Peso Rises After SONA
Right after the State of the Nation Address by the new Philippine President, the peso went up a few centavos. Articles around the web indicated that investors within the Philippines were pleased with what they heard in the speech. I’m not sure why. It didn’t seem all that promising to me but I’m new to watching Philippine politics. I think it takes more than two years as a casual observer to understand something as complex as politics in the Philippines. I don’t think the Peso went up, I think the dollar is taking a dive!
In the last week or so, the dollar has fallen from around 46.5 pesos to around 45.0 peso. That’s starting to sting. If an expat ears a pension of $1500 a month he just took around a $50 hit. Doesn’t seem like much but after two years in the Philippines, fifty dollars is a lot of money to me. Not that it every wasn’t a significant amount. Maybe because when I was a teenager I earned $25 a day.
I’ve been missing the days when the peso was near 50Php per 1USD. I certainly do not want to see a return to 1 US dollar bringing 39 Philippine Peso.
I don’t know if it is the peso rising or the dollar falling. Some bad economic reports are coming out of the USA. Bad enough that we could be headed for a second recession. If that happens, you might just be able to stick a fork in President Obama, rightly or wrongly, he’ll have a hard time recovering from that!
I don’t know what could be done to help. We already spent too much in the USA. The interest rate is near zero already, hard to cut zero. Tax cuts could help but is it the smart thing to do? Might have no choice but to run the deficit up even more. I don’t know what the deficit is in relation to GNP and that’s really all that matters. Raw numbers mean squat. A one trillion dollar deficit in a two trillion dollar economy, now that means something. I just picked those numbers out of the air. If half of our economy was based on the government spending more than it had, we’d be broke beyond belief.
Deficits generally make the dollar weaker but a depression will be worse. Far worse I hope the thing we don’t learn from the last recession is that if you are too aggressive in fighting it, there will be no way to further stimulate if there is a second wave of bad economic conditions.
I just took a look at Google Finance and the dollar appears to be down against most currencies. Looking at one day though, means very little. I took this snapshot of the dollar to Peso and Euro for the last 30 days and its ugly.
USD vs Philippine Peso and USD for Last 30 Days
You can visit Google Finance and play with the charts yourself. You can also click to enlarge this graph.
This next graph shows that the dollar is still up for the year against the Euro but when compared to the Philippine Peso, it is down a little at the moment. Since the dollar is falling against the other currencies, that doesn’t mean the Peso is improving, to know that, you’d have to compare it to other currencies. It also shows that the Php is much more stable in value in relation to the dollar over the last year.
Dollar Vs the Philippine Peso and Euro so far this year.
I often hear expats say the Philippines sets the value at whatever they want and tell us what it will be. This limited information disputes that. It might indicate that the value of the Peso is very dependent on the value of the dollar. It doesn’t mean that, its not enough data but it might be worth looking into.
Please dollar go back up!
Tagged with: Expat Finances • Philippine Peso
Filed under: Expat Finances
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Hi Rusty,
I am watching the tumbling value of the dollar against the peso. A year and half ago when I was in the Philippines, the exchange from the bank was $1 to Peso: 48. Two years before that was $1 to Peso:54. I’m responding to you from the U.S.
We are hard up over here. I am a University professor and privy to student placements after graduation. My students have to compete fiercely with other universities and many have to settle with jobs that they really don’t want. Many of the students have student loans to pay back and must have jobs. Americans are angry. Medicare expenses have been cut back, but President Obama expanded entitlements for welfare programs instead. Women are actually making a living here, having babies out of wedlock they cannot afford.
By the way, several years ago, you wrote about writer’s block. I believe that you are one of the writers that don’t hold back. How about an article which addresses expat retirees who are starting families again after the age of 65 in the Philppines? With the tumbling value of the dollar and the Euro (and other European currencies), I don’t think that their pension of somewhere around $1,000.00 is going to support their large families in addition to their extended ones. The cost of the medicine in the Philippines is almost, if not the same, as over her in the U.S. These expats will find themselves buying medicines and medical services very shortly. Because of my parents who retired in the Philippines (to cut down on homecare costs), I am fully aware of the costs of the medical expenses and medicines.
An expat on SS alone is making less than $1000.
I’m amused that you think I don’t hold back. I do. LOL Could you imagine if I didn’t. I have to be. I’m a visitor here and I cannot say everything I like. I still worry about one article I wrote when I expressed outrage over the PDEA or its the Philippines equivalent to the USA DEA, not sure I have that acronym correct. I think I do. Anyway, their director admitted they plant drugs on suspect I read that shortly after I got here and it was an eye opener for me. Jessie thought its fine. They do it in a proper way. I just come from a place where I can’t think that way. Many Americans did before Watergate, far viewer have since.
Then I read how foreigners are not allowed to express their political feelings so I went back and took a lot out. You see, I also saw that people from the Philippines government had been to my site and were looking at that article. I guess I didn’t get too out of line or I would be gone!
