In essence, the lower value of the US dollar slows down remittances (OFWs holding on to their dollars instead of sending them to the Philippines), thus less cash-in-hand with OFW families, and less money available for consumer spending, saving or investing (in real estate, for example).
A study warns that this may have an adverse effect on the Phlippine economy.
“The monthly growth numbers of OFW remittances bear watching as this may indicate whether the feared recession in the US is beginning to have an impact on the money flow from overseas Filipinos,” brokerage house Philippine Equity Partners, Inc. said in a research note.
Source: BusinessWorld Online
What should OFWs / OFW families do?
Here are some views I’ve picked up from my reading and conversations with colleagues.
- Invest in US dollars instead of in Pesos. Premise is: the US dollar is still historically a stronger currency than the Phlippine peso.
- Invest in the Euros which is currently a stronger currency than the US dollar.
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