What’s the most effective way to convert money for spending during our trip? Here are the options I considered:

1. Bring Canadian dollars and convert to Philippine pesos at home
2. Buy US dollars and convert them to Philippine pesos at home
3. Buy Philippine pesos in Canada and bring them over (paying attention to import conditions)
4. Use our credit cards as much as possible, and carry a smaller amount of cash (see options 1-3 for handling cash)

Based on the online rates of Toronto Dominion Bank (TD Bank) and the Bank of the Philippine Islands (BPI), it turns out that it’s cheaper to buy US dollars in Canada and convert the US dollars to pesos when we’re in the Philippines (option 2). That results in 3% more money than bringing CAD and converting to PHP in the Philippines (option 1), and 8% more than buying PHP in Canada (option 3). This is good to know, because we used to buy PHP here. TD buys back US dollars but not Philippine pesos, so that’s handy too.

Even better than the cash rates, though, are our credit card rates. MBNA Smart Cash seems to have a foreign currency surcharge of 2.5% or so over the spot foreign exchange rate. With 1% cashback, that results in around 2% more than option 3. We’ll probably tally up our expected cash expenses, convert enough to cover them, then use our cards for the rest. I’ll still check with MBNA to make sure there aren’t other fees to consider.

Your results may vary depending on the rates. It’s good to do the math! =)