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Exchange rates and the Corona

Discussion in 'Expat Section' started by ChMacQueen, Mar 16, 2020.

  1. ChMacQueen

    ChMacQueen DI Forum Patron Highly Rated Poster Showcase Reviewer Veteran Army

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    Just to start a discussion and get people's thoughts as well as inform. Currency markets won't / can't be frozen due to the virus first off.

    Now with this topic in mind what I think will happen is the Philippines with the economic hit they are taking much self inflicted do to poor decisions w/o thinking of the Philippines economy I'm thinking the Peso will get hit very hard. I'm thinking within next couple days we may see the USD-PHP change to 1-54/55 range and the Philippine government this time can't prop it up. If this happens it will seriously hurt the Philippine economy but also create a golden time for us expats here to buy in cashing in USD to PHP if it reaches near 55. I don't think this will last long though if it does happen because its negative effects will start being felt swiftly and the Philippines may loosen restrictions somewhat to try and balance it out.

    Just my thoughts. Happy to hear other thoughts and predictions.
     
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  2. SkipJack

    SkipJack DI Member

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    I don't know.
    I agree with you in that any currency fluctuation will not last long.

    On the other hand I do not think the decisions made by the government were poor relative to the decisions of other countries. The Philippines just followed along with everyone else. Papua New Guinea is the only country that I know of that chose a different path by locking foreigners out early. Not a surprise that there are no infections in PNG.

    The number of cases per capita is still lower in the Philippines than in the USA.

    Because the Philippines followed along with everyone else they will suffer the consequences together and their relative currencies will not fluctuate much when compared to each other.
     
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  3. Happy Camper

    Happy Camper DI Forum Adept Showcase Reviewer

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    A lower Peso does not equate to a bad economy. All of those remittances will still be coming in and the recipients will now have more money to spend and purchase with. That is if the items are in stock or the establishments remain open.
     
  4. Notmyrealname

    Notmyrealname DI Forum Patron Highly Rated Poster Showcase Reviewer

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    The British Pound has been falling fast against the peso - from 66.8 a week ago to 62.6 yesterday, now increased to 63.3. It is all about relative states of uncertainty in the current crisis (sometimes with other issues, such as the UK's Brexit) and how outcomes are viewed (often in a very short-term manner).
     
  5. you_have_been_removed

    you_have_been_removed DI Junior Member

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    Remittances will be way way way way down
     
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  6. OP
    OP
    ChMacQueen

    ChMacQueen DI Forum Patron Highly Rated Poster Showcase Reviewer Veteran Army

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    This point is relatively meaningless because simply the Philippines have been far less able to test people and do to people fearing the hospital as well as cost many who likely have had it and had the minor symptoms ignored it and got better as they would the common flu. Look in the Philippines though and you see a major lack of testing except in severe cases or potential connected cases. I don't believe that we can really trust the real *per capita* is correct yet.

    I said it took multiple factors. A rate a bit high does some damage but the real damage is done with the loss of foreign money coming in from tourist, expats who fled early on (yes, quite a few did), as well as OFWs who are going to be panicking themselves and find it more difficult to send as much as before not to mention OFWs likely to lose their jobs do to business closures or slowdowns due to this. Then also the locals who have OFWs or make money off expats or tourists will be less inclined to spend their money in growth or startups only buying that which is really necessary.

    In the end I could be wrong, we'll have to see within next few weeks and even couple of months depending how long they keep these lockdowns going.
     
  7. Jens K

    Jens K DI Forum Adept

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    Euro went up nicely the last few weeks, reaching PHP 58 today. I won't complain.

    I also think remittances from OFW will go down (many work in affected industries like food/services restaurants etc or tourism (cruise ships...).
     
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