- Posted by Sean on July 24, 2015 in Financial Tips
Remitting money back to India can be expensive. However, it doesn’t necessarily have to be that way. With simple tricks and tips, you can make sure that you get the most bang for your buck. Things such as knowing the jargon, using the most cost effective service, and timing your money transfer can make your money go a lot further. Keep reading for a simple explanation of why money transferred to India is subject to fluctuating exchange rates. Then be sure to read our list of easy tricks and tips that help maximise your money by taking advantage of India’s often-fluctuating exchange rate.
Why do exchange rates change?
Most international currencies change because they float. This means that the value of the currency relative to other currencies is set by supply and demand. This translates to traders of currencies around the world buying and selling each different currency. Whilst some countries government set a fixed exchange rate, most fluctuate. Foreign exchange is traded around the clock, all around the world. While the markets may be closed in India, other markets are still open. This means that trading activity really is 24/7. Because of this, foreign exchange rates can literally change minute by minute. For example, 2009 saw the Indian Rupee reach new highs against the United States Dollar. However, the same year also saw the Indian Rupee subsequently reach new lows. Depending on how much money you wish to transfer to India, the exchange rate changes have a varying effect. If for example, you are remitting a small amount, a change in the exchange rate may result in a slight difference. However, if you are remitting a large amount, a change in the exchange rate can mean a huge difference.
Know the jargon
Foreign exchange has its own unique jargon. It pays to learn some common terms so that you know exactly what you are getting into with foreign exchange. Some common terms include:
- Sell rate: This is what you get when you exchange your local currency for foreign currency
- Buy rate: This is what you get when you go the other way and exchange foreign currency for local currency
- Interbank rate: This is sometimes called the bank to bank to rate. This is the wholesale rate that banks exchange currency at between themselves.
By knowing these terms, you can be sure that you are signing up for exactly what you think you are. Some services such as OrbitRemit go one step further and calculate exactly what receivers of remittance get. This helps avoid confusion and further simplifies the remittance process.
Investigate the economy
Before sending money back home, it pays to do a bit of research. Adverse economic events weaken the country’s dollar, so the currency you send gets converted into more. Conversely, beneficial economic events strengthen the local dollar. This translates to currency not going as far. If you expect either adverse or beneficial events to occur, be sure to take this into consideration when remitting money to India.
Monitor exchange rates
Watch the daily “interbank” rates on your chosen currency so you know what makes a good exchange rate. Currency fluctuates constantly. This means that the price you get will normally never be the same from day to day.
Many things cause travel money to wobble, from employment figures to economic forecasts to interest rates, so watch currency movements and transfer when the rate is climbing.
Conversely, if you have money you wish to transfer back to local currency, do this when the rate is falling.
FXStreet is a good site to monitor exchange rates on, because a live display of rates is always shown.
Compare apples with apples
If you are shopping around on exchange rates, make sure that you always account for any additional transaction fees or commission as well as the foreign currency exchange rate at the time of transaction. This means that you are calculating the total cost of remitting your money. By comparing total costs of remittance, rather than just the rate, you can make sure that you are getting a good deal. While a deal or exchange rate might appear to be extremely attractive, it might not be competitive at all once you add in the extra fees or commissions.
Shop around and use the cheapest provider
Currency rates not only fluctuate from day to day, but they also fluctuate from company to company. While you might expect prices to be the same across the board, it is rarely the case. This means that is extremely important to shop round for the best deal before you remit money to India. Finding the cheapest provider can mean great savings, especially if you are remitting a substantial amount.
OrbitRemit offers the lowest rates for sending money back to India, at all times of the year. Unlike other services, your first remittance through OrbitRemit is free, giving you a chance to test out the service. For each remittance after that, there is a fixed flat fee. Other services commonly charge fees on a percentage basis, meaning that the more money you transfer, the more you pay. In terms of the exchange rate, OrbitRemit also offers one of the best exchange rates available on the market, again at all times of the year. This rate is better than what your local high street bank offers, meaning that more money gets to you where you want it to be.
- Posted by Tom on June 4, 2015 in Market
Sri Lanka’s had its issues over the last thirty years or so. While GDP increased by 7% in 2014, the country still has some challenges it must overcome before it can develop sustainably. We’re going to take you through Sri Lanka’s biggest development stifling demons.
Post Civil War
Tensions between the Sinhalese and Tamil minority lead to a 26 year civil war in Sri Lanka that ended in 2009. Six years on, after 70,000 deaths, the economy is still hurting. Huge international concern arose about the fate of civilians caught in the conflict zone and war crimes.
While the end of the civil war has allowed tourism to return, things are not quite prosperous just yet and tensions still exist between the Tamil and Sinhalese. Many conflict affected areas, such as Jaffna (to the north) depend on wells for water. While is enough water to scrape minimum standards, there isn’t much more. Access to education is also limited, with particularly poor school facilities in rural areas. Education is a key to economic growth – it equips children with the skills to perform jobs that are used to grow the economy. The fact that these issues even exist suggest that Sri Lanka isn’t likely to maintain any stable economic growth until it meets the basic needs of its people.
As you could imagine, conflict has scared away tourists from Sri Lanka, however these are starting to return as the company recovers from the civil war. Tourism has hit an all-time high with approximately 1,500,000 tourist arrivals in 2014 alone. Tourism brings overseas money into the Sri Lankan economy and therefore contributes greatly to economic growth – putting Sri Lanka on track to improve its economic situation.
