Currency Exchange Places in the Philippines - How do they make money

[DELTAFOXTROT 56]

Has anyone owned a currency exchange place in the Philippines?  I was curious how they actually made money?

 

When I used to spend time in Cebu, there was a local expat bar where you could text a guy and he would come to the bar and exchange US Dollars to Pesos at a fairly good rate compared to other black market money exchangers.

 

I see exchange places like at malls, at local Western Union places, and NAIA airport at the Terminal 1 in the secured area after landing they always have pretty darn good exchange rates and they can do large amounts anytime of the day

 

I was just wondering how these exchange places actually make money.

 

[top_secret 2,425]

Some have long speculated that profit is often not the direct motive but rather laundering large amounts of ill-gotten or untaxed Pesos into stacks of more desirable hard currency is the greater goal.  Otherwise, you can see the spread between their buy and sell rates and calculate their potential profit on the exchange.  To me the risk vs reward never seemed to add up either.

[DELTAFOXTROT 56]

22 hours ago, top_secret said:

Some have long speculated that profit is often not the direct motive but rather laundering large amounts of ill-gotten or untaxed Pesos into stacks of more desirable hard currency is the greater goal.  Otherwise, you can see the spread between their buy and sell rates and calculate their potential profit on the exchange.  To me the risk vs reward never seemed to add up either.

Interesting, You maybe on to something there about the laundering of money, that would make sense to me.

[AlaMike 231]

They make money from giving out a lower exchange rate than what is available at the large bank exchanges.

Right now the current rate is 56.01 PHP to 1 US Dollar. The exchange rate at Ninoy is around 51.8 to 52. 

In the provinces you can expect to get even less and sometimes they don't have enough. 

I even got a great exchange rate at the casino across from the Holiday Inn Express - Newport. I guess they though I was going to use it in the casino.

The first time I went I did the exchange at my personal bank and the exchange rate was exactly as the national rate. I will never do this again! Having to keep up with 200+ thousand peso's is nothing I want to try again. My wallet wasn't designed to hold that much. 

[RufusDawes 12]

they buy low and sell high, they exchange in so much volume that they only need to skim a little to make money

Edited September 25 by RufusDawes