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Suppose you want to send money overseas, which involves converting one currency to another currency at the time of transfer. In that case, you need to keep an eye on the exchange rate as it impacts how much money your recipient receives.
You want the best US dollars to Philippine Pesos exchange rate when sending money from the United States to the Philippines. The best exchange rate gives you more pesos for your dollars.
Since the value of the exchange rate between two currencies is never constant and varies depending on the supply and demand of it in the market, you want to send your money when the exchange rate is in your favor.
Setting an alert when the rate reaches the desired value and locking in on the rate can save a lot of money. Try CompareRemit's App.
By the end of this article, you will learn how to get the best US dollar to Philippine Peso exchange rate (USD to PHP).
You will need to understand a few things before you can make out if you are getting the best rates on your money transfer overseas or, in this case, USD to Philipino peso transfer. Read on to find out.
But first, let's get to know how Overseas Filipino Workers (OFWs) contribute to the Philippines' economy.
Because of their contributions to the Philippine economy through remittances, migrant workers from the Philippines, commonly known as Overseas Filipino Workers (OFWs), are revered as Bagong Bayani (modern-day heroes).
A significant portion of their foreign income is sent to their family in their home countries in the form of remittances. Remittances put money directly into the hands of the people and households in developing economies like the Philippines, rescuing millions from poverty and promoting economic growth by facilitating access to credit and enhancing access to healthcare, education, and entrepreneurship.
The Philippines is recorded as the 4th highest remittance recipient country in the world, only behind India, China, and Mexico for years in a row. It is not surprising that the Philippines is one of the top recipients of remittances in the world, given the over 10 million Filipinos who work abroad.
Remittances from OFWs are one of the country's main sources of foreign currency. Every year, remittances amount to billions of dollars, adding to a large portion of the country's gross domestic product (GDP).
According to Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, the remittance of $34.88 received in 2021 accounted for 8.9% of the country's gross domestic product (GDP).
Personal remittances, cash, or in-kind transfers between families totaled $34.88 billion in 2021, up 5.1% from $33.19 billion in 2020.
OFWs based in the United States were the leading source of remittances received in the Philippines for years. In 2021, it amounted to around 12.74 billion US dollars. But sadly, millions of dollar sent gets lost in transfer fees and bad USD to PHP exchange rates.
The USA-Philippines remittance corridor is one of the competitive marketplaces because many money transfer companies are available to provide you with better exchange rates and lower fees than conventional money transfers via banks.
Read here for the best ways to send money to the Philippines.
Now, let's get to the main topic of the article.
The process of converting one currency into another at a predetermined rate is known as foreign exchange.
The exchange rate, put simply, determines how much one currency is worth in relation to another. For instance, at the time of writing, the dollar to philippine peso rate today (USD/PHP exchange rate) is 1 USD to 55.83 PHP.
Because of supply and demand market pressures, conversion rates for virtually all currencies are constantly changing.
The exchange rate of a country is vital as it provides a window into its economic stability. It is closely watched and studied. It affects how countries trade with one another. It impacts how much money you can get when converting one currency into another.
The midpoint between the buying and selling values of any two currencies at any one time is known as the mid-market rate, sometimes referred to as the interbank exchange rate.
Banks trade currencies with one another at the mid-market rate. This is the exchange rate that you see on Google or Reuters when you type in to see the exchange rate of a currency pair.
Currency's buy and sell rates are based on the constantly changing demand and supply of the currency, which is influenced by national and international macroeconomic conditions.
Therefore, each currency pair has its unique mid-market exchange rate, which fluctuates based on various factors such as imports, exports, trade agreements, economic conditions, etc.
Although banks and money transfer services use the mid-market rate when they trade between themselves, they add a margin to the mid-market rate when offering money transfer services to customers.
The percentage difference between the mid-market rate and the rate provided to consumers is known as the exchange rate margin.
The difference in the two rates is one of the ways banks and money transfer providers make money. Even a slight difference in the rate can make a big difference when sending vast sums of money.
Banks and money transfer providers make money by offering a marked-up exchange and charging transfer fees, or a combination of the two.
Even a small rate change might have a significant impact when sending large amounts of money.
The currency conversion costs are often hidden from the customers. And they end up paying high fees without their knowledge. To entice customers, companies offer 0% fee or no commission but hide the charges in their marked-up exchange rate, exhibiting a lack of transparency in money transfer fees.
Depending on the money transfer service you choose to use and the amount of money you're sending, these exchange rate margins can range from 0.01% to 10% or more.
Start by searching Google or Reuters for the mid-market rate of the currency combination you want to use. Convert US dollars to Philippine pesos online by typing in the value with any online currency conversion tool.
Knowing the mid-market rate will make it easier to assess how fair of an exchange rate the service provider of your choice is providing. Your recipient will receive more money the closer you are to the mid-market rate.
Over time, the Peso's value has declined. One benefit of the weak PHP compared to the USD is that you can remit more pesos for your US dollars to your families in the Philippines.
The exchange rate varies widely with different money transfer service providers. This is why you should shop around to get the best deal on your transfer.
Many money transfer providers offer promotional rates on your first transfer with them, along with reduced fees.
When you sign up with these transfer companies to send money overseas, they will display the offered exchange rate to you after you've entered all the necessary information to make the transfer.
Read: Here is how to convert USD to PHP on PayPal
You can also lock in the desired rate for a limited time with some of the transfer companies. This way, you can send your money using your locked-in even if the market's actual rate changes.
Some companies, such as Wise, Instarem, et., offer the mid-market rate for your international money transfers.
The majority of transfer providers include price estimators on their websites that let you double-check an estimate before sending it. The best option is to select a provider that is transparent about its costs.
CompareRemit, a leading online marketplace for remittance service providers, allows you to compare exchange rates given by multiple money transfer services in real-time with a single press of a button on their online comparison tool.
You just need to enter the sending and the receiving country and how much you want to send. You will be able to compare transfer fees, speed, and amount receivable and read verified reviews of the top money transfer companies. This way, you can choose the best option for your transfers.
It is accessible in a few countries, like the U.S., Canada, the United Kingdom, and Australia, where there are significant outflows of remittances.
You can download the CompareRemit App from the Google Play Store or the App Store. Or simply search for "CompareRemit App" online.
CompareRemit Mobile App lets you:
Once you've compared all the remittance providers at your fingertips, you can seamlessly switch from the CompareRemit app to the money transfer app (of their partnered companies) of your choice to initiate your transfer.
The app provides all the tools and data required to send money abroad at the most advantageous exchange rates. Get the best rates and fees on your transfer by signing up and quickly comparing your options on your phone.
You can customize your homepage only to display your preferred transfer corridors or currencies.
So, comparing service providers is highly recommended.
To sign up for CompareRemit App, follow the steps below:
If you want to save money on your money transfers by comparing top money transfer companies, CompareRemit's comparison engine is the way to go.
Use CompareRemit to find today's best US dollar to Philippine peso exchange rate!
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