Sri Lanka is getting an economic boost through its working age population. However, the working age population is significantly larger than children and the elderly. The population is aging – which is okay for now, however by 2041, 25% of the population is predicted to be elderly. An aging population means less future economic growth (as workers will be retiring) and a large proportion of the population relying on government support (through pensions etc). While this is a difficult problem to combat, the government will need to combat this if Sri Lanka is to sustain its economic recovery after the civil war.
While Sri Lanka’s newly elected president, Maithripala Sirisena, has sworn to defeat corruption, it is still a large strain on economic growth. In particular, property rights are difficult to enforce because of fraud. A lack of property rights stifle independent investment, as people no longer actually have claim of right to anything. This makes people reluctant to actually buy or create things – as there is a fear that they don’t have the legal right to actually keep what they’ve earned. Since people have little incentive to earn, economic growth slows down.
What makes this worse, is Sri Lanka’s lack of Judicial independence – meaning that the Sri Lankan government influences the local courts. This allows the government to use the courts as a puppet – making for an ineffective, corrupt dispute resolution system. What’s more is that the government isn’t transparent – they’re able to create new laws and push them through without the public seeing, or getting a chance to critique, what’s going on. Public servants and ministry officials are frequently bribed too, showing that government officials are failing to stick to the rules for personal gain.
Unfortunately, Sri Lanka suffers from weak whistle-blower protection – meaning that those who report corruption are given limited protection from the system to hide their identity and ensure their own personal safety. If Maithripala Sirisena is to reduce Sri Lanka’s corruption levels, offering protection and incentives to those with inside knowledge in exchange for information is a must.
A Lack of Media Freedom
Like them or loath them, the media is important when it comes to running a transparent country to conduct business in. A free and independent media open the government and businesses up to public scrutiny and criticism. The government is likely to act democratically and within the rules if it’ decisions are reported by the media. This keeps politicians and businesspeople accountable for their action, stifling corruption and keeping things democratic.
Unfortunately, the Sri Lankan media is still somewhat under fire. Reporters are often threatened at gunpoint and attacked in order to stop particular articles being published. Stories such as this one, where a printing press was doused with diesel before being set alight by gunmen are all too common: http://www.telegraph.co.uk/news/worldnews/asia/srilanka/10389519/Sri-Lankas-media-struggles-to-cope-with-death-threats-and-harassment.html
The newly elected president, Maithripala Sirisena, is reopening investigations surrounding murders and disappearance of journalists in recent years. This shows some acknowledgement of the gravity of harm facing the media, and may well lead to a more independent media in Sri Lanka in future.
While the war may be over, Sri Lanka still has a number of battles to fight before it can improve its future situation. If you’re looking to send money to Sri Lanka, OrbitRemit offers low cost, attractive exchange rate transfers between the LKR and many other currencies. Check out our calculator on the top right hand side of the screen to work out exactly how much will reach your destination!
- Posted by Paul on June 4, 2015 in Financial Tips
India is renowned as one of the world’s best places to travel to. The culture, people, and history all combine to provide something unique to travellers. Fortunately, you don’t need vast sums of money to experience India and all that is has to offer. Travel to India is relatively inexpensive compared to many destinations, but read below for ten India budget travel tips to make your money go even further.
1. A great idea to save money while travelling in India is to use online sites such as Agoda.com to book accommodation. These sites aggregate rates by price, so you can be sure to find accommodation that is in your price range and in the idea location. As a guide, hotel room’s range from $5 to $15 USD per night, however you can save even more by taking advantage of online discounts. In major cities you should be prepared to spend up to $25 USD per night for a room, however this is still relatively cheap by Western standards
2. Food can come at a substantial cost to travellers, but there are much cheaper options available to travellers in the know. The street food in India has a lot of variety, and is extremely inexpensive. Meals with two different curries, puffed bread, and soup can cost as little as 70 cents USD. This means that spending a little bit of extra time finding streets dedicated to food vendors can save you huge amounts. Not only is food from street vendors cheaper, but can also be safer as you can see exactly what is going into your meal. If eating out is your preference, some restaurants can provide meals for as little as $3 USD.
3. Be prepared to negotiate prices. It is important to bear in mind that every seller in India will try to extract all that they can out of you. This can mean that you end up paying much more than you need to for things. Haggling is prevalent in India and it is important that you learn the art of bargaining. Often sellers will try charge foreigners ten times the regular price of items, so there are large savings to be made. It is a good idea to only take the money with you that you are prepared to spend, and not any more. If you do need to take more, we recommend keeping it in a separate place such as a bag.
4. Prepare a daily budget prior to going. This will ensure that you are adequately prepared for travelling around, and this also makes sure you spend less money. A handy site is Numbeo.com, and this provides the price of many things in India. Once you have costed your daily expenditure, multiply this by the amount of days you plan on being away. This will give you the total amount of money you should take. It is a good idea to take a bit more than this in case anything unexpected happens.
5. Be careful with your money. India (like many countries) has many pickpocketers that prey on tourists, so it pays to be vigilant. Only take the money with you that you need for the day. Another good idea is to keep money in different places so that if something does happen, you have a back-up plan. Many rooms that you stay in will have safes that you can keep money. Other forms of currency such as travellers cheques and debit / credit cards can be useful, but may not be accepted at as many places.
