We have $100, you have P5,852

By Alex P. Vidal

“Never spend your money before you have earned it.” — Thomas Jefferson

RIGHT now, if you have P5,852.75, it is equivalent to US$100.

If we intend to send P2,926 to our loved ones in the Philippines, we remit $50 or $60 (the additional $10 is for wire transfer fee).

Yes, the Philippine pesos is “weak” once again as we end the year 2025.

Filipinos abroad are expected to send money in the Philippines starting November for the entire Yuletide season in December until New Year 2026.

The reason Philippine peso is weak today is probably due to a combination of political uncertainty stemming from government corruption allegations (notably the flood control project scams), a recent cabinet reshuffle, and expectations of further interest rate cuts by the central bank to support economic growth.

These factors may have negatively impacted investor sentiment, causing foreign investors to pull back from the stock market and putting downward pressure on the currency.

Investigations into alleged graft in DPWH flood infrastructure projects may have led to a broad exit by foreign investors and a decline in business confidence.

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A recent shake-up in government leadership, including the Department of Finance, has reportedly created uncertainty about potential new policies and the overall stability of the economic leadership structure.

The central bank may continue to cut interest rates to cushion the economy from the fallout of the corruption scandal, which can make the peso less attractive to investors compared to currencies with higher returns.

Also, expectations of slower growth have weakened investor confidence and contributed to the peso’s decline. Trade deficits, interest rate differentials, and other factors also reinforce the peso’s weakness.

The combination of political uncertainty and concerns over economic growth may have led to a negative market sentiment, with foreign investors pulling money out of the stock market.

Political risks and instability may have led also to weak confidence, keeping trading volumes subdued.

It is always beneficial to send US dollars to the Philippines when the dollar-to-peso exchange rate is high because the money will be converted into more pesos, which increases the financial assistance received by the family.

A high exchange rate means one US dollar buys a greater number of Philippine pesos, making the remittance more valuable in the Philippines.

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When the rate is high, say 1=58 pesos instead of 57, the recipient gets more pesos for each dollar we send. And for those who rely on remittances for daily expenses, this can mean they have more money to spend on needs like food, education, and healthcare.

We have to consider this: “High rate” for sending dollars means the dollar has a high value relative to the peso. If the peso is strengthening and the rate is lower (e.g.,1=57 pesos), it is less beneficial for the sender.

Exchange rates fluctuate, so it’s a good practice to monitor them to time we transfer for the most favorable rate.

Different services have different fees and exchange rate markups. Compare transfer services to find the one that offers the best rate and lowest fees after all charges are factored in.

We always consider the transfer fees and exchange rate costs in advance, as these can significantly impact the final amount received.

Under the news system, we can send money online through apps or websites, and recipients can receive funds digitally to a mobile wallet or bank account, or via cash pickup locations, often without a bank account.

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Digital transfer options can be very fast, with some services offering same-day or even instant transfers once funds are received.

Many online transfer services and fintech apps offer competitive exchange rates and lower fees than traditional banks, allowing more of your money to reach the recipient.

We learned that the Philippine government does not impose taxes on personal money transfers from overseas.

Digital platforms provide security features and allow us to track the status of our transfer online.

Recipients have multiple options for receiving money, including direct bank deposit, cash pickup, and mobile wallet, allowing them to choose what is most convenient for them.

(The author, who is now based in New York City, used to be the editor-in-chief of two leading daily newspapers in Iloilo, Philippines.—Ed)