Friday, February 02, 2007

25% exchange fee for Korean won on Boracay Island -- Stupid tax?

I'm back in the land of the cold shower again (Kalibo), not a worry considering the heat around here, you do need to be a touch brave whenever you take a shower though. Submerging yourself in the rush of cold water can be quite a shock.

As I left Boracay I managed to check out a thing or two that travelers might find of interest. The exchange rates are not very good on the island, not for any currency, contrary to the lonely planet's Philippines guide.

Most especially, the exchange for Korean won is criminally poor -- 40 pesos per 1000 won! The going rate of exchange is 52 pesos for each 1000 won, that means that the thieves on the island are charging 12 pesos for each 1000 won exchanged (this is worth a little more than roughly 1 US dollar).

So, essentially, if you bring Korean won to the Island as the Lonely Planet indicates (by omission) it is safe to do, you will be paying close to a 25% exchange fee.

Luckily I was aware of this in the past and so I brought Euro with me, but I did not bring my Euro to the island of Boracay knowing full well that I'd get a better exchange rate in the tiny little town of Ibajay, Aklan than on Boracay. The best rate I have found so far was at a dumpy exchange counter in Makati, Manila--62 pesos/Euro.

Good news about the Bank of the Philippine Islands (BPI):

You may take out 20,000 Pesos(about USD $400)from the BPI bank machine at one time. Perhaps more is available in a single transaction, but most banks restrict you to about USD $100.

Up until recently the BPI bank would not do transactions with international banks on the "Plus" system it would only do transactions on the "Cirrus" system but now it seems to do transactions for both.

That clears up a question that I had about Korean banks also. I'd read on a Dave's ESL forum that Korean banks do not allow withdrawals from bank machines in other countries.

I cannot speak for all banks but I can speak for Shinhan bank. I didn't ask for a special card, account or anything like that and I've been able to take close to 600 USD out of my Korean bank, here in the Philippines so far. Naturally I had that much cash in my account before I flew here. Cash advances on your credit card are a possibility on Boracay island, as well, but they charge between 7 and 10% service charge for this, as all the businesses on the island do for any credit card transaction.

My advice is to bring a little cash in case of emergency, exchange it in Manila before you get to the island if possible and bring your bank card. Don't exchange your money for pesos in your home country as the peso rate is usually even poorer there than it is on the island -- except of course for the rate in Korea (47 pesos/1000 won) which is much better than the 20 odd percent they charge on the island.

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