Piso, Magkano Ka?

I have realized that one of the activities that a “Bagong Bayani ng Pilipinas” tend to look forward to, aside from coming home to be with loved ones, is the foreign exchange rate for remittances to Philippines.  Five years ago, every one US dollar is equal to Php55. Now the US forex rate is just equal to Php44.  Good news or bad news?  Hmmm…

 

This is something we can view as positive because this means that our Philippine peso is getting stronger as a result of a better economy, trust on our political leaders and stronger stock market (Yey!).  However, for every overseas filipino worker abroad who sends remittance to supply the needs of his/her family in the Philippines, this is bad news.  Oh, if every OFW just know how to take advantage of the power of “hedging”! (ie: to gain from the forex loss, invest the remittance to income-generating assets).

 

I am also an OFW based on United Kingdom.  Every payday, I am always excited to check the online website where I do my remittance and checked for the current exchange rate.  For my one year stay abroad, the highest equivalent of Great Britain Pound to Philippine Peso was Php71.45 and that was just during the Royal Wedding on April 2011!  After that, one GBP averages Php68.  (Three years ago, one GBP was equivalent to Php102!)  And with the Philippine stock market going on positive territory, I checked on my bank today and found out that one GBP is now equivalent to Php66.95!  Just imagine the foreign exchange losses as a result of this forex translation! (waaaah!)

 

But this is just one side of the story if our mindset is just based on the forex remittance rate.  If every OFW learned to diversify the remittances through stock market, mutual funds, business, real estate, etc., these forex losses can be “hedged” as a result of income received from these income-generating assets.

 

 

 

Keep learning and keep moving forward!

 

Cheers,
Lyn-Lyn _(“,)/