And if you are the type that cannot take a deep breath, laugh at yourself and some of what you see….FORGET IT!

    One of the reasons I have adapted so well (my filipino friends say I am more filipino than they are!) is because I do not try to replicate the life I have in America in the Philippines.

    If I wanted my life in the Philippines to be like it is in America…I would stay in America!

    Those of us that love the Philippines certainly do not need any Americans or other foreigners coming here and bitching and moaning and groaning about everything they see here. Those guys disgust me and I tell them to their face they would be better off going back to their countries.

    I hope you adapt well….the Philippines is a wonderful place to live as long as you have enough money for the basics and a little fun.

    Guys like Dave appreciate their lives there…I think I am correct in assuming that…and guys like me really envy guys like Dave.

    1. You’re absolutely correct, Todd. I agree with you 100 percent. I’ve met too many Americans here that think they can change the Philippines into the United States, it’s not going to happen. Best to stay in the States if you feel that way.

      And yes, you’re right, Todd. I do appreciate my life in the Philippines. I’ve living the adventure. I’m fortunate to have a wonderful Filipina wife and relatives that look after me. It really is more fun in the Philippines. Thanks for the input, Todd. You’re right on.

  8. Dave,

    Clarification. Bernanke’s term expires in January, and he has made it clear he doesn’t want another. Obama is not removing him. But yes, he will be replaced.

    Oil is all important ( price is $100ish / barrel ), amid claimed abundance, and it was $23 in 2000. The only thing keeping it as low as $100 is the massive unemployment in the US has people not driving to work and US oil consumption is down about 10% over the last few years (despite population increase).

    One of you other posters asked about unemployment definition for the Phil’s. There is a good wiki on unemployment. Recommended reading.

    1. Thanks for the clarification on Bernanke, Owen. I really don’t read the news regarding America that much anymore, and I’m out of touch. I read four daily online newspapers in the Philippines and catch the obituaries from our local paper back home in Illinois.

      I believe unemployment figures both in American and in the Philippines, Owen, are manipulated by government agencies in order to make whatever administration is in power look better. There is no way there are only 7.8 percent people unemployed in the Philippines.

  9. Yeah Dave, sounds like I am kinda like you then, I’m not so loud but like to talk to people, and most all people there are so friendly and approachable, unlike many here who are snobby and think they are far superior than others, but I like to “think anyway” I’m not like that, and would best describe myself as a semi-redneck maybe. Its not when I embarrass her that’s so bad but it usually means she is also mad at me, and am sure you know even better than me, Filipino women have quite a temper. When she starts speaking Tagalog and and were not around anyone else, that’s when I know I’m in trouble, cause I don’t know or speak Tagalog.

    Todd, thanks for your comments, am hoping I can adapt, change is what I am wanting in my life at this point, but that much change so quick has my attention, and that’s why I read and try to learn as much as I can about others peoples life there, in hoping it will give me a better idea of what to expect,even if only somewhat to expect. I have been to quite a few places in my life, in Asia and Europe, but the Phil. is the only place I have ever been where I almost immediately felt to myself, hey,,,I could live here and be quite happy I think. I will want some American things I am sure, and if I can find them and have them, then, why not? Money is not a real big concern for the most part, think we will have enough to live comfortably there, just wish CD rates would get back up to the 6% or so range at least, then we could live of the interest only. When the times comes, that we can go there, I’m hoping to be able to just retire and enjoy life, while I still have my health, and what little bit of mind I ever had, which wasn’t much to begin with actually, just would like to be able to find a good hobby or something to do, so am hoping I can bring some basic woodworking equipment with me there. So, til I try it I wont know if I can adapt to there, but I sure do think about it a lot and wish I was there right now actually.

    1. I’m loud, Bill S, I can’t sugar coat that. When I meet some new expats, I’m off like a prom dress, chatting away non-stop. I have to mentally reign myself in and shut up. And yes, unfortunately, there are some snobs around, you pick up on them rather quickly. They know everything. I don’t and I’m not ashamed to admit it.

      “Semi-Redneck,” Bill? I guess I could put myself in that category. I never married any of my first cousins.