As for expat lifestyles. I wish they’d leave the little girls alone. Other than that, I’m not one to judge the lifestyles of others.
Medication here cost substantially less if you can get a generic. If you can’t, it may very well cost as much. My medication cost before I came here was between $1000 to $1500 a month. Now its $200 a month. I have found the cost to be quite less but sometimes I can’t get the medication I would like too. I have a gel for my skin that I would like to get and really do need. It cost over $200 for a tube. what I get here instead doesn’t really help me, its a cream. The delivery system of that medication was everything and now my face falls off. (just my way of saying it) I get sores from no where. I think I have scleroderma on top of lupus but its not confirmed.
A hospital room here is $50 for a private aircon, actually less at the best hospital in Cebu. That’s less than my deductible but in a way its more expensive as they can’t do the test I need here unless I’m in the hospital. So, I’ve not had them done. I’m going to try to do it next month, if I can get some things worked out with BI. Just a minor problem I think. If not, then I have to leave the country for three days and that will destroy my budget and I wont be able to get those test done.
Living here cost less. An expat can have a better life here than they can in the USA IF they can handle the cultural difference. Sitting around at the expat hangout in the hot sun drinking San Miguel all day is not my idea of a better life. Perhaps that’s why they sit around and complain. They need to make the change. Those people are just going to complain though, no matter where they are in life.
My quality of life is much higher here. My standard of living is probably down a little but the things i gave up have been more than made up for by the quality of life in other ways.
As for welfare and people making money off it. That’s been going on since Obama was a little boy. Nothing new there, he couldn’t have made that happen in less than 2 years.
When I graduated, Regan was in office and it was the worst job market since the great depression and that is true even now. If both Bush and Obama had not stepped in with those government spending plans your students wouldn’t be able to get a job at all..
My daughter just graduated from med school ( not a doctor) and went for one interview and got the job. Geesh, how lucky? She must be awful good at interviews.
Of course she’s brilliant. Look at who her dad is, a freaking genius. LOL (Jessie will roll her eyes when she sees that)
On the dollar. P45 to 1 is more historically normal. P55 was the highest I saw about the time you spoke of. It was before got here. I would love to see it back up there.
I don’t want to see it up there on the back of Filipino suffering though.
A recession in the USA will actually cause the value of a dollar to go up, GENERALLY. Not always. When there is less money being spent, there is less “velocity” of money and that means few dollars and higher value. I personally would have been better off if Obama and Bush did nothing and just let things play out but I don’t want that. Its not ALL about me, just mostly about me. LOL
The dollar has levelled off a bit now. I don’t know though, I think it could fall again. When i first got here the dollar was as low as P39 to 1. When it went back up to P50 to 1 I was doing rather well.
One problem with expat lifestyle is for many of us, our wealth is dependant on the exchange rate. Or our spending power would probably be a better description. I don’t really have wealth.
Most of the expats that I come into contact here are wealthy. Few life off their pensions alone. Most have cash in the bank and they make money with money. i didn’t make better choices when I was younger, I thought retirement was a million miles away.
Hi Rusty,
Thanks a bunch for the insightful exchange. I didn’t know that you can’t air out political views. I’m used to the American way of life with freedom of the press. Regarding jobs and student loans, I remind my students that they are the lucky ones in the world. Many would take their place at the bat of an eye. Congratulations on the graduation of your daughter. I’m sure that she is brilliant. If you don’t claim her, who else would? Navigating through college can be a maze. Indeed, if an individual graduates from college, they get the approval stamp of USDA.
A college education is a great thing to have. These days, its required for even starting position at most places.
My daughter was accepted into med school in her third year so she never got her bachelor degree. That caused me a great deal of concern but she’s very determined and like me, does it her own way.
She is a vocational reheab professional. Certified and ready to go. She will be working with brain injuries getting them back on the path to working if possible.
She seems to be off to a great start but yes a bunch of student loans. They paid her living expenses while in college too so I’m sure she doesn’t even want to think about how much she owes.
She’ll be 25 in a few weeks When I was 25 I was married and had a five year old. i’m glad she didn’t do that.
Yes, it is hard on us American’s to keep our mouth shut.
The Philippines has a civil war going on. Its limited to a small area, for the most part. Al-Qaeda is here too or at least groups with ties to them. The Philippine Armed Forces have put the hammer to them in the last year but there are still problems down south. When they are not fighting with the Philippines they fight with each other.
So with that, one can understand why they don’t want nor can they really tolerate outsiders coming into their country and protesting. Its not just the Muslim groups but also the communist groups. The communist groups mostly attack government office like police stations and less likely to target civilians than the Muslim rebels that tend to attack softer targets. Samar is an area where the communist are more active, the NPA, New Peoples Army but they can be found any place in the Philippines, especially rural areas.
