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Ph Peso Sinks to 6-Year Low Vs. USD

Ph Peso Sinks to 6-Year Low Vs. USD

Good news for all of you American expats living in the Philippines: Ph Peso Sinks to 6-Year Low Vs. USD. Yes, dear readers, it’s time for another exchange rate rant

The peso fell to a six-year low this past Monday to close at 47.16 against the US dollar.

United States Federal Reserve chair Janet Yellen  remarks that the economy was “performing well,” and that a rate hike in December is “a live possibility” has  boosted the greenback.

The Philippine Peso has lost 5 percent since the start of 2015. Monday’s close was the peso’s weakest level since Oct. 22, 2009 when it stood at 47.195.  As I write this article on Wednesday, the peso has improved ever so slightly to 47.15.  The lowest rate thus far for the dollar this year was 44.4076  on May 15.Stack of Philippine Pesos

Past Predictions for the USD vs. PHP

I checked the archives of Philippines Plus to review the past stories I’ve posted regarding the Philippine Peso to US Dollar exchange rate. Here’s what I’ve come up with:

2011

In February 2011 I delivered this blockbuster “Wide Range of Predictions for Philippine Peso vs. USD Exchange Rate.”

There were dire predictions of an exchange rate of PHP 37.50 to $1  in 2011 and PHP 35.50 in 2012 from HSBC (Hong Kong and Shanghai Banking Corp.)  ( All Headline News.)

The fact is that on December 31st,  2011 the US Dollar closed at 43.7900, not the 37.50 to $1 rate predicted.

However, at the end  of 2012, 1 US Dollar equaled 41.03 Philippine Pesos, still better than the 35.50 prediction but the lower rate was a cause for concern.

2012

“US Dollar to Philippine Peso Exchange Update: Peso Hits 4-Yr High” was the title for a July 4, 2012 article. Frankly, it wasn’t one of my most exciting posts and I almost fell asleep reviewing it.

But the gist of the articles was that the Philippine Peso was growing stronger and had maintained the least volatility among Asian currencies. The peso posted the best appreciation against the US dollar among other Asian currencies from January to July 2 for 2012.  The currency had appreciated by as much as 4.33 percent, the highest in the region.

Several months later on September 18, 2012, I followed up with this gem: “Latest Update on Philippine Peso to US Dollar Exchange Rate Predictions.” 

The article cited a a report from Inquirer Business, which in a Sept. 17, 2012 article, reported that the DBS Group, A Singaporean financial services provider,  stated that the local currency was seen trading against the dollar at P42.60 by year’s end. The peso had posted another record 41.56 to $1 last September 11, 2012.

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.

Here’s the US Dollar to Philippine Peso 2013 exchange rate prediction that the The Bank of New York Mellon made in 2012 for the close of 2013:

Mellon’s 2013 4th Quarter Prediction?  1 USD=  40.00 PHP. The actual figures for the close of 2013 were 44.4000 PHP to 1 USD.

2013: We sink to our lowest level but rise again

On July 1, 2013, I ran this nail-biter: Philippine Peso Vs. US Dollar. Don’t ask me where I come up with this exciting titles. I’ve been called a “genius” by some expats that might have been drinking a bit too much that day.

In early June 2013 our exchange rate was 40.95 to 1, the lowest rate of exchange we have seen since moving to the Philippines over six years ago.

At the time this post was published, the rate had improved for us at 43.09 PHP to 1 USD. What happened?

Analysts say investors were dumping risky assets amid speculations the United States may withdraw its stimulus measures. American consumer confidence rose to a five-year high of 76.2 in May 2013.

Contrary to a  Bank of America prediction in 2012 that the Philippine peso could hit 30 plus-level  in 2013, the exchange rate versus US Dollar continued to weaken at the 43-to-$1 level that June. Above 43-mark is said to be the weakest since June 26, 2012 when it hit 42.47.  (source: The Summit Express.)

Along with other American expat friends, we were quite relieved when the exchange rate improved at that time. As noted above, the PHP to USD exchange rate improved to  44.4000 by the end of 2013.

2014

In 2014 I could not find a single post regarding the Philippine Peso to USD exchange rate. For the record, at the end of 2014 the rate had improved only slightly from 2013 to 44.7795 PHP.

2015

Thus far, 2015 has been our best year for the exchange rate since moving to the Philippines in July 2009. Let’s hope this trend continues because I, for one, don’t mind having a few more pesos in my pocket. How about you?

12 thoughts on “Ph Peso Sinks to 6-Year Low Vs. USD

    • Yes, Lance, unfortunately my Canadian and Australian friends living in Guimaras are not enjoying the same exchange rate. My latest figures for the Canadian dollar show an exchange rate of 35.53 to 1. The Aussies rate is even worse at 33.29 to 1. My Kiwi friends exchange rate is 30.91.

