Money
Currency
The basic unit of Philippine currency is the peso (Tagalog: piso). There are 100 centavos in 1 peso. As of July, 1990 the exchange rate is approximately 24.00 per dollar. There are coins of 1 centavo, 5 centavos, 10 centavos, 25 centavos, 50 centavos, 1 peso and 2 pesos, and bills of 2 pesos, 5 pesos, 10 pesos, 20 pesos, 50 pesos, 100 pesos and 500 pesos.
The saga of the sagging peso has been steady rather than startling. From a high of 2 pesos to the dollar following WWII the decline began when President Macapagal dropped controls in 1962 and within a year it was pegged at 3.89. By the end of the decade the guiding rate was 5.628 and two years later in September with the proclaimation of martial law the exchange rate was 6.78. In 1980 the peso was traded at 7.5. Two months after the assassination of Ninoy the official rate had plunged to 14 and on the black market above 20. When President Aquino took over in February 1986 the peso stood at 20.46. The peso topped 25.45 on the black market in August 1990 while the official stance is to destroy the black market and hold the overvalued peso. In 1991, the rate was about 28.
The financial heart of the Philippines is in Makati, a part of Metro Manila, within a triangle formed by Ayala Ave, Makati Ave, and Buendia Ave. Most Philippine branches of foreign banks as well as the main offices of Philippine banks and Philippine subsidiaries of foreign banks are located there.
Banks in the Philippines are faster than banks in India or most African countries but slower than those in Hong Kong, Europe, and the United States. Many bank transactions will take one-half to one hour.
The bank doors open throughout The Country at 9:00 and close at 15:00 with few exceptions. Banking days are Monday through Friday except for holidays and days when there are typhoons. Days between a Sunday and a holiday often are declared "special non-working holidays" on which banks also remain closed. More complicated bank matters, especially those involving transactions with other countries, should be done at a head office.
Safe deposit boxes are difficult to find in Manila as well as in the bigger cities throughout the archipelago. In Manila, the best chance may still be at the head office of the Philippine National Bank in Escolta. Deposit boxes usually are rented by the year. In addition to the rental advance, a key deposit must be paid.
Exchange
Money may be exchanged at banks, at money changers or at hotels. The term money changer as used in this book applies only to those having a shop and a counter for their operations. Money should not be changed on the street, not only because it is illegal but also because one surely will be cheated.
Generally, the exchange rates are more advantageous at money changers than at banks and they often vary considerably not only from one money changer to another but also among banks, as every bank is free to set its own rates. The Philippine National Bank and the Philippine Commercial and Industrial Bank have a reputation of giving the best rates among banks. However, these rates are generally still lower than rates of money changers. Changing money with money changers is also much faster than changing in banks because there are fewer formalities. But money changers do not issue Central Bank receipts which are required to change back an oversupply of pesos when leaving The Country . Furthermore, money changers can almost exclusively be found in the Ermita area of Manila, mostly along Mabini St. Money changers are uncommon in all other parts of the metropolis, and in the provinces.
The best foreign currency to carry is the US dollar. Other foreign currencies are traded at a slightly lower rate than their standing against the dollar would lead one to assume. Money changers pay less for small denominations: 1, 2, 5, 10, 20 dollar bills. Compared to the 50 and 100 dollar bills, the difference can be as much as 10 percent. 100 dollar bills are the most sought after.
At money changers, exchange rates also vary slightly, depending on the time of exchange. Generally, rates are a bit lower before 9:30 and after 21:00 for lack of competition. Also on weekends and holidays, money changer rates drop slightly. The best days to change are often Thursday and Friday.
In the provinces, exchange of foreign money is often only possible at banks, and not at good rates. Therefore, it is common to change enough money in Manila before going to the provinces. When staying longer at one place in provinces, it is advisable to place money in a bank safe deposit box rather than in a savings account.
Travelers checks can be changed in Manila in most banks or with money changers. The rate for travelers checks is 5% to 10% lower than the rate for cash. Purchase receipts for the travelers checks as well as a passport are required for cashing. The checks are only accepted if signed at the counter of the bank or money changer. In the provinces, it can sometimes be difficult to change travelers checks. Many banking companies which accept travelers checks in Manila do not so in their provincial branches. In the provinces, the best place to change is a local Philippine National Bank or a Central Bank in larger cities.
Cash advances in dollars can be obtained with an American Express Card at American Express, and with a Visa Card at Bank of America. Cash advances in pesos can be obtained using a Visa or Master Card at any Equitable Bank branch, or with a Diner Card at Security Bank branches. Equitable Bank bills the withdrawal in dollars but gives pesos at a rate higher than it would for either cash or traveler checks. Equitable also adds a charge but no one can explain it and some card users claim they can get the charge refunded in their home country. A passport is required when withdrawing money with credit cards.
In Manila, there is an American Express branch in the PHILAM Life Bldg, on UN Ave across from the Pavilion Hotel, an Equitable Bank branch at the corner of Jorge Bocobo St. and UN Ave, and a Security Bank branch at the corner of UN Ave and Mabini St, Ermita.
Eurochecks are generally not accepted. The best places to get pesos for this guaranteed European checks is with branches of European banks. Also some Manila business establishments with European partners accept payment in Eurochecks.
Money remittances from abroad to Philippine banks may be either to given accounts or just in the name of the claimant.
Foreign currencies other than the US dollar, when remitted to the Philippines, cannot be directly converted into pesos but must first be converted into dollars based on the rate of exchange at its place of origin. The Philippine peso cannot be remitted from abroad as this currency is not accepted as hard money in international markets.
A telegraphic money transfer is the fastest way to have money sent from abroad. The money normally can be withdrawn in Manila within 3 to 5 days, counting from the time it was sent from abroad. If the order for the telegraphic money transfer is sent by mail which easily takes more than a week, no arrival of money can be expected in Manila for a half month.
Before ordering a telegraphic money transfer from abroad, one should contact the bank at which the money is supposed to be received. Some banks don't handle amounts under a certain limit whereas others may not have well established contacts. Reported irregularities are that banks have kept money they received for weeks or months before paying.
Local charges for the telegraphic remittance from a correspondent bank are a documentary stamp tax and a handling fee. Documentary tax ranges from 20 to 30 centavos per 200 pesos while the handling fee is about 1/4 of 1% of the amount remitted or a flat rate ranging from 20 to 30 pesos. However, a comparatively big charge is imposed on the sender of the money abroad, as he has to pay the telex fee which can be 20 to 50 dollars.
SWIFT is a more modern way of money transfer from abroad. The acronym stands for `Society of Worldwide Interbank Financial Telecommunication'. The SWIFT system functions through computers in those banks which are members. The member banks of SWIFT in the Philippines are: Philippine Commercial International Bank, Philippine National Bank, Bank of Philippine Island, Metrobank, United Coconut Planters Bank, Far East Bank and Trust Company, Allied Bank, Equitable Bank, Asian Development Bank.
SWIFT has a regional processing center in Metro Manila at the Telecom Plaza, Gil Puyat Ave Ext, Makati.
SWIFT is used in many international financial transactions such as money transfers and letters of credit. SWIFT charges at the place where the money is sent from, are about 20% lower than the charges for telegraphic money transfers.
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