Photo by Nedret Binici on Unsplash
Remitting Philippine Pesos directly from overseas to recipients in the Philippines is a growing option, thanks to digital platforms that offer speed, convenience, and competitive exchange rates. But while this method may seem efficient on the surface, it has broader implications, especially when viewed through the lens of the Bangko Sentral ng Pilipinas (BSP) and the nation’s financial outlook.
When a sender converts their funds into Philippine Pesos before sending, they often lock in a favorable exchange rate in their home country, avoid surprise conversion fees for the recipient, and simplify the transaction by delivering pesos directly to local banks or mobile wallets.
Apps like Wise and Remitly, as well as services like Western Union, make it easy to remit in PHP, especially for families relying on quick cash pickups or digital deposits.
While this is great for recipients, it presents a challenge at the macroeconomic level. If the conversion happens abroad, the foreign currency never enters the Philippine banking system. As a result, the BSP cannot record it as a foreign exchange inflow. Remitting in pesos does not contribute to the country’s gross international reserves, thus weakening the country’s balance of payments position, even as actual money flows into the country.
This distinction is why the BSP and policymakers prefer that remittances be sent in foreign currency and converted within the Philippines.
The balance of payments is a summary of the Philippines’ financial transactions with the rest of the world. It includes goods, services, investments, and remittances. When remittances are sent in foreign currency and converted domestically, they strengthen the current account and boost foreign reserves, which are essential tools for supporting the peso and maintaining economic stability.
In contrast, peso-denominated remittances do not receive this benefit. The BSP can still track the flow of funds, but it misses out on the foreign exchange component.
In 2025, the Philippines is expected to continue seeing strong remittance inflows, projected to reach $35.5 billion in US dollars. Even with some global uncertainties, remittances continue to be a vital pillar of household income and economic resilience. That said, how these funds are transmitted—whether as dollars or pesos— affects the broader financial picture.
Remitting in pesos is often more convenient for individuals, but remitting in foreign currency provides measurable benefits for the broader economy. It’s a subtle decision, but one that significantly impacts the nation’s financial health.
Each year, millions of Filipinos working abroad send money back home—an act of love that keeps households afloat, enables children to attend school, and fuels the local economy. But the method by which this money is sent is more than just a technicality. It carries weighty implications for our country’s financial resilience.
“Remitting in pesos is often more convenient for individuals, but remitting in foreign currency provides measurable benefits for the broader economy. It’s a subtle decision, but one that significantly impacts the nation’s financial health.”
These days, remitting in Philippine Pesos has never been easier. With apps offering real-time transfers and locked-in exchange rates, it’s tempting to convert your dollars, euros, or yen overseas and send pesos straight into your family’s mobile wallets. On the surface, it seems like a win-win: save on fees, speed up delivery, and simplify life for your loved ones.
However, what we’re not discussing enough is that when the conversion occurs outside our shores, the foreign currency never enters the Philippine banking system. And that matters.
The BSP relies on foreign exchange inflows to strengthen its gross international reserves. These reserves are our country’s financial safety net, helping stabilize the peso during global shocks and maintain investor confidence. When remittances arrive in dollars and are exchanged locally, the BSP records them, the reserves increase, and the economy breathes easier.
But when those same remittances arrive pre-converted in pesos, the story changes. The money still helps families, sure—but it skips over our central bank and evaporates from the national accounting. The act of kindness still happens; the macroeconomic boost does not.
In 2025, remittances are expected to reach thirty-five and a half billion dollars. That figure should be a triumph, not a footnote. And yet, without accurate tracking, we risk underestimating the very force propping up our economy.
Remitters deserve convenience, but they also deserve transparency. It’s time for financial platforms to make clear what is gained and lost with each tap of a currency button. Better yet, it’s time for a national conversation. Because, with every dollar withheld from our reserves, we unintentionally weaken the very foundations we rely on in times of crisis.
Supporting the Philippines doesn’t stop at sending money home—it includes how we send it. Let’s choose the path that uplifts not just households, but the nation as a whole.
The corollary is also true. When the nation we support with remittances fails or refuses to acknowledge the actual impact of those remittances and continues to deny overseas Filipinos their fair share of the levers of economic control, it then denigrates the relationship between the recipient and senders. It deteriorates into exploitation, starting with the opacity of the economic activity being generated and relegating the senders of foreign exchange to the role of consumers instead of owners. Whether this relationship is borne of benevolent ignorance or designed subjugation remains an open question.
The recent movement by advocates for the transition of ownership of the Overseas Filipino Bank from Land Bank to overseas Filipinos, if only as a basic recognition of their contribution to the nation, is a good starting point for ultimately enabling the Filipino diaspora to reap the rewards that rightfully belong to them. In the process, the Overseas Filipino Bank will become the tool of choice to achieve a more just, fair, and equitable distribution of wealth in the Philippines’ history.
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ABOUT THE AUTHOR: Dr. Crispin Fernandez advocates for overseas Filipinos, public health, transformative political change, and patriotic economics. He is also a community organizer, leader, and freelance writer.
