Currency exchanges report a big increase in transactions prompted by plummeting peso
UAE's Filipino expats cash in with best exchange rates for a decade
Filipino workers in the UAE are making the most of sinking exchange rates by pumping tens of thousands extra pesos back home each month.
Footfall in currency exchanges is noticeably up, according to staff, as workers look to make the most of the peso’s slump to an 11-year low against the dollar.
Trading on Monday saw Dh1 worth 14.15 Philippine pesos, and 51.97 against the US dollar. In June, Dh1 was valued at 13.40 PHP.
Whilst plunging rates are good news for expatriates, those at home are having to contend with worrying rates of inflation, said Wilfred Pomicpic, assistant manager at the Wall Street Exchange in Abu Dhabi.
“We have had good value for the peso for a while, but now it is the best time for workers to send their wages home for some time,” he said.
“It’s hard to predict, but I can see this rate staying like this or getting even better for us for the next six months at least.
“Although it is good for us in the UAE, it is having a negative impact for people living in the Philippines who are now paying more for their commodities.”
Competition amongst currency traders is heating up, as the battle for business reaches boiling point with plenty of outlets offering special offers on money transfers.
Although there is little movement in the actual exchange rate, some smaller traders have slashed the costs of sending cash home to attract new customers.
Some are charging just Dh15 to send money between accounts in the UAE and banks in the Philippines.
“We can’t change the rate too much to try and win business, maybe only a couple of fils, so the fees are kept low,” said Mr Pomicpic.
“It evens out as although we are sending more money home now, the cost of living is going up, so it has evened things out.
“I have brothers and sisters here also working, and we are all sending our wages back home.”
An aggressive drive towards infrastructure investment has boosted imports in the Philippines, but the fallout has seen the peso become Asia’s worst performing major currency.
Inflation in the country accelerated to 3.9 per cent in February.
The value of cash sent home from Filipinos has been steadily rising since 2008, with the country’s central bank forecasting remittances to exceed US$29 billion in 2018.
Filipino Rey Policarpia, chief teller at Al Fardan Exchange in Al Wahda Mall, Abu Dhabi said the number of transactions each week has increased gradually as the exchange rate has become more favourable.
“It is a highly competitive market to operate in,” he said.
“The exchange rate offered by each exchange depends on its location and the level of business competition in the locality.
“I’m constantly sending money back home anyway, but I’m trying to transfer as much as possible now as the rate is so good. We don’t know how long it will last for.
“This month and last month I’ve made six transactions, whereas I would usually just make one or two.”
Remittances from expatriate workers are a major funding source of foreign income in the Philippines, contributing around 10 per cent of gross domestic product.
According to the World Bank, the Philippines was the largest global remittance recipient in 2016 after India and China.
“The cost of living is increasing back home, but slowly things are getting better,” said Rosa, a Filipina domestic worker in Dubai, who sends most of her wages each month to her parents in Manila.
“Manila is becoming safer, so inflation is a small price to pay. The present government is trying to change things for the better, but it will take time.
“I go back home once a year and that was back in December.
“Most things have become less affordable, but the quality of life has improved and things are noticeably safer.”