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Currency Exchange ₱ ⮀ $ | Do I Unload My Dollars and Convert To Peso?

g_func2002g_func2002 PExer
edited March 2019 in Banking and Finance
Hi Kuya Danny,

Happy New Year!!!

Just want to get your views on the further appreciation of the peso as hinted by BSP today and whether i should convert all my dollar investments to avoid additional unrealized loss and place them on peso investment (MF / UITF)?

However, converting them would mean that realize all the loss.

Thanks.
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Comments

  • May I pitch in, sir KD?:)

    Personally, I would keep half of my dollar investments and then re-invest the other half on peso funds.

    I have this gut-feeling that the peso will depreciate again sometime this year, to maybe at least Php42.
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    Sorry, I did not realize earlier that the question was directed at me.

    I will be revealing my age when I say this, but you will be hard pressed to find somebody who has lived through the Marcos era who today does not keep at least part of his wealth in dollars. You will find quite a few of them who not only keep wealth in dollars, but also out of the country. But that is another conversation altogether.

    I have seen the exchange rate fall from P4.00 to P57.00 or so in my lifetime, so my time horizon is different from yours. I started accumulating dollars at P21.00, so compared to today's rate of about P40.50 I am still ahead, right?

    My point is that you have to define some time horizon before you make a decision to exchange currencies. In the short term, for example, if I had $5,000 today which I needed to exchange for pesos because I have to make big payment in October, I would sell now rather than in October. But if I had that same $5,000 and don't really know what to do with the pesos, I would keep the dollars and invest.

    Like burndvinyard above, I would keep part of my money in USD, not just for now but maybe always, because I will always have a need to spend dollars, and I prefer not to scramble to buy foreign currency at as needed, when the timing may not be right.
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    Sorry to complicate things some more for you, but consider the possibility of exchanging your USD for other currencies, such as AUD, SGD, or even EUR, which are also appreciating against USD. It's easier to get into these currencies from USD, which you already have, than from pesos.
  • MarionRiveroMarionRivero PEx Influencer ⭐⭐⭐
    I have been mulling over this for some weeks now and I'm glad someone created a thread on this. More inputs will be of big help.

    I just termed one $MMF and will diversify it into $ and peso UITFs. Am maintaining two other $MMFs. Also just split a peso TD into a peso balanced fund and an equity placement. Want to be more aggressive with my investments this year. :)
  • KuyaDanny wrote: »
    Sorry to complicate things some more for you, but consider the possibility of exchanging your USD for other currencies, such as AUD, SGD, or even EUR, which are also appreciating against USD. It's easier to get into these currencies from USD, which you already have, than from pesos.

    totoo ang sinabi ni Kuya danny. nasa forex ako ngayon, more on SGD/AUD ang nilalaro ko. if I were you, better change your USD to other currencies na competitive.
    about naman sa question mo na kung ipapalit mo na ang dollars mo sa pesos, mag-antay ka muna.
    BSP is actually buying dollars to stop the emerging pesos.
  • America or the US Dollar is not the same currency as it was on Bretton Woods. Then the gold backing was taken out by Nixon in the early 70s. Without the petrodollar, the US Dollar would have collapsed a long time ago. The wars in Iraq and Libya and taking down the dictators who wanted to trade their oil other than US Dollar is one of the ways America protect its worthless currency.

    Using history as a guide, there is NO single country in the world who did not succumbed to hyperinflation who did what the US is doing now with their currency. Quantitative easing is just a nice word for continual massive printing to save the big banks. They will risk destruction of the US Dollar to pay off debts. The idea of the thrillion dollar platinum coin is a joke to those holding US Treasuries. The biggest bubble now is the American bonds. A collapse of the US Dollar is a collapse of the debt markets. They go hand-in-hand.

    The decline of the US Dollar, hopefully will be halted at a price level instead of hyperinflating away to nothing, is a huge risk, I am a trader of US markets and going flat or in US Dollars is now a position and a very dangerous one.

    It will not be a straight line down but the dollar rise against the peso is an opportunity to get rid of dollars instead of staying with a fundamentally flawed currency or worse, to buy more!