6. Go to a doctor before you go. It pays to visit a doctor in your home country before travelling to India. This way you can get vaccinations and medicine in case you fall sick. Medical care can be expensive in India and can be costly, so this an excellent preventative measure. There is also the added bonus of not having your trip ruined by illness.
7. Travel during quiet times. If you choose to travel to India during peak times, you will have to pay a premium on many things such as flights and accommodation. Travelling in off-peak times can save you a lot of money, as there are many discounts and promotions available at this time. In general, the peak season in India runs from around October to March, so travelling outside of these times is considered off-peak. However, if you are heading to India’s mountainous regions, the busiest time is in the winter, so this is something else to consider.
8. Experience rural India. India’s big cities are becoming increasingly more expensive. An alternative worth considering is exploring rural India. Not only will this take you off the beaten path, but save you money. There are many organisations that operate in the rural tourism niche, and these include Grass Route Journeys, The Blueberry Trails, and Travel Another India.
9. Learn the local language. Learning the local language can help you befriend locals. You can understand their lifestyle and get inside information, which can help cut down expenses. To learn key phrases before you go, it is a good idea to read online guides and language tips.
10. Avoid tipping too much. Tipping is expected in India; however most places already include this charge as a ‘service charge’ in their bills. Be sure to check this before tipping to avoid tipping twice. As a general rule, you should not tip more than ten per cent of the total bill.
- Posted by Jason on June 3, 2015 in Financial Tips
Travelling can be expensive, but it doesn’t necessarily have to be that way. No matter what destination you choose, there are plenty of simple ways to reduce costs and enjoy your vacation even more. Some websites may offer tips and advice that seem like common sense, so we have compiled a list of the top 10 ways to save money on travel that you haven’t heard before. Keep reading to find out what they are.
1. Consider calling places before booking online. Whilst booking travel arrangements online is easy and simple, it does not always guarantee you are getting the best deal. An example of this is with hotels. A good idea is to call a hotel and ask to speak to someone higher up such as a manager or supervisor. This will ensure that the person you are talking to actually has the authority to cut you a deal.
A useful strategy is comparing pricing and seeing whether they can match it or not. This idea works not only for hotels, and many places will give discounts if you ring up. However, it pays to check that there are not additional phone-booking fees charged.
2. Use repositioning flights or cruises. Airlines frequently use repositioning flights to move planes from airport to another. These repositioning flights are a lot cheaper than normal flights, but provide exactly the same service. Repositioning deals are also offered by cruiselines, however they are not as often. Rental cars and campervans also offer these and this can mean cheap travel while on holiday. There are downsides to repositioning deals however, as they may not fit in with your scheduled vacation. Many providers will not advertise these deals, so you will have to ask directly.
3. Travel to places that travellers don’t normally go. Some people purposely travel to places where tourism is less prevalent. Not only does this give travellers a more authentic experience, but they can avoid inflated tourist pricing. Places that have recently been struck by disaster also provide opportunities to dramatically reduce costs. There have been reports of travellers having saved thousands by travelling to the Greek Islands after austerity struck the region. Similarly, the Chinese government heavily subsidised tourism after the SARS outbreak.
4. Try alternate airports if you are travelling by plane. Many large airports have other airports nearby. Instead of using the closest or biggest, it may be more cost efficient to use another airport that is a little bit further away. An example of this can be found with New York, as most flights arrive at the La Guardia airport. However, flights to other close airports such as Newark and JFK may be cheaper. A dedicated site called AlternateAirports.com has been set up to help travellers see if this option is available to them. However, don’t forget to remember other factors to make sure your chosen airport is the best for you
5. Spend more time in less places. Travelling slower may mean that you get to take in more of the country while substantially reducing costs. Flights, trips by bus or train, and driving are amongst the most expensive components of travelling. By taking more time and going to fewer places, these are greatly reduced. This means that not only do you have more time to enjoy your destination; you also have more money in your pocket.
6. Be flexible with your holiday dates. Being flexible in planning when you want to go on vacation can save you a lot of money. Try to avoid peak times, such as school holidays or festivals. During these times, a premium is often charged on top of what you would normally pay. It pays to research when these times are and avoid them. This also works with flights, and flying at unusual hours and days can much cheaper. The cheapest day to fly is normally a Tuesday or a Wednesday.
7. Haggle on the price of everything. In some countries it is expected for both buyers and sellers to negotiate during every transaction. This can lead to bargain prices, which means your money will go further. If you are unsure on whether haggling is common practice in your destination of choice, it pays to do a bit of research before going. A handy site is Numbeo.com, which lists averge prices for goods in different countries. By using this site, you can ensure that you are paying the right amount for goods and services during your travels.
8. Do things that don’t cost money. A popular phrase is “ the best things in life are free”. This is largely true, and while travelling you can enjoy many experiences that are inexpensive or free. Examples of these include: street fairs and cultural events, visting markets, climbing mountains or hiking, swimming at beaches and lakes, and watching sunsets or sunrises. Exploring your destination of choice on foot is a free yet exciting activity, and you will be sure to discover new things around every corner.
9. Ask the locals for advice. Don’t be afraid to ask the locals for recommendations and ideas. This will not only provide inspiration for activities, but help save you money. Locals will be aware of offers and deals around, so these can reduce your costs. They may also know someone that will be able to help you if they can’t themselves, so it is a good idea to talk to them. A good icebreaker is to ask for directions or advice.