For most of us, it is not an issue, the terror groups and such. There are areas where one knows it best not to go. Getting frisked when entering a mall was hard for me to swallow the first time. I’m glad they do it though.
I enjoy talking with you too.
Just don’t be too hard on me for my poor grammar 
You may know of Millsaps College. I nearly flunked out of there because of it and I’ve forgotten all my tense rules sense then and a computer can’t check me for using the wrong form of a word which I’m horrible about. I hate it when I do that because I know better….. I’m not good with details 
Hi Rusty,
Use of correct grammar is no longer that important to me. After 4 degrees, culminating with a Ph.D., teaching college/university level for 24 years, I’m just content to deal with everyday living. After my mother’s car accident two years ago (which resulted in her death in Cebu) and my father passing two weeks after (he was ill and deeply grieved my mother’s death), I decided to stop chasing shadows and smell the roses. They were married for 62 years (first and only marriages for both of them). I appreciate your articles as I am considering retiring in Cebu when my time comes. My Anglo-American husband of 30 years has never been in the Philippines, so I am interested in expat views. I hope that when we retire the dollar will be in an upswing again.
The dollar is going to go up and down. I’d be happy if it will just stay at 45. I’d rather see 55 but that’s not the normal exchange rate.
Anything to do with labor and land / housing cost is where people save the most. I’m sure you’ll be okay here, financially, you’ll be better off. Your husband will have some adjustments to make. Get him a hot water heater, he wont be use to that. At least a small one in the bathroom.
They’re are a few places with centralized hot water but pretty rare to find that.
Sorry about your Mom and then your dad. Yeah, not surprising he left soon too. I don’t think I’d want to stick around after being with someone for 62 years. That has to be one devastating thing to deal with. I’m sorry you lost them so close together. Had to be hard for you.
I worry about my grammar. I’ve always had the ability to put emotion on paper, I actually hold back a lot now, compared to my younger days as it got me into a LOT of trouble. One can keep a thought private but once on paper or computer screen, its there for others. I think I will find some tutorials and at least brush up on my past perfect and future and present tense. I’ve forgot all that and a pronoun? Hah, totally forgot and something we are not suppose to dangle. I forgot that too or even what is it.. Was it a pronoun we are not suppose to dangle?
After the eight grade, they just stopped teaching grammar, it was all literature. I was quite good with grammar in the 8th grade.
But, you are right about the roses and what is important. Life, over time teaches us that in what is usually a very painful way. My favorite part of this is though, the older I get, the less i know. The less I know, the wiser I become..
Dang the dollar is down to 43.9 today. That means I’d get 42 something.. Not good. Is it going back to below 40? I’m worried!
I am classified as a walking quad, got a filipina wife, i am stuck in the states she is in bohol, haven’t seen each other in 18 months….
Boy do i need the peso to stop falling, i send 17,000 each month to philippines. I made it ok for this month, Sept, with the xoom exchange rate 44.4069 ($382.90). as of sept 11 its at 43.1627 ($393.86) thats a $10.96 increase that might not seam like much but for me it is the difference of going from eating peanut butter and jelly sandwiches to eating eating peanut butter sandwiches. If if drops any lower by Oct, and depending how low, i will either be eating just peanut butter or just bread… I AM SERIOUS!!!!
Have enough concerns about getting my medical supplies and medications in the philippines, without having to deal with the dollar drop….
Hi Moving,
when it went from 39 to 49 I sure saw an increase in my fun money.
right now, there is no fun money
39 was very hard.
Hope you can get here soon. I know its hard!
I started working for a corporation on a contractual basis in the Philippines back in 2007. I had the choice of getting paid in dollars or Philippine peso. I chose the dollar, which was equivalent to 48 pesos back then. With each new contract, I get a 15% increase. My dilemma now is that the dollar is down to 43.62. I read somewhere that Barclays predicted the peso would be down to 40 within a year. I’m trying to decide if I should change my contract to reflect payment in pesos now before it gets to 40. I’m a little concerned that although I can get a 15% increase for my next contract, the weakening of the dollar would only mean I’d really just be getting about a 7% increase. Most of my expenses, of course, are in pesos, but I’m trying to save so I can move back to the U.S. with my son in 2 years. At this point, the seemingly obvious thing to do is to reflect peso payments in my contract. My concern is WHAT IF the dollar gets stronger/peso gets weaker???
Hi Ember,
If there is a lot of money involved, its good to have both a peso and dollar account. That way if one goes down the other goes up. But you often loose money in the conversion with transaction fees so I’m not sure it is a good idea to get paid in dollars then get it all or even most back out in peso. You might know more about that than I do. I know some people say they get more if they get dollar then convert. For me, peso is the way to go.
If lots of money is involved, peso, dollar and gold is the way to go. When the dollar goes down gold USUALLY goes up.
If the dollar goes to 40, I don’t think it will stay there long. I sure hope not.