    The world is changing and the economic, financial and monetary leaderships will also change. A change like this is very volatile and enough to shake up people. I am still US Dollar based in my trading but we are continually moving assets away from the USA. The Philippine Peso with the strength of Philippine banks is a BETTER currency than the US Dollar backed by the irresponsible feds who will do all to save the insolvent member banks including destruction of its currency which consequently also destroys US debts.
  • vincexvincex PEx Influencer ⭐⭐⭐
    g_func2002 wrote: »
    Hi Kuya Danny,

    Happy New Year!!!

    Just want to get your views on the further appreciation of the peso as hinted by BSP today and whether i should convert all my dollar investments to avoid additional unrealized loss and place them on peso investment (MF / UITF)?

    However, converting them would mean that realize all the loss.

    Thanks.

    Yes!!!

    The dollar will continue to devaluate against the peso for a long term outlook unless the feds or Pnoy does something funny in between. But based on current performances, changing everything is the most proudent thing to do.

    Also, local investments will give you much better returns.
  • i just switched my dollar investments to peso earlier this year! :) i expect the peso to stay strong against the greenback for the next 2-3yrs.
  • bunot78 wrote: »
    i just switched my dollar investments to peso earlier this year! :) i expect the peso to stay strong against the greenback for the next 2-3yrs.

    i don't think so, BSP will not allow this to happen...
  • noob_asero wrote: »
    i don't think so, BSP will not allow this to happen...

    it's not just up to them. the dollar is weak and will remain weak. BSP can only hold the peso down for so long.
  • noob_asero wrote: »
    i don't think so, BSP will not allow this to happen...

    The Philippines do not have much of an export industry to protect. We are still buddy-buddy with the USA probably the same reason Japan is for the mighty US military support America can provide. Same reason Saudi Arabia is also buddy-buddy with them helping protect the Petrodollar. Yet if you look @ 9-11 perpetrators: Saudi and Egyptian terrorists! The people are not in agreement with their own governments. When the government leaderships change, it will not be good for America.

    A strong Philippine Peso is a reflection of our changing economic fundamentals. Our banks are certainly stronger than US banks loaded with toxic investments and derivatives in part because they thrive in manipulating markets to suit their agendas. A strong peso will bring prices down. It will help improve our standard of living. The OFWs will come home if the local salaries in line with a strong currency makes working overseas unproductive. This is already happening. I cannot wait when the increasing Philippine middle class put us in a position of buying power to compete head on in international trades.

    America has changed and moving towards third world economics. I spent most of my working years in the USA and it is vastly different when I first starting working there in the 70s. The writing is on the wall. In many ways, our standard of living is already higher here. Middle class cannot afford maids or chaueffers or gardeners. I have to pump my own gasoline there (except Oregon). The water heaters there I have to replace every 3 years or so while the ones here provides unlimited hot water. The gas distribution system there is very old and dangerous. Gas lines will break in a major earthquake. Here we have gas tanks that doubles as emergency fuel. he-he

    I will think twice in favoring US Dollar vs Philippine Peso. This is a different world from your parents and grandparents. Our time is here. We are a young country and learning pretty well. Corruption is still a problem but where in the world isn't? There is corruption even in the USA where those entering Congress becomes a multi-millionaires in a few short years. Trading inside info is illegal for ordinary american citizens yet congressmen use it without reservation. ha-ha

    As a dual-citizen of both USA and Philippines, my wish is that BOTH will prosper but the fundamentals are not the same. America is deteriorating from the inside while Philippine middle class continue to widen. The poor cannot take advantage of these changes. Even Jesus stated, "the poor will always be with you..." We can only take advantage of changing economic and financial landscape and hopefully lift others. The poor cannot help the poor. The poor must join the ranks of the middle class then they can take advantage of the rising tide lifting Philippine economy.
  • A strong Philippine Peso is a reflection of our changing economic fundamentals.
    - yes but now now.
    A strong peso will bring prices down. It will help improve our standard of living.
    - this is an economic stigma, if the country's currency is going strong vs USD, everybody thinks that the prices will go down and the people will have a BETTER way of living, not true. May proseso ang lahat lahat. So long as the Philippines is heavily dependent on remittances and BPOs, i doubt they will let the Pesos go further down to 40 pesos a dollar.