10. Use your age to save money. Your age can save you money when it comes to travelling. Younger people can get cheaper flights and accomodation through STA Travel, who is the world’s largest student and young adult travel organisation. Likewise, older people can take advantage of senior discounts that are often available.
- Posted by Lauren on June 2, 2015 in Financial Tips
If you’re looking to immigrate and find a job in Australia, you’ll want to market yourself in an area with plenty of demand. In order to help you, we’ve compiled a list of 15 high-demand jobs in Australia for foreign workers!
After the Global Financial Crisis (GFC) in 2008, demand for workers in the construction sector fell by the wayside. However, the economy has recovered in recent years after many previous construction workers left the industry. This has led to a high shortage of workers. Moreover, Australia is currently hitting a positive upturn in its housing market, leading to a high demand for construction workers to build new houses. This makes construction an excellent industry for overseas workers. You can find more here: http://www.visabureau.com/australia/builders-and-construction-workers-australia.aspx
2. Information Technology (IT)
As the world moves through the “digital age”, the shortage of skilled IT professionals is set to increase. The business sector’s increasing reliance on technology will only fuel this in years to come.
Specifically, Australia is looking for network professionals, programme and project managers and database administrators/developers. However, you’ll need a Bachelor’s Degree in order to enter this field, which could set you back around $15,000 – $33,000 if you don’t already have one. (http://www.studyinaustralia.gov.au/global/australian-education/education-costs)
3. Skilled Trades
Much like plumbers, migrants seeking work as electricians, mechanics and chefs are in high demand in Australia. These positions require flexibility, dexterity and on the job training. Usually, you’ll need an apprenticeship to enter a trade – take a look: http://www.australianapprenticeships.gov.au/
4. Health (Doctors/Specialists)
It’s no secret that doctors and specialists are in demand everywhere, due to a high number of baby boomers retiring and needing medical care. Be warned however, medicine is a tough profession to get into, with a degree in Medical Sciences costing around AUD $60,000 and with harsh selection criteria.
Registered nurses and midwifes are in short supply in Australia. This is a popular position for many migrant workers – particularly from the Philippines. Nurses with unrecognised overseas qualifications usually have to undergo some form of bridging course. You can find out more here: http://www.nursingcareersaustralia.com/nursing-careers/how-do-i-become-a-nurse-in-australia/
With an increase in demand for construction and housing comes an increase in demand for architects. In order to legally identify as an architect through the Architect Accreditation Council of Australia and you’ll need an overseas qualification in architecture. You can find more here:
With housing demand and population booming, there is a huge demand for plumbers, especially considering the average worker age within the industry being 55. Furthermore, Victoria is offering visa nomination for eligible plumbers – you can find more here: http://www.liveinvictoria.vic.gov.au/working-and-employment/occupations/plumber#.VWrVltKqpBc
High population growth means that education professional are in high demand, particularly in the Early Childhood realm. There’s also a reasonable demand for secondary school teachers in maths, science, languages, design and technology. Generally, you’ll need a Bachelor of Education in order to enter this profession and you’ll need to be registered with the State’s College of Teachers.
9. Accounting and Finance
The amount of jobs in accounting and finance is expected to increase by 21,400 in the years leading up to 2017, mainly to cope with the downturn of positions from the GFC. Be warned however – tax law in Australia is different from overseas (such as the UK). Generally young accountants with a little (but not overly specialised) experience have the best chance of recruitment.
The worldwide shortage of engineers is pretty obvious in Australia. In particular, there is a huge demand for civil engineers and building services professionals. There is also strong demand for Rivet Drafters and mechanical and structural engineers. You can find more here: https://www.engineersaustralia.org.au/about-us/migration-skills-assessment
11. Retail Assistants
Over the five years leading up to 2017, the Australian economy will create 45,500 new retail jobs, particularly in the areas of household goods. This means that there is good demand, but still reasonable competition, for retail workers. Employers are attempting to encourage people to see retail as a perpetual career – rather than being perceived as a “part time” job.
12. Human Resources
Since the Australia economy has picked up following the GFC, more workers have been hired. Obviously, hiring new workers requires hiring people to hire new workers. While you may be out of luck if you’re in the business of hiring workers to hire workers – if you’re an HR professional, there’s plenty of demand for you. Furthermore, new legislation and policies in Australia have increased the demand for workers in the Human Resources sector.
13. Digital Marketing
As global technology improves, advertising is becoming more and more prevalent online. Companies are creating online business and require an online digital marketing strategy. As this happens, more qualified marketing professionals are required, creating a strong demand for specialists in Australia.
14. Secretaries, Pas and Office Support Staff
If you’re super organised and efficient, there are plenty of openings in office administration. You’ll need to be able to handle phones, photocopiers and office software, among other things. A fast typing speed, computer literacy and a warm personality are all essential.
15. Oil and Gas
There’s reasonable demand for those in the area of geoscience, including Petroleum Engineers and Development Geologists. Be forewarned though, as demand isn’t as high as many other areas currently, due to a low global demand for resources caused by China’s economic growth slowdown. This has also reduced careers in mining and resource extraction. It’s not all gloom and doom though – there’s reasonable evidence to suggest that this will pick up before long.
- Posted by Lauren on June 1, 2015 in Financial Tips
If you’re considering retiring to the beautiful, tropical Philippines, there are a few things you need to be prepared for in advance – it’s an incredible country, but there are a few downsides. In this article we’ll weigh up the pros and cons of retiring there.
