Paul has a question

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The other day, I got an e-mail from a self described “keen follower” of this site, his name is Paul.

Paul had a question regarding the costs of living in the Philippines.

Of course, cost is an important consideration for those planning to live here, unless they have a large budget.  But, for most potential residents of the Philippines, cost is something that they have to consider and take into account when they make their decisions on where to live, lifestyle and other such matters.

Paul has a question

Paul has a question

Let’s see what Paul had to say:

Hi Bob,

Flowers from WowPhilippines

I am a foreigner living in Japan, and a keen follower of your Web Magazine.

I am considering retiring to the Philippines is about 14 years time.

Your book’s tiltle Retire like a King on US$1200 is based on what? Current prices at the time the book was written? Does it allow for inflation?

I believe the inflation rate for the Philippines is running at about 7% per annum?

In ten years from now how many dollars would I need to live like a king? I could do the calculations, but from your experience how have prices differed since you set foot in the Philippines?

Hi Paul,

Thanks for writing!  Nice to receive your questions.

Actually my book’s title is not “Retire like a King on $1200 per month.”  In fact, I never even mention the figure $1200 per month.  The title of the books is:  “Retire like a King, and do it on a reasonable budget.”

That said, though, you can retire here on $1,200 per month at this point, but that amount would be a bit tight.  It is doable, though.  I tend to recommend $1,500 as a better level for your retirement, though.

Yes, of course the cost will grow as time passes, and that would be true anywhere in the world.

You are right, inflation in the Philippines is running about 7% right now.  It has been higher than that in the past.  I first moved to the Philippines permanently back in May of 2000.  I would say that prices have at least doubled, and in many areas have tripled in that time.  Of course fuel prices are the primary one that come to mind, and gasoline has quadrupled here since we came here… but that’s not a Philippine thing, it is a worldwide problem.

You can still live a decent lifestyle at a relatively small cost here…. just not as much as 10 or 15 years ago!  It is something that is fading… but still achievable for now.

Good luck to you, Paul.

Post Author: MindanaoBob (936 Posts)

Bob Martin is the Publisher & Editor in Chief of the Live in the Philippines Web Magazine. Bob is an Internet Entrepreneur who is based in Davao. Bob is an American who has lived permanently in Mindanao since May 2000. Here in Mindanao, Bob has resided in General Santos City, and now in Davao City. Bob is the owner of this website and many others.

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Comments

  1. says

    Ha! He’s moving here maybe in 14 years? He’s worried about Philippine inflation?

    Unless his savings and income are in Philippine peso, he better be worried about the exchange rate.

    When I first moved here in the mid-1990s I had expat compensation package that included US$1,700 per month for living expenses. And that didn’t include a car; I had access to the company car. Exchange rates were about 28:1 so that that gave me less than P50,000/month which is very low for expat living in Manila.

    But within a couple of years the exchange rate had gone to about 45:1, so that gave me about P75,000/month. A bit better.

    My point here is that there were movements in Philippine inflation during that period, and US inflation. But those paled in relation to the exchange rate movements.

    Exchange rates can go either way. In the past couple of years that have trended in the wrong direction for expats. And that’s a bit unusual. But if you’re looking out 14 years, there’s a huge uncertainty on exchange rates. And frankly, you can’t tell what’s going to happen there.

    So if one is certain on retiring in the Philippines in 14 years, you ought to consider hedging a significant part of your portfolio now to exchange rate movements in the peso.

    • says

      Hi Nick – Nice to hear from you! I hope all is well up your way.

      As far as I am concerned, you are right on track! The exchange rate is the most important thing for expats. I mean, let’s say that you have 7% inflation per year… well, I’ve literally seen the exchange rate swing by 15% in a single year, which is double the inflation. Think about this.. if you have a 15% exchange rate swing (against the expat), and also have 7% inflation… well, you’re talking about losing 22% of your buying power in a single year. And, it is not that unusual.

  2. says

    Another point on this. It’s not the absolute value of the Philippine inflation rate that is relevant. It’s the difference in that and whatever alternative inflation you may be facing, such as Japan or US inflation. So if Ph inflation is 5% and US is 3%, then you’re facing a 2% inflation penalty, not a 5% penalty.

