It probably doesn’t matter that I get paid in the Philippines with US dollars (it’s a US government pension) because I pay for everything in pesos. At least I have a choice in paying with dollars or pesos in a lot of the stores I shop at.
Even though I’m now in the United States, I still get paid in the Philippines. I have a financial allotment being deducted from my military pension being sent to a United States bank account.
I receive a fixed pension as a military retiree. I set up a dollar savings account at the Philippine National Bank (PNB) branch in Los Angeles, California before I moved to the Philippines, but I didn’t have to do it that way. I could have saved myself the trouble and set it up in the Philippines, but I had to move over $90,000 USD to the Philippines (from the sale of my house in Phoenix, Arizona) and I couldn’t think of a safer way to do it.
Over the past several years, I’ve learned about banking in the Philippines and dealing with the financial services of PNB, Western Union, UnionBank of the Philippines (UBP) and PayPal. The cornerstone of my well-being is obviously my monthly pension, which is sent to the PNB branch in New York, New York.
When I withdraw the money I need to live on, I immediately convert it to pesos at one of the foreign currency money exchanges in the city so that I can pay my utility bills. I don’t need pesos to shop at the Royal Subic store, because they accept US dollars as well as pesos, but I find it easier to manage my money that way.
The online services I work with, on an affiliate basis, all deal with US dollars. Although my PayPal account is the Philippines version, I still get paid in US dollars. I use some of that money to pay my hosting fees, but I’ve also withdrawn money and the only way I can do that is to transfer it to UBP as an expanded service, where I receive it as pesos. The exchange rate isn’t quite up to what I could get locally, but I really can’t complain as it’s extra income for me.
On the other hand, if I don’t have enough money in my PayPal account at any given time to pay what I need to pay, I can deposit pesos into UBP, charge something to PayPal and it will automatically be deducted from my account.
I have a separate Google AdSense account in my wife’s name. It gets sent to her in the Philippines through Western Union. But that’s only when I haven’t placed a hold on the payments, the status the account is in now. My wife has to be in the Philippines to receive it and she’s here with me in the United States until we both return near the end of the year.
I don’t receive any other types of payments through Western Union and these payments are in US dollars, not pesos.
I’ve been asked about taxes on more occasions that I can count. I don’t receive any money from sources in the Philippines. All of my money comes from the United States. The Philippines government gets its cut up front on my savings account interest and I have to pay a government “documentary fee” when receiving money through Western Union.
When filing my income tax, I file my taxes for the United States every year. I get paid only in US dollars every month, coming from the United States, so I don’t have to worry about the Philippines side of the tax equation.
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Hi! I just have a quick question as I'm trying to avoid PayPal's low conversion rates. I am also earning in USD through PayPal, and I'm thinking of opening a Dollar Account to withdraw my PayPal balance in USD, and then withdrawing the USD from my bank in PHP.
Is this what you do?
I don't earn anything that gets sent to PayPal anymore. And when I did, my bank account would draw from PayPal if my debit card was short a dollar or two.
Your idea is a good one. That's how I would do it. PayPal's conversion rates are horrible.
I've read somewhere else, though, that it's not possible to withdraw in USD to a local bank even if it were a Dollar account (PayPal would always convert it to PhP regardless of the currency your account is in). Might be a bit of a stretch here, but I'm thinking it might have been possible for you to withdraw in USD to your PNB dollar account because you opened it in the US?
Also, when your bank account would auto-debit from PayPal, were there any additional fees/costs?
PS. Thanks for taking the time to reply, really appreciate it. I'm just trying to look for the best solution get the most of my money without losing too much in the technicalities of banking.
You can always withdraw USD from a dollar account. Since the PayPal connection to the banks is in USD, it has to be converted to pesos for peso accounts. That's how it works with UnionBank of the Philippines, where I have PayPal attached to a peso account. When I check my PayPal balance, it's in USD.
I have my military pension direct deposited to a PNB dollar account. I withdraw in dollars. If I want pesos, I have to go through another drill. It's easier for me to take the dollars and then go to a money exchange.
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