About the Phillipines
The Phillipines is an archipelagic country consisting of over seven thousand islands. These islands span a total of 1840 kilometers south to north. It is part of the Southeast Asia region, and is bordered by Taiwan to the north, Indonesia and Malaysian Borneo to the south, the South China Sea to the west, and the Pacific Ocean to the east.
There are three main island groups in the Philippines. These groups are are Luzon, Visayas, Mindanao. The capital is Manila, and is located in the island group of Luzon. The time zone in the Philippines is GMT +8 hours.
Generally, the Philippines have a year-round a tropical climate. March to May is hot and dry. June to October is rainy, while November to February is cooler. The average temperatures range from 78F/25C to 90F/32C. Average humidity is 77%. The majority (83%) of Filipinos are Catholic and about 5% are Muslim. The rest are Buddhist or other Christian denominations.
Why retire in the Philippines?
The main appeal for retirement in the Philippines is the lower cost of living. Housing, food, and labour costs are a lot lower than in other nations. There are also good currency exchange rates, meaning that retiree’s money goes further. The Philippines extends a number of incentives to expat residents, including discounts for retirees over 60 and the duty-free import of household goods.
Another thing is that is important is communication. Almost every Filipino can understand and speak some English. Two official languages are Filipino and English. English is widely used and is the medium of instruction in higher education. The Philippines forms the third largest English-speaking nation in terms of population.
In terms of medical services, facilities are comparable to anywhere else in the world. The Philippines is renowned for having excellent healthcare. Other services such as telecommunications are good, and are improving constantly. Electricity is cheap in comparison with other countries, and is considered reliable.
However, moving to the Philippines is not for everyone. There is a frantic pace of life, which can take its toll on some people. There are also cultural differences that may put some people off.
Cost of living in the Phillippines
The Philippines’ currency is the Peso. Foreign currency may be exchanged in many places, including, hotels, department stores, banks and specialist money changing. International credit cards such as Visa, Diners Club, Bank Americard, Master Card, and American Express are also widely accepted.
Each year, International Living’s Global Retirement Index ranks retirement destinations around the world. Factors such as climate, healthcare, benefits and discounts, and cost of living are measured forming a basis for comparison. For the 2015 Index, the Philippines scored 92 out of 100 for cost of living. This placed the Philippines in the top 10 for cost of living, equalling Belize, Cambodia, Ecuador, Guatemala and Thailand. Only Nicaragua and Vietnam ranked higher for low cost of living, with a score of 100.
International Living estimates most expats can live comfortably in the Philippines for around $800 to $1,200 a month. By extrapolating this, a retiree with $200,000 saved can live for around 14 years with no other financial support.
Like anywhere else in the world, what you pay for rent in the Philippines depends on the location, size and condition of the property. According to the website numbeo.com, the average monthly rent for a one-bedroom apartment in a city center is $228.94; outside a city center the rent drops to an average of $124.77 per month. For three-bedroom properties, average rent is $394.53 (inside the city) and $240.59 (outside the city).
This means that price may be a factor on deciding where to retire in the Philippines. The best place to retire in the Philippines depends on your individual circumstances – what sort of house you want to live in, and what you want to be close to. Cities are closer to more amenities, however houses in cities are more expensive. Conversely, it is cheaper to live outside the city, but you will be further away from amenities.
Another option aside from renting is buying a condominium. This could be cheaper in the long run, especially if you plan on living in the Philippines for a while. Foreigners are prohibited from buying property in the Philippines, however condominiums can be purchased under the Philippine Condominium Act.
How to retire in the Phillippines?
To retire and move to the Phillippines, a Special Resident Retiree’s Visa (SRRV) is required. These are issued by the Bureau of Immigration (BI) of the Republic of the Philippines under the Retirement Program of the Philippine Retirement Authority (PRA) to foreigners and overseas Filipinos. It entitles the holder to multiple-entry privileges with the right to stay permanently/indefinitely in the Philippines.
There are two catergories of people that can apply for this, people with pension, or people without pension. People with pension must be 50 years old and above. They must deposit US $10,000 into a Filipino bank and have a pension being paid to them of US $800 a month for a single applicant, and US $1000 for a couple.
The second category allows people with out pension to move to the Philippines. If the applicants are aged 35 – 49, US $50,000 must be deposited into a Filipino bank. If the applicants are aged 50 years and over, US $20,000 must be deposited into a Filipino bank.
There are also exceptions made for former Filipino citizens, Ambassadors of Foreign Countries who served and retired in the Philippines, and current and former staff members of certain international organizations.
- Posted by Jason on May 31, 2015 in Market
Whether you’re pleased with the recent election results or not, it appears that the Conservatives are here to stay for a second term. But what does this actually mean for remittance senders in the UK? We’re going to take you through the implications of new Tory policies on sending money home, particularly for those of you who have become citizens and those who are new arrivals.
Taxation – Altering Your Take Home Pay
It’s no secret that your take home pay impacts exactly how much you can send home. The Conservatives have predicted that their tax cuts will benefit 30 million people, and anyone earning less than £12,500 will be exempt from income tax altogether.
One of the Tory’s key pledges is to legislation to keep those working 30 hours a week on minimum wage free from income tax. If you’re in this situation, you’re in luck – you’ll have more to send home via remittance.
