Currency Conversion ??

[coral cowgirl]

With the dollar showing good against the Philippine peso, I was wondering about planning a trip to the Pacific.

I noticed the resort gave the rates in pesos, with the notation that they will use their "resort rate." I guess they have a standard flat rate to allow for fluctuations in the peso???

I noticed they haven't changed their rate since the dollar strengthened again the peso. So, would it be a good idea to maybe just change currency in Manilla on the way, and then pay the resort in pesos instead of dollars?

(Asia Trip Newbie)

[PaulThomas]

You'll like this answer: it depends

It's a pretty simple problem to resolve. Compare the cost if you paid in $ versus the local currency, including transaction cost (that cost varies depends on who you use, how much and when). If the price is equal, pay in $ and use you CC because you should get cash back or be part of some kind of program).

[CODMAN]

Personally, I've rarely seen "resort" rates be decent compared to changing money yourself. They'll often take an extra part for themselves off the transaction (some exceptional dive operators don't; cheers to them). But you should obvious look into that yourself. Where are you going in the Philippines? Depending on the availability of ATM machines and banks, it could be a better option to get your own pesos and avoid the extra charges. Then again, many diving locations don't have this option so...

Lucky girl... I'm dying to return to the Philippines...

Cheers!

CODMAN

[gbrdiver]

My observations over the years:
-Most dive centres don't take credit cards-those that do add between 4-12% depending on their bank (and normally want copies of your card and passport.)
-Centres that quote in US$, actually mean they want Pesos at the prevailing rate (normally their rate; which means you will lose.)
-Changing $$ to Pesos outside Manila is a nightmare.
-ATM machines often have strange daily limits for foreign card withdrawals
-An amazing amount of ATM machines haven't been filled with cash for months.
-If you have a stackload of Pesos life will be very easy!!

[kong]

Another thing to consider would be whether or not your bank charges you anything for currency conversions on your credit card. When I was living in Japan, I would pay for items quoted in Yen on my Visa and the bank was pretty good about converting it and the going rate but then they would tack on a 2 to 3% conversion charge.

I would either try to guess how much money you think you will need and convert it at a bank before you leave. If you need more cash once they get there I would stick to a bigger bank to avoid being ripped off too badly on the rates. Just don't convert it at the airport and you will probably be ok. But differently pay for everything in the local currency.

[CODMAN]

GBR has a good point; the ATM machines in the Philippines often have a 10 000 peso a day limit for withdrawals, which makes using these for large amounts a hassle. Not to mention some places don,t have ATMs...

When I was staying in Sabang, I used the tourist office to take advances on my credit card (was the cheapest way) and it only cost an extra 4% I believe. But luckily, my dive operator took credit cards and didn't charge you any surcharge (they did need to charge you tax though, which is normal). They were one of the only ones doing that over there...

I personally didn't feel comfortable having a large amount of cash over there for my spending needs so I tried to use my credit car as much as possible and withdraw maybe a few hundred $ at a time. But I was staying for 5 weeks, so my need of money was certainly greater than that of someone staying for a week!

Hope this helps a bit!

CODMAN

[Quero]

Here's a somewhat different answer that may or may not apply to the case at hand but that I sometimes see here in Thailand.

Some ops adopt a conversion rate at the beginning of the season and just stick to it irrespective of what (minor) fluctuations the currencies cited undergo. So when these ops publish their rates in USD or EUR and then convert to THB, both the USD/EUR and THB rates are maintained throughout the period (unless something drastic happens with the currency markets) even though the daily rates are not strictly reflected in the ratios. The reason ops do this is generally not because they are trying to scam divers; it's partly because they have contracts with agents and the rates cannot fluctuate over the contract period and partly because banks impose commissions on local businesses for doing currency exchanges (the bank wants its percentage, regardless, and the business needs to account for the actual amount owed by the customer rather than some percentage less).

Other ops change their local currency prices in accordance with the daily fluctuations of currency markets and therefore don't publish prices in the local currency.

You may have to make some rough calculations to figure out which way will save you a few bucks--changing money at an exchange booth, withdrawing from a local currency ATM and paying in cash, sending a wire transfer ahead of time to take advantage of favorable rates, or just paying directly to the op in USD (travelers' cheques or cash) at whatever rate they have established. As for credit card payments, those are almost always charged in local currency according to a bank rate, and yes, we typically add a percentage that our banks charge to us on each transaction for having a credit card machine. Here in Thailand it's about 3% for visa and mastercard, and it goes to the bank, not the op.

[coral cowgirl]

1) "I would either try to guess how much money you think you will need and convert it at a bank before you leave."

2) "...sending a wire transfer ahead of time to take advantage of favorable rates,"
________________________________
Those two options would work for me I think. After all, the BIG CHUNK is the airfare!

[PaulThomas]

It doesn't have to be expensive and some resorts don't change their rate because they've locked in their exchange rate, not because they're lazy. Savvy resorts will just buy a forward contract or an option so they'll know what they'll be able to change at.

Changing and wiring money with your bank can also be very cheap, it just depends on the bank and your relationship with them. In the last quarter, I've made several exchanges in which I changed Euro to $ and wired it over here. The most expensive fee, including the international wire transfer, was ~$70.00 on ~$250k which I thought it was more than fair.

[CODMAN]

Oh, and 1 more detail that might be of importance! You're not allowed bringing more than 10 000 pesos into the country cash! There is a big sign at the airport and I was sweating since I had 20 000 on me!!! But they didn't even ask me about this and let me through without any hassle... Still, had I known, I wouldn't have brought that much cash with me! getting 10 000 pesos seised would not have started my trip very well! Just so you know...