    like your enthusiasm knightrader, but what you're saying will probably happen 10-15 years from now (my prediction)...
  • i second what knightrader said. i'm old enough to have seen the peso be 25:1 to the USD. and it wasn't long ago that it went up to 57:1.

    as of now, the USD is very weak and the US economy is not growing as fast as it used to. they've turned from a production state to a consumer state. unless they create a new industry, i don't see their economy growing as fast as it did in the Clinton yrs. (FYI: did you know that it costs 2cents to make a USD penny? yup. the US loses money each time they make a penny.)

    the reason the BSP can only devalue the peso so much is because this is a democratic country. the gov't has to answer to the people and the people won't tolerate it. unlike a communist country like china which has devalued the yuan and have no fears of public backlash.

    lastly, it costs money to devalue your currency. china spends $1 billion a day to keep the yuan pegged to the USD. idk how much the BSP spends, but i'm sure they can't devalue the peso for as long as china has devalued the yuan.
  • true again sir bunot78, pero marami kasing disadvantages ang paglakas ng pesos than advantages. i rather see a STABLE pesos, than a strong pesos. don't get me wrong, i like how our pesos fights the currencies however, parang bubble lang yan, i don't want our dear country to go to a "great depression" state ika nga pag pumutok na ang bubble na yan.
  • The USA is not immune to the consequences of vigorous quantitative easing. We have benefited greatly from trading US Dollars against major currencies and real monetary metals gold and silver since 2001. We started buying gold and silver when they were around $250 and $4 respectively. We were able to buy junk silver bags (90% silver quarters, dimes, half dollars) in $1000 dollar bags close to its face value. Now these bags sell for around $19,000 a bag. Buying power in US Dollar have been deteriorating for a long time now yet mainstream are still clueless. We call it a stealth bull market. But the trend is real. If we inflation adjust gold to its high in 1980, gold is not even close to what it should be.

    The power of the feds is manipulation and control of the media. This is a disgrace and keeps most people from preparing for what is inevitable as NO country have embarked on massive devaluation without going into hyperinflationary spiral. The US is not immune to this. Being a reserve currency plus the petrodollar have extended the viability of the US Dollar but even that will not stop its collapse, but only extend the fraud but only for a short time.

    There will always be winners and losers in major turning points in history. The Philippines will more than benefit but evidently, there will also be lots of losers, who fail to see the changing of the times.

    We always state ask when did Noah build the Ark? The simple answer is: BEFORE the flood. We can only give a warning. Preparation and action has to be from the individual's point of view. The collapse when it happens will be SUDDEN. There will be no time to react. We are very sure many Americans who are now still doing fine will wake up one day in poverty. The key words are SUDDEN POVERTY.

    We have been preparing for over a decade and I cannot state how much we have benefitted from it yet the big wave from Elliott Wave patterns is not here yet. We can choose to wait for the big wave to destroy everything we worked so hard for or benefit from it for our loved ones, family and friends. It is a choice. Chaotic times is also a time of opportunity. And preparation is always done BEFORE disaster strikes or it will be too late. We have indicators we utilize that I cannot divulge in its entirety as people would not understand anyway. It is an act of faith to heed the warnings. The writing is the wall so to speak yet what makes a disaster massively destructive is when most did not prepare and just went about their daily cares. To those with wisdom, understanding will move them to action. To those with apathy, my heart of hearts will grieve.
  • trailblazer_boytrailblazer_boy PEx Veteran ⭐⭐
    I think I can answer your question. Majority of my money is in USD because I earn USD here in the Philippines. I need to pay something this year in PHP so I had the same predicament as yours.

    I decided to convert most of my USD to PHP then invested it in BPI and BDO. I also placed some of my PHP to SDAs. In terms of PHP investment, I think the best right now is BDO for me is BDO Peso Bond Fund, BDO Fixed Income Fund and BDO Balanced Fund.