If you’re earning a little more than this, you’re also in luck – the dreaded 40% tax threshold is to be increased from £41,450 to £50,000. This means that you’ll pay less tax if you’re earning more than £41,450, but less than £50,000 and you’ll have more money to send home.
The Conservatives have also promised not to raise VAT or National Insurance contributions across the board. While you won’t end up with more money in your pocket because of this, you certainly won’t end up with less.
The Conservatives have also promised working parents of 3 and 4-year olds 30 free hours of tax-free childcare a week. This means lower living costs for families and more money that can be sent home. It also reduces the costs of working – making employment a much more attractive option all around.
Unfortunately, some of the Tory’s immigration policies aren’t too migrant friendly. The most prominant policy requires that migrants, including those from the European Union (EU), live in the UK for four years before they are eligible for social benefits such as public housing and benefits. This higher threshold will likely hit new immigrants hard – allowing less money to be sent home to families in need. However, those who are employed in the UK will not be affected by this.
The Conservatives are also clamping down on immigration, with an aim to keep net migration at a 20,700 person cap annually on non-European immigrants. This is a huge cut compared to previous net long term migration of 298,000 immigrants in 2014. Such clamps will make it significantly harder for immigrants to gain permanent citizenship in the UK. The Tories will also adopt a “deport first, appeal later” system, making it even tougher for people to immigrate, along with language tests for those wishing to work in the public sector. However, provided you have skills that are beneficial to the UK economy, it should still be possible to immigrate.
The Conservatives also plan to hold a referendum to decide whether they should remain a member of the EU. If voters choose to remove Britain from the EU, any form of migration from Europe to the UK will become much more difficult.
There is also to be a crackdown on illegal immigration, in an attempt to tackle people trafficking and the exploitation of workers.
Benefits and Welfare
Since the new Tory policies encourage people to work, benefits have been reduced to compensate – after all, tax cuts must come at some cost to society. The party has specifically turned its focus on making working worthwhile – culling incentives to remain on welfare, and giving benefits (such as lower tax rates and free childcare) to those who do chose to work.
The maximum benefit that a household can claim is to fall from £26,000 to £23,000 (however there are still exemptions for those on Disability Living Allowance or Personal Independence Payment benefits). They also offer increased support to those transitioning from welfare back to work. These reductions are expected to save taxpayers around £12 billion – accounting for the tax cuts promised by the Conservatives.
In line with their focus on employment, the party plans to reach more or less full employment for those willing to work. This will be achieved through road, railway and infrastructure investment, creating jobs for tradespeople and labourers. Government funded childcare hours will also increase the demand for other professions also, such as education and day-care. Also, many resources are being allocated towards the environment – such as the £500m being spent towards making most vans and cars emission free by 2050. While there is debate as to how successful this will be, the use of funds will, at least, provide specialist funding for various scientific professions.
It’s important to remember that these policies are just that – policies. These are subject to change and realistic conditions (for example – achieving “full employment” may turn out to be less achievable than expected), however these are things as they currently sit.
Regardless of Tory policies and promises, you can still send money home. OrbitRemit offers low cost, attractive exchange rate transfers between the Pound and many other currencies. Check out our calculator on the top right hand side of the screen to work out exactly how much will reach your family!
- Posted by Tom on May 28, 2015 in Market
The Development Bank of the Philippines (DBP) is a government owned bank that finances projects within the economy in order to keep it growing. As the name suggests, its goal is to help to develop the Philippines in a way that’s sustainable. We’re going to give you an inside look into the DBP and cover what exactly it does, as well as who it helps along the way.
Financing Small Businesses
One of the key roles of the DBP is to lend money to small businesses, such as single proprietorships and partnerships for a period of 3 – 5 years. This allows the business to get up and off the ground, but also encourages competition in the economy – by allowing small firms to enter a market. Competition forces larger companies to stay on their toes and keep their prices fair – otherwise customers will start buying from the smaller businesses.
In order to be considered a small business, you must have a market capitalisation of below 15 million Philippine Pesos (that’s around USD $340,000 at today’s rate). Check out this link if you’re interested in knowing more: https://www.devbnkphl.com/devbanking.php?cat=107
Financing for Farmers
The DBP offers loans up to 90% of a project’s cost to farmers and fisherman to expand their farms through the Sustainable Agribusiness Financing Programme (SAFP). This money can be used to produce more food to help the Philippines become self-sufficient. Increasing the supply and availability of food through financing farming also allows for lower food prices, which aids the fight against hunger and poverty.
The DBP will make loans under SAFP for up to ten years. A full list of conditions and details can be found here: https://www.devbnkphl.com/devbanking.php?cat=322$f67f85a992e097d326eeb4a1c48238ed
Financing Transport and Logistics
As the Philippines consists of around 7100 islands, transport and infrastructure are pretty critical. The DBP uses its Connecting Rural Urban Intermodal Systems Efficiently (CRUISE) programme to address this – which finances the creation of different forms of infrastructure, such as aviation, roads and railways. The creation of roads, railways and airports creates work for people. This gives people more money to spend, which in turn, makes them spend more – greasing the wheels of the Philippines economy through injections of cash financed by the DBP.
As part of the lending process, the DBP encourages their clients to consider the environmental impacts of their business decision.
