Monday, September 24, 2018

Jul 04 18, 10:10 pm

Filipinos still satisfied with anti-drug campaign

President Rodrigo Duterte’s anti-drug campaign is still satisfactory, according to the June survey of Social Weather Stations. The nationwide survey found 78 percent of Filipinos satisfied, while 13 percent is dissatisfied. The SWS net satisfaction rating for the 65...

Last week of overseas voter registration in UAE for 2019 elections

Overseas Filipino workers (OFWs) in the UAE have one week remaining to register as overseas voters for the 2019 midterm elections in the Philippines. Overseas voter registration will end on Sunday, September 30. The 2019 midterm elections will begin in the UAE on...

Death will be ‘optional’ in 27 years, experts claim

It may be hard to believe but two genetic engineers have claimed that the once inevitable death could simply be an option and this option would be available sooner than we think. In the book The Death of Death released recently, authors and genetic engineers José Luis...

Mobile transfer still cheapest way of remittance- World Bank

Cash transfer via mobile operators is still the cheapest way to send money back home, according to World Bank’s latest Remittance Prices Worldwide (RPW) report. ACTS-OFW Representative Aniceto Bertiz III said that the global average of mobile cash transfers slipped at...

Peso-dirham rate headed to Php15

by | EDITOR’S CHOICE, TOP STORIES

Investors are pulling out of the Philippines and putting their money in the US, which gives higher interest rate. Consequently, the peso depreciates against the dollar.

DUBAI: The peso-dirham exchange rate, which has continuously been moving up since last year and hovering at Ph14.60 as of press time, is headed to Ph15, UAE remittance companies told The Filipino Times, citing factors foremost of which is the US move to hike interests resulting to a struggling peso.

“It is not going to happen overnight…hindi ganuon kabilis (not that fast); maybe early next year if not by the end of this year,” said Edwin Punzalan, Banco de Oro assistant vice president for remittance in the UAE, whose pronouncements in May that the rate will be around Php14.40 to Php14.70 in the next two to three months hit its mark.

“Pwedeng mag-Ph15. It’s highly likely… hindi naman biglaan (not sudden),” said Mo Purple Juachon, Al Rostamani Exchange senior relationship officer.

For his part, Matthew Boast, chief business officer at Wall Street Exchange, said they “expect to see some weakness in the peso in the coming weeks and months,” “However,” he added, “the next significant threshold of Ph14.70 (USD 54) may take some time, maybe until the end of the year.”

The dirham is tied to the dollar. Peso-dollar rate is currently pegged at Ph53.41.

Boast said it all depends on how the Philippine Central Bank reacts to the increased US Federal Reserves interest rate when it convenes on Aug. 9.

“If they take aggressive action, then the picture may change. With this in mind, the current rate still represents great value for home remittances,” Boast said.

Matthew Boast

The Federal Reserve raised the target range for the federal funds rate by a quarter of a percentage point to a range of between 1.75 percent and 2 percent during its June meeting, said Trading Economics, an online platform providing economic data of some 196 countries.

It added that policymakers have projected two additional hikes by the end of this year.

So, what does the peso have to do with an increase in Feds rate?

Punzalan explained: “Foreign short-term investors pull out of the Philippines and put their money in the US where it will exponentially grow in just a matter of months due to the high interest rate.”

Consequently, he said, “The peso (and other currencies) depreciates against the dollar (which is precisely made stronger by the increased Feds rate).”

This, in turn, depresses the market, Punzalan said.

Another factor, cited by Juachon, is that aside from investors taking their dollars out, the Philippines itself is draining its dollars paying for imports on materials needed for its “Build, Build, Build” infrastructure program.

“Dere-deretso ang import ng Pilipinas. Mas malaki ang lumalabas na dollars pambayad sa imports. Hindi kaya i-sustain ng OFW remittances yung expenses,” Juachon said. (Importation is in full gear back in the Philippines. The amount of dollar being spent on the imports is bigger than that coming in through OFW remittances.)

