Current rate about 4,500 Peso to the pound here in Colombia, but very volatile. Not had a chance to work out how many COP it costs for a beer yet.
What drives exschange rates? Good question. Exchange rates are very complex and notoriously hard to predict. Its not a good idea to examine OFW remittances and conclude that when OFW remittances increase they will alter the exchange rate. Don't forget that whilst remittances equate do equate to 10% of GBP, they are relatively evenly distributed throughout the year and tend to continue year on year in a predictable fashion. They aren't really a destabilising factor. I feel a larger effect of the remittances are that they are an influx of wealth in the country that is then spent within the nation and will help to positively drive growth. Exchange rates are governed largely by the trading that occurs between a country and the rest of the world. They are all computed against the US dollar. Some countries actually peg their currencies to the dollar by policy. If the forex rate is allowed by the government to 'float' then other economic factors that affect the forex rate include the GDP amount, the Consumer price index (CPI) and difference in inflation between that nation and other countries. Further factors such as differences in interest rates, and the currrent account and balance of payments of the country and the amount of debt that a country has, its political climate and perceived economic and political stability, and whether the economy is in growth or recession. Another important driver on foreign exchange rates is the fed funding rate within the US. An increase in the fundng rate will make the dollar stronger relative to other currencies which, because the dollar is so important, will tend to affect the whole world. Moving back to the balance of payments, it is important to consider the balance of cashflows into and out of a country. For example, OFW remittances and exports are foreign currency inflows into the Philippines whilst imports and debt servicing are outflows. The Philippines imports huge amounts of electronic equipment, fuels, machinery, cars and other goods. The Philippines exports plenty of things like coconut oil, petroleum products, dried fish (god knowy why), gold and semiconductors. As you know, a strong currency hampers exports and helps imports. A weaker currency stimulates exports and paradoxically in a country like the Philippines its actually helpful to have a weaker currency as a stimulus to the economy. So the whole thing becomes very complicated.
Be careful there Dave, its not the safest place in the world. Good place for wine women and song though, enjoy
In terms of inflows you do tend to get a significant surge at Christmas with huge waves of returning OFW's spending their foreign currency savings in the country, mostly in US dollars even the ones coming back from the middle east (means they probably have paid twice for currency conversion ) I appreciate that the flows are fairly constant for most of the year but there is a surge in Oct,Nov,Dec and as you say a hell of a lot of spending although also as you say a lot of that is spent on imports. Fingers crossed that this year is atypical (and I know that is selfish of me), it costs me personally a lot for example back in February this year I was getting 63.6 on a market rate around 65, I send significant amounts of money over there every month.
Egypt - Turkey - England - Columbia Do you generally go clockwise round the planet Dave as viewed from the North Pole ? You were in Columbia the other year were you not? P.S. I can confirm that he really is in all these places folks the internet does not lie, except for the odd VPN connection
No, this is my first visit to Colombia. One year ago I was in Panama for a month and a half. Then Thailand, Cambodia and Vietnam for three months over Christmas. Then 48 nights in Tlaquepaque, Mexico. One month travelling in Malaysia and Indonesia. Ten weeks in Philippines, Cambodia, and Thailand. One month in Egypt. Ten nights in Turkey. And now a month in Bogota. Got to keep the KLM Gold card status.
Ah yeah, I remembered south America The problem with KLM status now is that the miles premium for award bookings is crap I have not got a lot of miles left only 133,000 but it is almost impossible to spend them on what I want to spend them
Just to put the P.I`s GDP into perspective. They export large amounts of electrical equipment and processor chips to companies like Nokia and Ericsson..On average about 90% of the demand for them for these companies and many more.. Industry produced export usually accounts for just over 30% of GDP.. Agriculture exports only about 10%.. Outsourcing and services are the country`s real bread and butter these days and accounts for about 60% of GDP. The country has a whole mass of natural resources..Some of the largest nickel deposits in the world are in Southern Palawan for example.. Of course,the value of these resources have plummeted since the slow down in China but the potential is there if the P.I learn to take advantage when the time is right. OFW money can be seen everywhere..Very very hard to find a parking space at our local mall these days as its full of brand new SUV`s.. It`s ridiculous. The best way to hedge against Pound-Peso exchange rates is to figure out a way to earn Peso`s as well as Pounds!! LoL.
I have several Panasonic ThinkPad DVD reader/writers for my laptops that are made in the Philippines Sadly they are the only variety that are so locked down that they won't allow AnyDVD to remove the DRM locks so I have to use my made in Taiwan ones when I want to do that Yeah you are dead right the best hedge is to be able to earn Peso and Pounds
Its not just the exchange rate that effects OFW`s or Filipino`s abroad with a family to support..General Inflation here is always overlooked and often kicks the ****e out of a 1 or 2 Pesos gain on the exchange rate. I can remember when a case of SMB was just 48.00 Pesos.. Now its P512.00!! Also a 3% annual sin tax added to boot. OMG..Where will it all end???
£4.50 a pint (where it will all end that is ) I think you are getting a case cheaper than we get it in Metro Manila But yeah, I notice the inflation too, more than anything that has devalued the pounds purchasing power over there, for a lot of things I don't see a lot of difference between there and here in the UK now.
I buy a case of 6 1-litre bottles of SM Pils for P360 The Red Horse is pretty much the same. A few Peso's different About £0.50 per pint Most of the big supermarkets sell the litre bottle for around the P70 mark
Bit of a mixed time for Sterling getting pulled this way and that. Still as long as the outcome remains roughly in balance we can enjoy a reasonable RoE Looks like this may be the case for a while. Unusual for this time of the year when £/P tends to fall a bit. UK retail sales for September was good enough to strengthen rumours of a BoE interest increase before Q2 2016. With continued downward trends in unemployment and continued upward trends in wages it suggest increased consumer spending. Hopefully a stong £ too
I have totally stopped drinking alcohol in UK ...and smoking. I don't miss either. The savings I make are almost enough to finance my trips to the Philippines...and will hopefully give me an extra 5 - 10 years of healthy life.
The KLM website currently has flights available from Manchester to Manila starting at £380 return, (e.g 4th November to 3rd December). So given the figures above, an 8 pints a day Boddingtons "pub" drinker could save money by flying to the Philippines for four weeks, and drinking SM or Red Horse sitting outside the supermarket. And don't forget that you can get £8 Quidco cashback for KLM longhaul!
Yes, but for their January flights it goes up to £693. I booked and paid today £502 with Qatar...flying January. (30kg baggage allowance and advance choice of seat). Good flight duration too. Had to bite the bullet at some point.
I like the idea of Beernomics. It takes a special mind to come up with that idea I wonder if it's as accurate as Burgernomics ?