Efforts have been made to finance clean, green transport solutions and fuel supplies. (https://www.devbnkphl.com/devbanking.php?cat=232$da3bfc598bf207010320c6c5fa165576)
The DPB’s sustainable solid waste management programme aids the development of recycling, composting and residual waste treatment facilities. (https://www.devbnkphl.com/devbanking.php?cat=231$df6cfdfb9c8e74d87c74c87ffa345e33)
The DBP also heavily finances projects that prevent air and water pollution. (https://www.devbnkphl.com/devbanking.php?cat=230$f85bc4a38b2a838a8e3bca761449a03c)
This attitude is supportive of the DBP’s sustainable economic growth goal. While many countries are ignoring the idea of environmental sustainability, this is in favour of short term economic gains. With the DBP’s financing towards environmental sustainability, the Philippines will remain clean and prosperous for many years to come. Processes like recycling allow a more efficient use of resources – being able to reuse things means that we won’t run out as quickly! This helps to cut the long term costs of the economy through saving energy and the planet at the same time..
Social Services and Community Development Financing
The DBP supports education through financing school buildings, improving the quality of library resources and purchasing school supplies. This is important, as education is the key to improving the productivity and therefore growth of the economy.
The bank also provides loans to local governments and large groups to finance housing in the Philippines. This ensures that local bodies can supply enough shelter to house everyone in the community. This also provides jobs to builders, architects and tradesmen, keeping these professions in demand and passing money through the economy.
Healthcare is another priority of DBP financing, making loans to local governments for the purpose of upgrading medical facilities to benefit the community, particularly focusing on providing clean water, sanitation and adequate waste management. This ensures that the community remains healthy – which benefits the economy through a strong, healthy workforce.
The DBP offers an investment banking service (as well as financial advisory and investment consultancy services). You can also make the DBP your regular bank – so can lend your money out the above causes and pay you a small premium for doing so, and you’ll still have access to your money like you usually would, as well as through ATM withdrawals and electronic cash cards. You can also access the option to buy government securities, like Treasury bonds and bills, if you’re looking for a relatively secure investment.
Overall, the DBP is an important institution when it comes to financing projects that benefit the community. These projects grease the wheels of the economy – ensuring that money changes hands on a regular basis, which means that everyone earns a fair wage.
If you’re looking to transfer money to the Philippines, OrbitRemit offers low cost, attractive exchange rate transfers between the AUD and PHP. Check out our calculator on the top right hand side of the screen!
- Posted by Paul on May 27, 2015 in Market
If you’re looking at exchanging your Pounds (GPB) to Euros (EUR), you’ll probably want to know how the outlook for 2015 is looking. We’re going to take you through the day to day swings, as well as a few longer term projections for the pound to Euro exchange rate.
Central Banks and Interest Rates
The European Central Bank (ECB), like the Federal Reserve in the United States, is the central bank that controls monetary policy for the European Union. Likewise, the Bank of England controls monetary policy (which alters the supply of money in circulation) for the UK. One of the big drivers of any currency are interest rates, which are set by these central banks. A high interest rate attracts foreign investors who are looking for high returns on their savings. This increases the demand for the respective currency, pushing up its value. Many experts believe that the UK will keep its interest rates low – due to high consumer debts (as higher interest rates would make people more likely to default on these) and the end of an economic boom, largely thanks to, now retiring, baby boomers. The main rate currently sits at around 0.5% and the bank seems adamant to keep this where it is. Overseas investors are unlikely to deposit in UK banks at such a small rate, which will keep demand for the GBP low, but still relatively high compared to the Euro. The ECB is currently keeping its main rate at around 0.05%, with no particular plans to change this either. However the ECB is currently continuing its “stimulus” package – which means that it’s buying bonds from people in order to increase the money supply. This increase in the supply of money leads to lower general interest rates in order to encourage spending and investment. A lower interest rate decreases foreign investors’ demand for the Euro, pushing its price down against the pound, although not substantially. This is likely to continue over 2015, possibly even heading into negative territory.
Inflation (Or more accurately, Deflation)
Inflation erodes the spending potential of money, causing investor confidence to dwindle. Thanks to falling oil prices and low interest rates, UK inflation is pegged at around -0.1%, while the ECB is quoting a similar figure for the Eurozone. As the inflation figure is negative, it’s actually not inflation at all – it’s deflation. This may sound good – after all, if inflation erodes the buying power of money, deflation must increase the value of money. This is true – deflation does increase the buying power of money. Unfortunately it also increases the real value of borrowed money – not only are borrowers paying interest on a loan, but the money that they borrowed is worth less than when they first received it. While this increases the chance that people will default on their loans and makes people reluctant to borrow money. This causes a slowdown in economic growth and can even lead to unemployment, driving down the respective currency along the way. While it’s unlike that 0.1% deflation will have drastic effects on the European and UK economies, there could be vast consequences if it is to continue. The ECB is attempting to combat deflation using quantitative easing (QE), where the bank buys bonds in order to increase the supply of money in the economy and inflate the value (which would combat the deflation). If this is successful, investor confidence in the Euro may increase, causing it to rise against the pound.
