In 2022, the value of the Philippine peso has significantly depreciated due to various factors including the high US Dollar value, rise in global oil prices, and possible further hikes in key rates of the Bangko Sentral ng Pilipinas.
By early October, the peso measured below PHP 59 per $1, almost matching the record low from September 2022. This raised concerns about the future of the country’s economy, with sky-high inflation and the rising cost of goods and services Filipinos are facing.
A weaker Peso increases inflation and disrupts the currency’s purchasing power relative to the US Dollar.
However, the weaker Peso has provided some benefits to Filipinos overseas. For those Overseas Filipino Workers (OFWs) working in countries with a high-value currency, they have the ability to get more value out of the remittances sent home – especially with Christmas around the corner.
Local Philippines economist, Joey Salceda, has projected the peso to depreciate even further before the end of the year. This means it is the time to take advantage of the lower-valued peso to maximize returns for family and loved ones.
As Filipinos adapt to the impact of the depreciating peso, it is even more important to keep a careful eye on personal finances. While OFWs are able to maximize the value of the remittances sent home with favorable foreign exchange rates, for their recipients, managing those funds by being smart with their budget is crucial.
Earl Melivo, Interim APAC Managing Director of WorldRemit shared the below tips to help Filipinos manage finances amidst today’s economic headwinds.
1. Spend wisely and support local
With the increasing cost of importation, local consumers can strengthen the demand for local products. The Philippines has many positive stories of locally-made, high-quality products. If consumers make the conscious decision to support local instead of buying items from overseas, there is a higher chance for prices to decrease and become more competitive.
With consumer prices rising and having a limited budget, being disciplined in expenses will certainly make finances sustainably viable for any family.
2. Plan ahead
Next, prepare extra funds for expenses, as well as to save whenever possible. Staying ready for price hikes will help families maintain their lifestyles despite the uncertainty of the economy. On top of that, allotting a portion of one’s monthly earnings for emergency funds will be helpful should more dire, unexpected situations arise.
3. Use trusted digital financial services
Lastly, consumers can utilize trusted digital financial service providers in order to keep track of and reach their financial goals. Leading players in the industry provide users with convenience and different opportunities to protect their money and savings.
WorldRemit, for example, offers fast and safe money transfers online at a low cost and with very competitive exchange rates. Through this, they provide more value to OFWs’ income and grow their spending capability for basic expenses.