Windfall for OFWs as Philippine peso slides against US dollar: Time to remit?

Overseas Filipino workers (OFWs) sending money home are getting a windfall as the Philippine peso slid on Thursday (February 24, 2022) following a spike in oil prices on supply disruption fears triggered by Russia’s invasion of Ukrainian cities.

Based on data from the Bankers Association of the Philippines (BAP), the Philippine currency closed at Php51.34:$1 on Thursday, 24 centavos down from Wednesday’s close of Php51.10.

Philippines stocks also took a hit Thursday as selloffs saw the local index (Phisix) down by 2.06% to close 7,212.23 while the broader All Shares index slumped 1.91%, reflecting a broader market meltdown due to geopolitical uncertainty.

BAP data shows the total dollars traded reached $1.16 billion on Thursday, up 24% from $934.2 million on Wednesday.

In January, the Philippine peso dropped beyond Php51 per dollar for the first time since April 2020 amid speculation the nation's trade deficit will widen as domestic demand improves.

Geopolitical jitters

Given the jitters from the Russia-Ukraine conflict, some day traders warn that there’s going to be a lot of down moments, before things get better and stocks can be sold off at a profit.

Oil futures jumped more than $105 for Brent crude for the first time since 2014 on Thursday. At its weakest point, the peso was down to Php51.45 (on xe.com), though it went up to as high as Php51.17 during the day against the US currency.

The Bangko Sentral ng Pilipinas, in a monetary policy report published earlier this month, stated its exchange rate outlook of between Php048.00 to Php53.00 per $1 for 2022 and 2023.

Brent crude surged to as much as $105.13 a barrel, the highest since Aug. 14, 2014, and was at $104.95 a barrel at 01.16 pm GMT, up $8.11 or 8.37%.

Philippine financial markets are closed on Friday, February 25 for a special non-working day in commemoration of the 36th "People Power Revolution” anniversary.