According to the Philippine Statistics Authority (PSA), the country spent $8.7 billion in April this year for its imports, a figure that was a 22.2 percent year-on-year increase. Remittances, on the other hand, was at $9.3 billion, also according to PSA.

Juachon also said the Philippines has actually yet to secure the soft loans pledged by China, amounting to $7.34 billion. “Agreements pa lang. wala pang finalized,” he said.

Mo Purple C. Juachon

Depreciation

Still another factor pointing to a Php15 exchange rate to the dirham are the Philippine economic indicators itself.

According to the World Bank, the Philippine economy is “projected to continue on its expansionary path and grow at an annual rate of 6.7 percent in 2018 and 2019.” But, it said, “inflationary pressure is expected to intensify in 2018 due to domestic and external factors.”

“The Philippine economy is… at risk of overheating,” The World Bank said in an April 2018 report.

This at hand, Budget Secretary Benjamin Diokno recently said the government has adjusted its inflation forecast for the year from 2 to 4 percent to 4 to 4.5 percent, citing findings by the inter-agency Development Budget Coordination Committee (DBCC) which said inflation would likely accelerate faster than earlier expected this year given the rate registered in the first five months.

Edwin Punzalan

Second worst performing currency

Signs of overheating have been apparent.

The Department of Finance (DoF) said the Philippine peso was the second worst performing currency among emerging economies in the region during the first half of 2018.

Finance Undersecretary and chief economist Gil S. Beltran has told Philippine media that as of June 28, the peso depreciated by 7.42 percent year-to-date against the US dollar.

This figure, he said, was just a hairline next to the 7.46-percent depreciation of the Indian rupee. The rupee-dollar rate was at INR 68.62 as of press time.

He also hinted that the trade war between the US and several countries among them China, Canada and the European Union, is working to the disadvantage of developing economies like the Philippines.

“The Philippine peso is moving in tandem with global currencies in the ongoing turbulence in financial markets arising from the intensifying trade war (and) the rise in US interest rates,” Philippine media quoted Beltran as saying.

Stock market woes

Exacerbating the situation are the stock market woes being experienced in the Philippines.

Bloomberg said the Philippine Stock Exchange, which it described as “the world’s worst performer this year,” fell to its lowest in April, sending shock waves as

over $20 billion was lost in market value for the country’s benchmark index since the start of the year.

The exchange rate through the years – do the math

The struggle is real, if you will, sending money home 10 years ago when the exchange rate was at Php11 to the dirhams.

For a service crew at a burger joint, for instance, making some Dh2,000 and regularly remitting Ph5,000, that would mean deducting roughly a little over Dh 450, which brings down expendable income to a few hundred dirhams if at all, considering bed space was and still is Dh900, utilities, Dh100 – and you got to eat, too!

For the next eight years, things would be almost the same as the rate stayed in the Dh11-Dh12 range.

Then voila! Mid-2017 came and the rate started inching up, reaching Php14 in August and staying in that range never to go down again to Php11.

Jobs

Editors Choice

4th Filipino Times Awards honor Pinoy achievers, preferred brands

4th Filipino Times Awards honor Pinoy achievers, preferred brands

The Filipino community has become a major contributor of the development in the UAE. With an ever-increasing purchasing power, Filipinos are now the fastest growing consumer market segment in the UAE. DUBAI: Nobody said it could get any grander, but it did! The 4th...

Duterte set to ‘speak to the nation’ today—Palace

Duterte set to ‘speak to the nation’ today—Palace

President Rodrigo Duterte will be “speaking to the nation” on Tuesday, September 11, presidential spokesperson Harry Roque announced. During a press briefing, Roque said that Duterte announced in Davao City that he would like to address the nation tomorrow around 3 in...

