Kadayawan Festival in Davao City on the island of Mindanao, Philippines

Retiring and expat living in the Philippines has been gaining momentum among the more developed Asian countries. Many Americans have also voted for a Philippines retirement. It is not unusual to find American, Japanese, or Korean expatriate communities throughout the country.

Expats Living in the Philippines: The Economy

The Philippines seems to be on the verge of becoming another one of Southeast Asia’s economic tigers. There is a considerable amount of foreign investment coming into the country and the country appears to be developing rapidly.  Costs of living tend to be higher in the larger cities, but very affordable in the smaller cities. The International Cost of Living Index ranks the Philippines at 0.226 in comparison to the United State’s ranking of 1.000. As a general rule of thumb, a Philippines retirement will mean that you cost of living will be about a fifth to a fourth that of the USA.

Today, the Philippines economy is also very much tied to the global economy. The country has a very large number of overseas workers who remit a considerable amount of money back to the country. Despite the strengthening of the peso in recent years, this creates some incentive to keep the dollar to peso exchange rate somewhat stable. Should the peso gain too much strength against the dollar, it would have a major impact on the Filipino families receiving overseas remittances from America.

Retirement and expat living in the Philippines seems to appeal to many of the more developed Asian nations. Companies from Japan, Korea, and China have made major investments in the country. It is not all that uncommon to see Chinatowns and Koreatowns springing up in the country. Of course, many Americans have been attracted to a Philippines retirement as well and one can find their expatriate communities in the major cities of Manila, Cebu, and Davao.

Expat Living in the Philippines: Filipino Cuisine

If you are watching the Travel Channel a lot, one might be given the impression that a Philippines retirement translates into eating tree worms. But that is not a complete picture of dining in the Philippines. Partly because of the large number of Western and Asian expatriates in the country, one can find a wide range of highly international dining options in the country that ranges from your ordinary Pizza Hut pizza to fine Chinese cuisine. This is particularly true in the larger cities. And, as odd as it may seem, McDonald’s will even deliver Filipino style spaghetti to your home, if you so desire. As one becomes more acclimated to retirement life in the Philippines, the expatriate will discover unique Filipino cuisines in the different regions of the country.

Food from open markets will be considerably cheaper than in the high end supermarkets and there is an abundance of street vendors selling a wide range of foods. Fresh agricultural produce, poultry and fish are widely available for those having to manage their diets. Pork is a major ingredient in Filipino foods, and will be found in a variety of forms: from roast pork with cracklings, to tamarind flavored pork soups, to very basic pork and beans dishes.

Expat Living in the Philippines: Housing

On a Philippines retirement, a pensioner can live very comfortably on $1,000 a month. Those living in more rural areas, can do so on a much smaller budget. If living in an upscale gated community and driving your own vehicle, a budget of $2,500 may be more realistic. A thousand dollar a month budget includes the cost of your rental, utilities, food, transportation, and other incidental expenses. By utilities, I mean electricity, water, cable television and dsl internet access. If you need one, of course you can easily throw in a maid.

A fully furnished four bedroom house in a gated and security guarded subdivision  might run in the area of $800 a month. On the other hand, a retiree could find a similar four bedroom home 30 minutes outside the city renting for less than $400 a month. Take away the furnishings, and prices drop even further. It is not inconceivable to find an unfurnished three to four bedroom unit renting for less than $200 a month outside of the city.

Although a relatively new concept, there are a handful of Philippines retirement communities being developed. Many of these are targeting the Japanese market, but it is likely to be a trend that continues into the future and begins to target the American market as well. These communities provide not only housing, but medical and entertainment services (e.g. golfing) as well.

Expat Living in the Philippines: Healthcare

The quality of healthcare is rapidly improving in the Philippines. The country is pursuing medical tourism as part of its economic development strategy.  As a result, some of the better hospitals are receiving international accreditation (JCI). The quality of care at these accredited institutions are as good as in American hospitals. The Philippines is also in the early stages of developing facilities designed to provide long term care for foreigners. It is anticipated that this will continue to grow as both Japan and the USA continues to age.

There are both public and private hospitals that provide healthcare, and smaller clinics are spread throughout the countryside. Access to pharmaceuticals is not difficult as there are no shortages of pharmacies. However, the price of brand name prescription medicines is one of the commodities that is not significantly cheaper in the Philippines.

A Philippines retirement means access to quality medical and dental care at very affordable prices. However, most expats living in the Philippines will opt for medical care in a private hospital which will be more expensive than public hospital care. Payment is on a cash/credit card basis upon receipt of medical services.