      You will need a hobby, though. Good idea to bring some woodworking equipment along. If it wasn’t for this website, I’d go bonkers. Everyone does everything for me, practically feed me with a spoon. But you’ll need to find something to do with all of your free time.

    1. I exchanged emails with Scott B a few days ago, Garf. And now you met him in Fargo? It’s a small world, isn’t it? He’s missing out on the “Beers & Babe Tour” I’ll be doing with our mutual friend, The Tom Cat, coming up shortly.

  10. I think I can safely say Dave that you represent America very well in the Philippines.

    Just from your writing style it is obvious you have a good sense of humor and can go with the flow….for the most part. You remind me a lot of Paul that writes for Bob Martins site.

    I wish more Americans could focus on the positives of the Philippines instead of just the negatives. Anyway, keep up the good work. I love this site!

    1. Thanks, Todd, I try not to let the “Ugly American” side come through too often, but it has on occasion. I try to be respectful and love to talk to everyone. Just ask my asawa.

      But a sense of humor, albeit a twisted one, does help me to cope. Going with the flow is much easier than going against it.

      I love Paul’s stuff, Todd. Hope I can meet him sometime, he’s one funny guy. And I’m pretty sure he loves a cold one, from time to time.

      You’ll hear me rant about different issues occasionally, but rest assured, as we know, the positives of living in the Philippines far outweigh the negatives.

  11. Bill S says, “Each total deposit per bank is insured with something similar to our FDIC for a sum of 500,000ph.”. I believe it is not deposit per bank, but total per depositor. That’s how I understood it.

  12. Dave, I know this is way off topic but… Think it would be cool if you had a “guide to local fruits” or some such section. Lotsa really good exotic fruits around here like cocoa, lomboy, atis, tambis, kamansil, durian, etc… Just fruit for thought 🙂

    1. Always happy to go off topic, Rease. “…fruit for thought…” you got me on that one. Yeah, I’ll kick it around. Me, I’m a mango and Cavendish banana guy. Maybe after I’ve polished off a bottle or two of Red Horse will I attempt to eat my first durian. Interesting suggestion, though.

  13. Dave & Heidi, I guess I did get that wrong then. Read it on Mindanao Bobs, site, but guess I misunderstood it, since I thought it was 500,000 total deposits per bank, but it sounds like your saying its 500,000 total period, per depositor. Just got up a little while ago and am already wrong again, guess its going to be a normal day like any other.

    Yeah, I really like Paul’s articles also, Dave and Paul have similar writing techniques, I always get some good laughs from them both.

    Oh, I read an article by Suze Orman yesterday about CD rates here in the states. According to her, she says a 1yr cd is earning around 0.25-0.30% because of Federal Reserve policy, and says they plan on keeping it that low through at least 2015 on CD’s and savings accounts. Apparently the thinking is that if you have any money in the bank and cant make money off the ultra low interest rates here, you may as well go out and spend it to stimulate the economy. Isn’t that part of what started this whole problem in the first place, that people had no savings and were spending more than they had or could afford, when buying things, especially houses. Guess that’s why I am an architectural woodworker and not an economist.

    1. No problem, Bill S. I’m no economist either, that’s for sure. That’s why I leave our retirement funds to the experts. We were fortunate to get a great financial planner who has done very well for us since my retirement over four years ago.

      Be careful when you open any accounts here (or in the States for that matter.) I read an article yesterday about a teller at BDO in Negros Occidental who bilked elderly customers of millions of pesos. He gave his victims fake passbooks and drained their accounts.

      Doesn’t look like CD’s are going to make any one rich so an alternative like opening up a business as Todd suggested might be a good idea. My lovely asawa plans to open up a business next year when we buy our new home. Don’t know what she has in mind, but I’ll keep everyone posted if she decides to follow throw on that plan.

  14. This has probably scrolled to oblivion, but offering more data.
    1. The FDIC-like limit … Remember Cyprus. Depositors in Cyprus banks were strippied of assets to cover bank failures beyond 100K Euros. 500K php is just a bit over 10K. Have no doubts at all that if a bank is under stress, the WILL take your money.

    2. Rates don’t get low to drive people to exit savings and spend. They get low to drive franchise investment.

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