Another batch of OFWs from Dubai returns to Manila today

Another batch of OFWs from Dubai returns to Manila today

A total of 112 undocumented overseas Filipino workers from Dubai have returned to the Philippines on September 10. The Department of Foreign Affairs said that the fifth batch of repatriates boarded Philippine Airlines flight PR 659 and landed at the Ninoy Aquino...

Filipinos still satisfied with anti-drug campaign

President Rodrigo Duterte’s anti-drug campaign is still satisfactory, according to the June survey of Social Weather Stations. The nationwide survey found 78 percent of Filipinos satisfied, while 13 percent is dissatisfied. The SWS net satisfaction rating for the 65...

Sarah Geronimo wears AMATO Couture during Dubai concert

Philippine Popstar Royalty Sarah Geronimo donned the creations of Dubai-based fashion designer Furne One during the Dubai leg of her "This 15 Me" concert on September 20 at Dubai Duty Free Tennis Stadium. AMATO was the only Dubai-based Filipino designer to dress...

Filipino fighter Jon Chris Corton bags debut win in Brave 16

The Philippine flag is raised high once again in the international sports stage as Filipino mixed martial arts (MMA) fighter Jon Chris Corton of Philippines’ Team Lakay was hailed as the victor in a unanimous decision at the recently held Brave 16 Combat Federation in...

Death will be ‘optional’ in 27 years, experts claim

It may be hard to believe but two genetic engineers have claimed that the once inevitable death could simply be an option and this option would be available sooner than we think. In the book The Death of Death released recently, authors and genetic engineers José Luis...

Mobile transfer still cheapest way of remittance- World Bank

Cash transfer via mobile operators is still the cheapest way to send money back home, according to World Bank’s latest Remittance Prices Worldwide (RPW) report. ACTS-OFW Representative Aniceto Bertiz III said that the global average of mobile cash transfers slipped at...

Recent posts

We listed over 1,000,000 jobs from United Arab Emirates monthly.

Accomodation option available in the market.

Latest News
Subscribe to our free weekly newsletter and never miss a thing. No spam. Only hand-picked trending news.

THE FILIPINO TIMES is the biggest and most trusted Filipino newspaper in the UAE.

It has a print run of 60,000 copies and 250,000 readership per week; bolstered by 1 million visitors to its website every month. It also has an e-newsletter sent to its 250,000 subscribers every day.

The Filipino Times is FREE and has the widest targeted circulation across the 7 emirates of the UAE.

With more than 2,500 strategic distribution spots, TFT is available where the Filipinos are - at Smart Bus Shelters, Metro Stations, restaurants, supermarkets, schools, airport lounges, Emirates and Etihad Philippine-bound flights, churches, Filipino community events and many more.

THE FILIPINO TIMES. We are where the Filipinos are.

FOLLOW US

SIGN UP FOR NEWSLETTER

THE FILIPINO TIMES is the biggest and most trusted Filipino newspaper in the UAE.

It has a print run of 60,000 copies and 250,000 readership per week; bolstered by 1 million visitors to its website every month. It also has an e-newsletter sent to its 250,000 subscribers every day.

The Filipino Times is FREE and has the widest targeted circulation across the 7 emirates of the UAE.

With more than 2,500 strategic distribution spots, TFT is available where the Filipinos are - at Smart Bus Shelters, Metro Stations, restaurants, supermarkets, schools, airport lounges, Emirates and Etihad Philippine-bound flights, churches, Filipino community events and many more.

THE FILIPINO TIMES. We are where the Filipinos are.

FOLLOW US

SIGN UP FOR NEWSLETTER

© 2017 The Filipino Times. All rights reserved

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

More in EDITOR’S CHOICE, TOP STORIES
Man who tried to rape jobseeker in Dubai referred for psychological test
Published On  July 4, 2018
UAE-based Filipino wins luxury motorcycle in Dubai Duty Free draw
Published On  July 4, 2018
Reds planning to oust Duterte by October, claims AFP
Published On  July 3, 2018
Close