Higher exchange rate drives OFWs to remittance centers

The escalating value of the United States dollar against the Philippine peso is unusually driving Filipino workers in the Northern Marianas to remittance centers to apparently take advantage of their earnings’ stronger buying power when sent to their families back home.

Remittance companies that cater to the huge Filipino community on the islands reported bigger volume of workers from the Philippines have been trooping their centers since the peso started slipping beyond P44 per $1 early this year.

Again, remittance companies are anticipating a much bigger number of Filipino workers dropping by their centers to send hard-earned greenback which is now equivalent to almost P45 for every dollar.

Pressured by negative sentiment over low interest rates and tight dollar liquidity, the peso hit a 30-month low against the U.S. dollar, hitting $45.150 Tuesday. The peso’s sharp fall was also blamed on President Estrada’s earlier comment that he hoped the dollar would not hit P45.

PNB Foreign Exchange manager Raul S. Boongaling disclosed the company’s remittance centers throughout the islands are witnessing higher volume of transactions due to the persistent decline of the Philippine currency’s value weighed on the American greenback.

Although the Philippine peso bounced back and ended at P44.82, exchange rate in the Northern Marianas average only P43.50 because of its value’s volatility, which fluctuates in each trading.

Mr. Boongaling explained the Philippine Central Bank has set up a dealing system which establishes the guiding foreign exchange rate in the country’s banking industry.

The Philippine Dealing System controls or regulates the maximum amount a foreign currency can be traded with the peso. The country’s currency closed at P44.82 on the PDS Tuesday, higher from the previous day’s trading at P44.30.

According to Mr. Boongaling, exchange rate in the Northern Marianas is lower compared with the level in the Philippines because of the operating expenses incurred by remittance companies in its delivery.

Despite this, dollar-to-peso remittances continue to embrace the bulk of the transactions made by Filipino workers in the islands. Higher dollar also spurred growth in the remittances of Filipino workers during the first three months of the year.

In the first quarter of 2000, the commerce department noted an increase in the dollar remittances of Filipino workers at $11.215 million from the previous year of the same period’s $10.989 million.

Workers from the Philippines remain the largest market in the local money transfer industry with seven of the 10 licensed remittance companies in the CNMI exclusively catering to the Filipino community.