Most Overseas Filipino Workers, if not all, send money to the Philippines. The dollar to peso exchange rate is a serious concern now. The peso has gained against the US dollar. Or the dollar has become "cheaper".
This means that the fixed dollar remittance has now lesser peso value. Or to maintain the peso value of the money, OFWs have to send more dollars. The fixed remittance gives recipients less money to spend. Extra dollars mean OFWs need to sacrifice some things in order to send more.
And that affects the peso dollar exchange rate. Money transfers from Filipinos abroad contribute to the strong peso. The more dollars coming in, the lower becomes the value of the dollar. And this starts on the last quarter of the year for Christmas until after the New Year.
Reactions to the peso-dollar exchange rate
OFWs reacted strongly against the strong peso. Some proposed that they cut their remittances in half. They wanted to dramatize their protest to the government and show that the economy partly depends on the dollars they send.
Some wanted special rate - a premium on top of the current exchange rate or a fixed peso-dollar exchange rate. They said the government set aside a fund to help exporters, so why couldn't it be done for OFWs?
The Senate ordered a probe on the peso appreciation and former labor secretary Patricia Sto. Tomas and now DBP chairman proposed to create a special exchange rate for OFW remittances over a specific period.
These measures aim at helping the OFWs and their families cope with the rising peso. However, the peso dollar exchange rate is one that runs its course. As long as there are more dollars coming in without a corresponding demand for dollars, the peso tends to rise in value.
What can be done?
What if the more than 8 million OFWs and Overseas Filipinos cut their remittances in half? The supply of dollars coming in will be limited. That would greatly affect the peso dollar conversion rate. And the families here will suffer also. But that was thinking allowed.
But in the Philippines, the peso dollar exchange rate at its low dollar value can get good investments for dollar instruments. You buy or invest in something when the price is low. The investment return is entirely yours, as well as the risk.
If an OFW supports 3 dependents back home, more than 24 million depends on the dollar remittances. And it is your decision what to do with your money. And I guess the current dollar to peso exchange rate will help you decide.
Please click here for the current peso dollar conversion rate courtesy of XE.com Currency Rate Monitor. Choose USD United States Dollars first, then PHP Philippine Pesos, then click the button to get the peso dollar exchange rate.
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