    Then my remaining USD I invested also in BPI and BDO. The best USD investment for me is ALFM Dollar Bond... malaki nilaki ng USD ko rito pero lately di na sya umaangat. I also tried BDO USD Money Market and Peso Bond... maliit lang kinita ko rito pero ok na rin at least it is earning something. Marami rin options sa BPI... try BPI Global Equity.

    I don't see the depreciation of USD as a lost for me kasi I earn in USD. It will be a lost if kunyari bumili ako ng USD worth P57 before tapos naging P40 kasi naglabas ako ng pera.

    I think the USD will continue to depreciate this coming years especially kung magkaroon ng investment rating upgrade ang Pinas this year.

    Tama si Kuya Danny, question is how long do you plan to use the dollar? If short term like me... better convert it if matagal naman then keep it as USD then invest it.
  • KuyaDanny wrote: »
    Sorry, I did not realize earlier that the question was directed at me.

    I will be revealing my age when I say this, but you will be hard pressed to find somebody who has lived through the Marcos era who today does not keep at least part of his wealth in dollars. You will find quite a few of them who not only keep wealth in dollars, but also out of the country. But that is another conversation altogether.

    I have seen the exchange rate fall from P4.00 to P57.00 or so in my lifetime, so my time horizon is different from yours. I started accumulating dollars at P21.00, so compared to today's rate of about P40.50 I am still ahead, right?

    My point is that you have to define some time horizon before you make a decision to exchange currencies. In the short term, for example, if I had $5,000 today which I needed to exchange for pesos because I have to make big payment in October, I would sell now rather than in October. But if I had that same $5,000 and don't really know what to do with the pesos, I would keep the dollars and invest.

    Like burndvinyard above, I would keep part of my money in USD, not just for now but maybe always, because I will always have a need to spend dollars, and I prefer not to scramble to buy foreign currency at as needed, when the timing may not be right.

    Thank you for your reply.

    Just to let you know, i invested half of my USD in PNB Life USD Fixed Income (UITF / MF); 30% in BPI Philippine Dollar Bond Fund; and the remaining 20% in BPI - Philam Odyssey Dollar MF and the returns are relatively OK but the thing is i think the appreciation of the PhP is eating out the returns of my USD investment in the short run (6 months already). This is actually my concern for the USD investments. And of course, I want also to ride in the success of my PhP investments.

    My peso investments are doing great in PNB High Dividend Yield UITF and BPI Odyssey Diversified Balanced Fund.
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    How did you acquire your USD? Did you buy them with pesos, or did you earn them, like trailblazer_boy did?
  • Events are moving to bring the biggest bubble (ponzi scheme) ever, US Dollar and Treasuries to its right valuation: ZERO. This I say with a heavy heart as we are still dollar-based trading US markets. I feel we do not have enough time to switch completely outside of US Dollar as we trade US accounts and still hold properties in the US. The Petrodollar have supported the dollar for awhile now but even that is currently being challenged by major countries opting to trade energy in their own currencies instead of US Dollar. We have been trading for awhile and have not seen fundamentals and even technicals attacking the qualifications of the US Dollar as the reserve currency of the world. The collapse may happen suddenly and will leave many people unprotected. We will also take a hit but have enough to survive buying properties here and moving funds methodically from the USA. There is NO confusion on our part. The way to currency destruction is very deceptive as evidenced by the collapse of the Reichsmark in Weimar Germany. The upside knee-jerk upward reaction is not a time to think the carnage is over but an opportunity to unload dollars @ a still reasonable level. What is coming will be a surprise to most and there will be no time to react unless you prepare NOW.

    Here is a video from a fellow trader...

    http://usawatchdog.com/usa-going-to-get-downgraded-karl-denninger/
  • KuyaDanny wrote: »
    How did you acquire your USD? Did you buy them with pesos, or did you earn them, like trailblazer_boy did?

    I bought them in pesos that started way back in 1997... my last purchase was done when the USD was around PhP51... So i am really on the losing end right now. Read Bloomberg report yesterday and that they have projected that the USD to PhP will go down to the 39 level sometime 2nd or 3rd quarter of this year.
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