We have talked about this often here in MoneySmarts: the pain suffered by OFWs who now can buy fewer pesos with their dollars.
As you all know, the peso broke into the 43-per-dollar level yesterday for the first time in even years. The exchange rate is now closer to the yearend forecasts of Richardson, Vero, Clipper, Reinan, Melan and the rest :-) (Check out the result of our peso forecast game here and the original challenge here)
We all know the peso will keep on climbing. This statement from the central bank, however, was very illuminating:
A stronger peso also affects OFW households that receive remittances denominated in US dollars, but OFWs in the Middle East and Asia are benefiting from the strengthening of the currencies in their host countries, Guinigundo said.
Data suggest that 51 percent of all OFW money remittances coursed through banks come from the United States, but that may not be the real situation, Guinigundo said.
He noted that most of the remittances go through banks in the US for clearing before transmittal to the Philippines and so banks in the Philippines report them as coming from the United States.
A new BSP study on money remittances notes that overseas Filipinos’ decision to send money is being influenced by exchange rate movements. It also says “remitters are influenced by investment opportunities even more so than altruistic considerations.”
Click here to read the rest of the article:
Two things: OFWs in the Middle East and Asia are benefiting from the strengthening of the currencies in their host countries, so the net effect of that along with the weakening of the dollar against the peso is…what?
Second, do OFWs really send less money home when the economy is not doing so good? What do their families eat? How do they pay their bills?
*scratching head in consternation*
I would love to get my hands on that study.
Forex-related articles in our archive:
The crazy language of forex news articles
How your peso forecasts stack up
Join the peso forecast game!
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November 28th, 2007 at 12:24 pm
do we have a legit forex trading firm in the philippines?
November 28th, 2007 at 5:16 am
If you are interested in Forex investing then I recommend also checking out http://chapter322.biz/forex-investing/
-Denise
November 12th, 2007 at 8:28 pm
sorry “there will not be too much volatility” I should say
November 12th, 2007 at 8:25 pm
don2x
aaah thats short selling pala, thats what I did last year when $=P50 I heavily borrowed expecting $ to fall P45, now I am still paying the loan with a smile hehehe…
melvin
BSP is doing a lot of counter measures and to think na nalulugi na sila just to make sure that there would be too much volatility in the Forex, hoooray to BSP… I am still hoping that we will not hit inflation of 5.1% at the end of the year although I am still sticking with $=P41.56
November 6th, 2007 at 9:36 pm
you will only be poor OFW if you always spend all your salary monthly… well you dont have to be an OFW to do that…