      Sorry to hear the Canadian dollar is at it’s lowest level in 14 years. My Canadian friend that took over our lease at “The Farm,” won’t be happy to hear that. I also have Aussie friends in the island who understandably are not happy with their exchange rate, either.

  1. I feel a bit for the other expats from Canada and Australia…but as an American I am quite happy with the fall of the peso to the dollar.

    I always, though, calculate my budget based on 44 or even 43 pesos to the dollar. Anything over that is just a bonus for me.

    As a tip to ANY of you guys and gals from America thinking of moving to the Philippines or having an extended stay there…DO NOT go off of the present exchange rate, no matter what that rate is.

    Always go off of an exchange rate of AT LEAST a coupe of pesos less…this way you have some cushion. If the exchange rate goes in your favor….GREAT! If it drops some you will NOT be losing money you need to live off.

    I also take the difference and save that amount. For example…if I convert 1000 dollars at 46 I get back 46,000 pesos. But my budget will have counted on 43 or 44 so I will take the difference (46,000 to 44,000) and put that away. This has always worked well for me.

    I am not an expert by any stretch but it also seems to me that many filipinos LOVE the fact that the peso falls to the American dollar as so much money from America pours into their country. When a loved one sends a $100 they now get around 46 (with the fees) and that means a a couple of hundred more for them compared to the peso being at 44. Maybe doesn’t mean much to us ($100 I mean) but to the average filipino a couple of hundred pesos means eating for a few days…or more.

    • Excellent idea, Todd, regarding budgeting for a fixed peso amount and then pocketing the savings if you get more bang for your buck if the peso falls below your fixed rate. Never thought of that before, but it’s a good plan.

      Well, you’re right, Todd, it is advantageous to many Filipinos if the peso weakens. Overseas Filipino workers around the world sent $26.92 billion (P1.20 trillion) back to the Philippines last year, up 6.2 percent from $25.35 billion (P1.13 trillion) in 2013, according to the Bangkok Sentral ng Pilipinas (BSP) (Source: Google Infographic)

      With over 11 million overseas workers supporting their loved ones back home, a stronger dollars means more pesos in their pockets. And with Christmas season in full swing here, that weaker peso will definitely help the local Christmas shopping scene.

  2. Hi Dave, it’s very important to a lot of expats the exchange rate especially if you’re
    On a tight budget or getting a pension in dollars or whatever currency you are paid in,
    I’m okay the British government can give my pension to one of the migrants that are
    Currently heading to Britain I don’t need it anyway, I think the current rate of the pound
    Is about £72 to the peso not sure on that, these days I tend to think in pesos because
    That’s the money we get paid in, only pounds I have is in the hsbc bank for a rainy day
    Or emergency, as Todd says always go of a lower exchange rates when you are calculate
    Your budget, Derek in sunny pasig.

    • I used to check the exchange rate all the time, Derek, but don’t bother with it much now. After living here for over six years now, I do tend to think more in terms of pesos than dollars. I believe you Brits are getting the best exchange rate followed by the Euro, at 50.77. I’m happy with our current exchange rate, but wouldn’t complain, of course, if the peso got even weaker. 🙂

  3. Dave,
    We cashed in $2000.00 on Tuesday when the rate hit 47.210. Anne wanted to wait until Friday, but i’m glad i talked her into to doing it Tuesday. We got 46.995 which is the highest we have ever had on any exchange.

  4. Hopefully it can stay like this til my next trip in April. Always nice to have a few extra bucks in my pocket for a few extra cold beers,hahaha…

  5. hello,
    i think us dollar will fall down like euro. I loose 20% since 2 years euro-php.
    And dollar will do the same.
    When FED will raised rates and when the world will understand that dollar is “monkey” money. (like many money). As long as your gouvernment will continue to inject billion and billion dollars every month, it can’t be better for you. and your debt is more than 100% PIB (> 16 trillions dollars) !
    how can you hope it will be same or better in the future !

    • Hi, Olivier, yes, I know that the US continues to print money which it doesn’t have and is staggering from a huge mountain of debt. Fortunately, our personal income sources are diversified and doesn’t rely solely on the USD to PHP exchange rate. Again, as noted in my article, I don’t mind have more money in my pocket if the exchange rate is favorable.

      I don’t necessarily believe that the US dollar will continue to improve but I think the Philippine Peso will continue to weaken. The dollar is at 47.18 to 1 as I write this comment and the euro is 50.60 to 1. Will this trend continue? Who knows? I’m just along for the ride. But if I had dollars to cash in for pesos, I would seriously think about cashing them in very soon.

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