  3. says

    Hi Bob – Personally I think Paul’s question is ludicrous in so much, how can anyone accurately forecast or even guesstimate the cost of living in the Philippines in 14 year’s time. Whilst I’m sure his question is genuine from his part anyone who attempts to answer it either has a crystal ball or a vivid imagination. My advice would be that he saves as much as he can and re-asks his question in say 2025 when by that time up to date information will be available.
    On a lighter note by the time Paul is ready to come and live here his savings permitting the majority of current retiree readers will be around 80 years old and not really bothering what the cost of living is by then and only interested in managing three square meals a day plus the odd cold SM thrown in as medicine.
    Regards.
    Jim.

    • says

      Hi Jim – I get these kind of e-mails daily, usually many of them every day. Asking about 10 or 20 years down the road. As you point out, there is no crystal ball that will know the answer. Answering what will happen in 14 years can be a guess at best!

  4. Cherly says

    What someone “needs” to retire on varies from person to person. What might be a good living in the Philippines for one person might not be a good living for another person.

    It really depends on how you want to live. My fiance and I can live VERY well and quite happy in Makati Manila on $2000 a month. We could live very well and quite happy in other parts of the Philippines for around $1500.

    The biggest cost is going to be housing and electricity.

    I know of people that are very happy living in the Philippines on LESS than $1000 a month. I would not want to live in some of the areas they live in but that is just me.

    I also must say one more thing. I constantly here people saying “when I retire I want to live in the Philippines.” If retirement is 10 years, 15 years, or whatever away….you might not get there!! If you truly want to live in the Philippines figure out a way to get at LEAST $2000 a month in income on a regular basis that allows you to be in the Philippines and make the move now…but only after you have been here and have a good plan in case it doesn’t work for you.

    Far too many people I have known wanted to do something when “they retire”, only to never reach retirement because of illness or some accident. The Philippines is a beautiful place to live if you can handle the culture and you have enough money that doesn’t cause you too stress out.

    • says

      Hi Cheryl – your thinking and mine are a perfect match. No two people have the same needs or desires, and thus what it costs one person to live can be totally different than others.

      I also agree about making the move before retirement if it is really what you want to do. That’s why I came here at age 38. I’ve never regretted it either.

  5. Mark LaBelle says

    The idea of asking about conditions 14 years from now is a bit silly, regardless of where in the world you you are trying to project. Once thing is for sure, the cost of living in the Phillipines surely is a fraction of living in the USA, if you can’t afford to retire in the Phillipines, good luck in the States. Also cost of lving in Philippines is ratherr a broad question ,…like any country it depends where you are talking about. Of course urban areas are more expensive,….but in a tropical paradise why not find a nice place in the provinces? Of course if one is an urban type, the provencial life is not suitable. Once outside urban areas rents and purhcase prices drop like a rock, food is cheap, local transportation is cheap , though electricity is still expensive as is petrol,,,,,but if you dont drive then the petrol should not be a problem. BTW aren’t most folks social security payments at least $1,200 these days, indexed ot US inflation ? …can live quite well in many places in the Phillipines on that amount

    • says

      Hi Mark – Thanks for sharing your thoughts. You say something that I often think to myself when asked this question.. “if you can afford to live in the USA, no worries, you can make it in the Philippines!” :lol:

  6. Alex says

    I have moved to Philippines for 3 weeks ago, coming from Denmark. My wife is filipina (ofcourse) and we decided that it was her turn to be “at home” after more than 20 years in Denmark. We have a house fully paid, here in Angeles, but as you mention one of the bigest costs are electricity, almost robery in highligt day.

    Except from that it is so different what we need for living. We live mostly as a normal filipino family, concerning food and so on, even i still have some needs.
    I need to have a good Internet connection, since it’s been my work for many many years. Also i want good TV stations, and these things costs. We have planned this for a long time and invested in a house in a subdivision, so there’s no costs for rent, we have invested in furnituring the house and all these things, while we both still were working. By doing these things the living costs are less.

    So if you plan some time ahead, there’s many things you can do to lower your living costs.

    A compliment to this blog, i read it every time there’s news and i have learned many things, even i have been in Philippines many, many times before we moved.

    • says

      Hi Alex – Congratulations on your recent move! I’ve only been up to Angeles one time, and find it to be rather nice. I hope you enjoy your life there!

      Glad to know that you have found the site valuable! I hope you will contribute more!