Expat Living in the Philippines: Social and Political Environments

Over the past couple of years, the Philippines performed better than most countries in Asia with steady growth and reduction of foreign debt. The current administration seems to be fairly progressive, but the President has admirers and detractors. Still, the positive growth seems to suggest that the country is headed in the right direction.

The Philippines has a less than stellar reputation for doing business however. Laws restrict foreign ownership of land and business. And the country sometimes does have exciting scandals related to political corruption. Nevertheless, for the right businesses, the country offers many advantages that still attract a significant amount of foreign investment into the country – but much less than say, neighboring Hong Kong.

The island of Mindanao is the primary area where there are occasional eruptions of separatist movements. Following the collapse of legislation that would have given Muslim political groups more autonomy, there was a brief flare-up of unrest. However, it seems to have calmed down. Overall, there does not appear to be widespread anti-government feeling on the island. Most Muslims appear integrated into the economy and probably prefer peaceful rather than revolutionary development of Mindanao. Travel to the larger cities of Mindanao such as Davao, Cagayan de Oro, and Zamboanga is relatively safe. Travel to the smaller and more rural towns where problems have occurred is not recommended for the casual tourist or the new Philippines retiree.

Perhaps one of the greatest concerns to a retiree is the safety of the country. It is often difficult to sort through dramatic headlines and the actual statistics of the country. While no statistical measure is ever perfect, the data does suggest that the Philippines is a relatively safe retirement destination. For example, the United States has an intentional homicide rate of 5.5 homicides per 100,000 people. The Philippines has a rate that is 4.3 per 100,000. From a national perspective, it seems safer than the United States.

However, one must keep in mind that these statistics are national averages. In the Philippines, like any other country in the world, crime rates tend to be high in the larger cities and much lower in small cities. It is probably safe to say, that the risk of being a victim of crime is no better or worse to comparable areas in the US.

In other words, crime rates can be expected to be low if you live in an upscale gated subdivision, a suburban community, or small town whether in the USA or Philippines. On the other hand, in the areas of the city where unemployment and poverty is high, one can expect relatively higher crime rates whether one is in Manila or Los Angeles.

Expat Living in the Philippines:  Transportation and Communication

Transportation should not provide a problem for a Philippines retirement. Transportation networks throughout the country are well developed. International flights to Manila and Cebu are available and a number of local airlines provide flights that connect the cities within the country.

Within any city, public transportation will include buses as well as privately operated taxis, jeepneys, and motorized tricycles. Fares are relatively cheap and one really does not need to own a vehicle to get around. There are also pedicabs (tricycads) available running on human power.

Ferries are available for interisland transportation. However, it may be best to avoid them during rough seas or hurricane weather.

A Philippines retirement also means being plugged into the global communications system. Although a developing country, the Philippines is fairly well wired into modern telecommunications systems. In part, this may be due to the large number of Filipinos living abroad. In country, it seems that almost everyone has cell phones, but instead of calling it is often used for texting.

Internet cafes are found throughout the country, even in the smaller cities and getting plugged into the internet is no problem. DSL connections through phone companies are available. Higher speed internet and voip cable service is available, but primarily in Manila.

Cable television service is available countrywide and it is possible to get American channels such as HBO and American sports. Television channels include not only Filipino shows, but programming from around the world – again reflecting the increasing cosmopolitan nature of the country. Korean soaps are particularly popular.  To put things in perspective, the Facebook social networking site, probably has more Filipinos per capita participating than any other country – including the USA. Filipinos are very well connected into the global telecommunications network.

Expat Living in the Philippines: Summary

Strengths: The low cost of living is one of the most attractive features of the country. Despite these lower costs, a Philippines retirement will still provide access to the modern amenities that Americans will desire. The country is relatively stable politically and the truly cosmopolitan nature of the country makes it a desirable retirement destination. As a former American colony, English is widely spoken.

Weaknesses: There are occasional problems on the island of Mindanao with Muslim separatists. There are also a number of natural hazards such as typhoons (hurricanes) and volcanoes to be aware of. For the most part however, most of these risks are manageable.

Analysis: The Philippines is one of the best places to retire in the Southeast Asian region. The lower cost of living combined with the tropical climate and beaches makes the country a good retirement destination for expat living.

(photo by: Keith Bacongco)

References and Bibliography

Muslim Separatists in the Southern Philippines, Asia Society

People and Culture in the Philippines, Dept of Tourism, Philippines

Philippines Cuisine, AsiaRecipes

Philippines Economy. Economy Watch

Philippines Seen to Double by 2020, Inquirer Business