Greece, as part of the “Eurozone” is currently undergoing somewhat of a financial turmoil. Currently facing a €320 billion debt through overspending, Greece is currently facing a large risk of defaulting on their debt. Unfortunately, these creditors happen to be a large number of European banks (including those from Germany, France and Italy). A high risk of default means that the banks may lose their money – which depositors have invested into the system. If this were to happen, the system would be in crisis. There are talks that Greece may leave the Eurozone, otherwise known as a “Grexit” and adopt its old currency, giving the government more control over fiscal and monetary policy (this is usually handled by the ECB for the whole of the Eurozone). If this were to happen, European stocks would decrease in value, decreasing the demand and price of the Euro compared to the GBP. It’s important to note that, if Greece did exit the Eurozone, and prosper, it may cause people to lose faith in the idea of shared currency (the Euro). This is somewhat unlikely, but would cause drastic global changes if it did occur.
Spain and Portugal have elections approaching towards the end of the year. This gives rise to political instability – as traders are unsure what the outcome will be. It’s somewhat unclear as to what effect this will have on the Euro, but political stability is safe and leads to confident investors, and a potential resulting increase in the price of the Euro. The recent British election has appeared to have stabilised the GBP and another term of David Cameron’s centre-right conservative party will likely allow minimal political surprises in the UK. If you’re looking to send money between UK and the Eurozone, you’ll want to watch the currency trends to ensure that you get bang for your buck. OrbitRemit offers low cost, attractive exchange rate transfers between the Euro and GBP. Check out our calculator on the top right hand side of the screen to work out exactly how much will come out on the other side!
- Posted by Jason on May 14, 2015 in Market
Foreign Direct Investment (FDI) in India is booming – but more in some industries than others. We’re going to take you through the ins-and-outs of the seven most popular opportunities for FDI in India. We’re also going to take a look at any restrictions or requirements you may run into along the way.
What is FDI?
FDI is an investment into a company, made by someone in another country – a Chinese company buying a mining company in Australia, for example. Generally, investors are looking to achieve a controlling interest in the company (the accepted minimum threshold, set by the Organisation for Economic Co-operation and development, is 10%). FDI is common and has taken place in India since around 1991 with the introduction of the Foreign Exchange Management Act.
Limitations of FDI
Recent policy measures place some restrictions on FDI in specific industries, such as a 49% limit in the defence sector. Public sector banks sit at 20% and broadcasting services as well as print media allow 26%. This restricts “outsourcing” of important public services – particularly the media, to overseas investors. (http://www.makeinindia.com/policy/foreign-direct-investment/).
Many sectors, such as power generation and telecommunications have zero restrictions – meaning FDI can flourish.
Some industries, such as gambling and atomic power prohibit FDI entirely, likely due to the fact that such practices are heavily regulated and restricted by the government.
Make sure to research into current economic climate before considering any form of FDI. India currently sits at an inflation rate of around 6.4%, meaning that you’ll require a much higher rate of return to keep afloat above the “eroding” power of inflation. Other issues, such as political stability can also influence investment too – so be careful of this.
Invest in India – Business Opportunities
FDI in telecommunications makes up around 6.9% of FDI into India. As mentioned above, there is no cap on this industry, and it falls under the “automatic route” and therefore doesn’t require the approval of the Reserve Bank of India or the Government. However, establishing a telecommunication network requires excessive amounts of capital (Telenor – a competing FDI telecommunications firm has claimed to have spent two billion dollars on this) and there is serious competition in the industry, despite being a service in high demand.
While India has recently disallowed multi-brand retail trade, single brand retail is still a viable industry for FDI (it has no cap either, but requires government approval beyond 49% investment into a company). Retail typically offers a somewhat small upfront capital investment (compared to other options, such as telecommunications) and therefore has somewhat lower risk. Retail is a particularly difficult industry to gauge for FDI however – as different culture, tastes and preferences will either require additional investment in research or mitigate the lower risk associated with smaller initial investment. Retail appears to be growing reasonably as an industry too – keeping it a viable option for investors.
Construction is the second largest area for FDI in India, weighing in at nearly 10% of total foreign investment. The Indian Government has recently relaxed FDI rules for the sector in an effort to attract more housing, hotels and townships into the country. Minimum cash investments have been reduced to $5 million, enticing investors with less cash who are prepared to take on less risk – making it more ideal for foreign investors.
India possesses the fifth largest electricity generation capacity in the world, but this doesn’t stop it running a shortage. It follows that FDI into electricity currently allows for some great opportunities for those willing to invest the high start-up capital requirements into the industry. India does not cap FDI in electricity, with 3.88% of total FDI surfacing in this industry.
5. Computer Software/Hardware
In recent years the computer software and hardware industries have been one of the fastest growing sectors in the Indian economy, making up around 6% of FDI. This makes it a solid industry to invest in – especially since it faces no investment cap. Software in particular can be created easily on a small scale, with relatively small upfront investment.
6. Drugs and Pharmaceuticals
Drugs and Pharmaceuticals make up around 5.24% of FDI in India. The industry is uncapped, but taking over existing projects requires government approval. This has become a very popular route for FDI in recent years, particularly considering the fact that healthcare is an industry that grows steadily with the population.
The Automobile industry accounts for around 5% of all FDI in India. Japanese companies, particularly Suzuki and Honda, are large players in this field, so competition is stiff. There are no restrictions on automobile FDI, but high start-up costs are to be expected. Considering the common process of vehicle exports, India has become more of an “export hub” in this area, rather than producing for solely domestic purposes. The Automobile industry also looks set to increase in size in coming years as population grows globally.
If you’re looking to transfer money for FDI, OrbitRemit offers low cost, attractive exchange rate transfers between the AUD and PHP. Check out our calculator on the top right hand side of the screen!