When it comes to foreign currency exchange rates in the Philippines, the main thing I’m concerned about is how many Philippine pesos I can get for a single United States dollar. The other thing I’m concerned about is which place will give me the best exchange rate. 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, but I rarely have anything other than dollars to exchange.
The reason the exchange rates fluctuate all the time is because money (in my case, United States dollars and Philippine pesos) is traded on the open market (the stock exchanges) as a commodity just like any other commodity. I honestly don’t know how it all works and I’m not in the market (pun not intended) to find out.
It’s obvious the foreign currency exchange services are involved in trading or they wouldn’t be making any money providing those services. As far as I’m concerned, I’d be happy if the exchange rate would simply stabilize at one rate for a few months so that 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 US military departed in 1992. Nowadays, 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 centavos) than what the stock exchanges are showing it as 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 because I go there so regularly.
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 fee (and I don’t remember what it’s called). 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 in dollars or pesos.
Some of the online remittance services, like Xoom and RemitHome, 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 and it’s so much easier to get in and out of the Western Union offices. Of course, I hear that getting in out of Banco de Oro (BDO) is pretty easy. BDO seems to be opening branches all over the place and they already have a branch 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 Philippine National Bank branch in downtown Olongapo once a month and it’s usually very crowded. Sometimes I let them change my money to pesos, but not very often. It depends on how long I expect to be waiting. Usually, I just take the dollars and stop by a money exchange before heading to the Subic Bay Freeport Zone to do my grocery shopping.
The last time my wife joined me for shopping at the Royal Subic store, we both noticed the exchange rate is better there (when paying the cashier) than it is anywhere else. I’ll be paying with dollars from now on and what’s left over when I leave is what I’ll be changing to pesos at a money exchange.
By: RT Cunningham
January 22, 2014
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