Your decision to keep your savings in either pesos or US dollars depends on your financial status and goals. This becomes clearer when you make your Statement of Asset and Liabilities (SAL) and Personal Income-Expense Statement (PIES) and write your financial plan.
If your plan requires that you spend in pesos in the future, there seems to be no reason for you to keep dollars as your savings. Aside from this, dollar placements have lower interest rates compared to the Philippine inflation rate. You should always earn a higher rate than the inflation rate to make your money grow. Otherwise, the value of your savings will stay the same or may even go down.
This is why you will only gain from investing in dollar placements if the Peso-Dollar rate continues to decline at a rate that will more than make up for the low dollar interest rates.
Foreign exchange is a tricky subject. As in any investment, spread your risk. You should not put all your savings in foreign exchange unless perhaps you plan to live abroad. You must be very clear about what you want to achieve every time you invest. Pay close attention to the amount you expect to earn and length of time you expect to achieve this.
FRANCISCO J. COLAYCO is an entrepreneur, a venture developer and financial advisor. He has over 40 years of experience that covers service contracting in the Middle East, manufacturing, trading construction, shipbuilding, management consulting, banking and financial services. He is the Chairman of the Colayco Foundation for Education (CFE) and the author of bestsellers: Wealth Within Your Reach (2004 National Book Award for Business and Economics), Making Your Money Work (Nominated in 2005, National Book Awards Business and Economics), Pera Palaguin Workbook and Money for Kids. The books are available at National Bookstore, most other bookstores or directly from CFE. He joins our website blog to share with ordinary income earners, Overseas Filipino Workers (OFW) and students the simple principles to "Save what you earn and grow what you save." CFE conducts talks, seminars, and workshops. “Managing Personal Finances For The Future” a seminar-workshop developed in partnership with the Ateneo Graduate School of Business, Center for Continuing Education. June 21, 2008, Saturday, 9:00 am to 6:00 pm. For registration and inquiries, please call Marleth Calanog at 830-2050. CFE is also the producer of the PISObilities DVD series, available at your favorite audio-video shops in May 2008. Learn more about the advocacy at http://www.colaycofoundation.com/, email info@colaycofoundation.com, via SMS +63917-8537333 or through (632)637-3741.
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