By Blair Pedersen, OrbitRemit
AUD to PHP exchange rate: hidden factors that affect your remittance
Exchange rates are affected by many things. This article is going to discuss the factors that will affect the AUD to PHP exchange rate so that you can make every remittance count for more.
Factors that affect the AUD to PHP exchange rate
Economics is an extremely complicated topic that is based on a very simple principle: supply and demand. The rate at which you exchange your Australian dollars to Philippine pesos is dictated by economic factors. In the long term it could be the strength of the housing market, growth of the economy, the broad economic outlook and many more. In the short term it could be unfavorable media attention on a prominent politician, media speculation about a trade deal and more. As previously mentioned, economics is an extraordinarily complicated topic that directly affects the AUD to PHP exchange rate.
If you have studied economics or know even a little bit about foreign exchange markets, you’ll understand that events that make the news sometimes influence exchange rates. This is called ‘geopolitical activity’. For example, when president Duterte was negotiating a trade deal with China & Russia in 2016, the Philippine peso became less valuable against most major currencies around the world. Geopolitical activity has a significant influence on what direction the AUD to PHP exchange rate will be. However, it is not the only influence.
Philippines peso rate history
There’s no better predictor of the future than knowing what has happened in the past. Although history will never repeat, there are clear patterns that can be interpreted that can give you a clear indication of what could happen in the future. That’s why you get prominent historians like Yuval Noah Harari writing some of the most popular futurist books of our time. How does that relate to Philippines peso exchange rates? There are many websites that show the history of the exchange rate and offer a commentary about why it changed as it was changing. They are a valuable resource if you are studying the exchange rate as they’ll give you a deeper understanding why the markets move as they do.
Spread from the various remitters
Every online money transfer company will be offering a slightly different rate to the next one. This is because they all work with the ‘interbank rate’, which is the FOREX exchange rate that is offered between banks. The ‘interbank rate’ is the lowest point that the PHP exchange rate can go. When you remit to the Philippines, the rate that you get given by an online money transfer company will be slightly higher than the interbank rate. The difference between the Interbank rate and the rate offered by companies like OrbitRemit is called the ‘spread’. The spread will be different between international money transfer companies.
Online remittance fees
When you remit to the Philippines you are most likely going to have to pay a fee. Like with the spread, the rate will be slightly different from company to company.
Personal situation: working in Australia
Australia is known throughout the world as the land of plenty. With an average full-time salary of $87,209AUD per annum, it’s easy to understand why Australia has one of the highest standards of living in the developed world. This makes an Australian working visa a coveted asset that can help an individual immensely. There are skilled labour and professional shortages across Australia opening many opportunities for migrant workers from the Philippines.
Opportunities for Pinoy workers
The type of work that you have is going to influence the way you remit.
Being a contractor can be very lucrative, especially in industries like mining where labour is scarce, and wages are much higher than average. If you are contracting, you will receive large amounts of money very quickly. However, there is no reward without a certain degree of risk and the risk of taking a contract is that when it comes up for renewal, you may be out of work.
Having a full-time contract is going to give you a different mindset to that of a contractor. Full-time workers are protected by employment law and they’ve got the added benefit of knowing what their hours and income will be for the foreseeable future. You probably won’t make as much money as you would if you were a contractor, but you will know for sure that your money will be coming in week by week.
Whether you’re contracting or a full-time worker, you need to choose the best way to remit that works for you. Of course, you can see that these two examples give each circumstance a certain set of needs to be fulfilled that are slightly different from the rest.
The reason why you are sending money back to the Philippines
There are many reasons to send money to the Philippines. You may be paying a student loan, contributing to your family or paying a mortgage. Picking the right exchange rate can make your money count for more if you are planning on sending tens of thousands of dollars or more to your home country. With larger amounts of money, the difference between a few points’ movement is much more noticeable than if you were to send a few hundred dollars.
There are many things that affect the AUD to PHP exchange rate
When you send money to the Philippines you want the best exchange rate possible. Understanding how the markets move is a very complicated process that many people around the world have spent years studying. It can be fun to study if you like world events, economics and geo-politics or way too complicated if that’s not your thing. Also, check the Philippine peso php rate history to see what it has been doing and whether there is any indication it will move up or down again.
Remember that each remitter uses a combination of spread and transfer fees that count towards the remittance fee. It’s important to consider individual circumstance including which includes your working and family situation. Once you have it all figured out you can choose to apply a strategy when sending or go ahead and do it your way. At the end of the day, risk and rate tolerance are going to be the biggest factors that affect the way that you remit and it’s up to you to choose how to manage it.