In many places, they call themselves “money changers”, a simplified way of saying foreign currency exchange brokers. The money changers deal with more than United States dollars and Philippine pesos. I very rarely have anything other than dollars to exchange.
The reason the exchange rates fluctuate all the time is because money is traded on the open market as a commodity just like any other commodity. I honestly don’t know how it all works and I’m not in the market (no pun intended) to find out.
It’s obvious the foreign currency exchange services are involved in trading or they wouldn’t be making any money. As far as I’m concerned, I’d be happy if the exchange rate would simply stabilize at one rate for a few months. That way I could I know how much “effective” money I have to spend every month.
At one time, it seemed like there were money changers all over Olongapo City. That was back before the U.S. military departed in 1992. Today, there are only a few remaining. Regardless of what the money changers call the places, each one is nothing more than a foreign currency exchange brokerage.
The way they make money is that they give you a slightly lower exchange rate (usually 5 to 10 sentimos or centavos) than what the market is showing at that particular time. I don’t know the details of how it’s done. I just appreciate the result of the transaction. At one place, I usually get a better rate than any of the other places.
One thing I’ve learned over the past several years is that there are some places where you don’t want them changing dollars into pesos. A foreign currency exchange broker will usually give me a better rate than any bank.
Places that specifically receive remittances, other than banks, are usually the worst places to use. Western Union is one example. Not only does the sending party have to pay a transfer fee, the receiving party also has to pay a documentary fee.
On top of that, Western Union offers an exchange rate than can be up to one peso less than anywhere else. The trick is to have dollars sent and then exchange them. Western Union can send and receive in dollars or pesos.
Some of the online remittance services offer better transfer fees than Western Union. The only problem I have with them is that I have to visit a bank or some other place they send to. It’s so much easier to get in and out of the Western Union offices.
Of course, getting in and out of BDO is pretty easy. BDO is opening branches all over the place and they already have two branches at the Subic Bay Freeport Zone.
I would be more than interested to hear if you get money exchanged in an easier or better way than I do. I visit the BDO branch at the freeport zone once a month and let them change my money. Going to a money changer is out of my way and I’ll probably spend the difference in gas.
One time when my wife (Josie) went shopping with me at the Royal Subic store, we both noticed the exchange rate was better there than anywhere else. Unfortunately, dollars can only be exchanged when paying the cashier. We can pay in dollars or pesos and we usually get the change back in pesos.
Originally published in January of 2014. Updated for readability.