  7. Mitch D says

    Nice site…. Bob, I was wondering if you have ever done a article concerning what someone with a disability could/can do for fun in the Philippines…. I’m only 52, retirted Navy with VA disability + SS disability + my Navy pension….. Wife of 31 years and I are “headed downrange your way this summer”…… My concern is with a significant back problem, what is there to do “over there” lol…. I can still walk short distances, but then the old back starts to “talk to me”…. Just thouth I’d ask…. Thoughts from anyone….. Maybe in the same boat….. Thanks!
    Mitch

    • says

      Hi Mitch – it depends on what part of the philippines you are in, but I find there is plenty here to keep me busy. Whatever your interests are you can do it here.

    • says

      Mitch, ever tried aquarobics or swimming. Keeping the core muscles is important with lower back muscles and swimming is one way to help keep your flexibility without too much strain on the back. Works for me.

  8. PapaDuck says

    Bob,
    Having a steady monthly income is always the best. But also have a decent amount of money saved in case of emergency and other unforeseen circumstances. You just never know when you need extra money besides your monthly income. Take care and be safe.

  9. Bruce Michels says

    Bob,
    I know Paul is probably all pumped up about retirment in the Philippines AND FRANKLY SO AM I. When you start to inquire about the cost of living in the Philippines or any where else for that matter 14yrs out is really stretching it.
    No one alive can predict the future that far in advance. So really in stead of trying to analize the cost of living some where he should concentrate on working on a type of pension or income and have a nest egg saved for the move. Than in about two years out start reshearching the cost of living somewhere.

  10. John Leick says

    Jeepers, 14 years, you’ve got to be kidding! Many years ago I was fortunate enough to hear JB Fuqua speak at the Fuqua business school at Duke. He told the audience to only have a three year plan, beyond that there is too much uncertainty. I have always kept that in my mind through my business and personal life, and this advice has served me well. I plan on moving to the RP in 14 months and that is still evolving…

  11. Henry says

    Hi Bob! It was great to have met you (again) earlier this month. I wish I had more time to stick around and “throw” more questions at you. As I explore the plan of living in the Philippines, I always wonder how much I would need to sustain myself (and a future family). I constantly “entertain” such figures on a regular basis. Though I haven’t figured a precise amount, I feel that figure is obtainable within time. As I am looking at my jobs’ retirement/pension package(s) to cover said needs, I feel it might not be enough. So I am looking at various business opportunities there per our conversations. I can’t give an exact time frame of my plans to relocate there, but I can’t wait until “official retirement” age as described here in the U.S. Frankly, I”m looking at a 5-year plan. Just wanted to share that.

    • says

      Hi Henry – Yep, I enjoyed our meeting too! I hope you had a good trip to the Philippines! Go for that business idea that we discussed! You would be the first! :wink:

  12. Paul w says

    Hi Bob i live near Banna and live on 1200 a month plus i have a 2700 sq ft house paid for and a suv paid for and my wife and i live comfortable . And i agree the longer a person waits to retire the more risk. I’ve had several friends out off retiring and ended up passing away before they did.

  13. Larry says

    You have to ask yourself “What can of lifestyle do I want?” before you can determine how much money you will need. If you want a modern, American lifestyle in the Philippines you may actually spend more here due to the cost of imported goods that are a necessity for you.

    For me, I hate to drive so jeepneys are a God send for me. I rarely drink or watch tv and am most happy with a stack of books so my entertainment costs are low. Likewise, I eat simply in the US and avoid most processed foods so I don’t spend a lot on imported food items. My wife owned her own home in Negros Occidental before we got married so we have no rent. So for me, life in the Philippines is indeed cheap. I know many people want amenities that I don’t care about so they have to spend more monthly…not a value judgement on my part. I’m just trying to point out that it is hard to get an answer to “How much do I need to live in the Philippines” because there are so many variables involved in getting an appropriate figure. This is why I encourage people to think about what kind of lifestyle they want and work from there.

    Just my $.02 as a part-timer, we switch off between living in the US and the PHL.

    • says

      You are exactly right, Larry! If you want to live the same life as you have in the States.. better to stay there, because you’ll spend a fortune here. If a person is willing to adjust and live a more typical Philippine lifestyle, life here is still relatively inexpensive, although not like a decade ago, for sure.

      Sounds like you have it figured out, Larry! Good going! I hope you are enjoying your life here.

  14. David S. says

    If you want to know how much it will cost to live somewhere else first ask yourself: How much am I spending now? Comparable accomodations, eating habits, entertainment expenses, etc. don’t vary significantly (with the exception of high priced locations like London, Paris, Switzerland, San Fancisco, etc.) from one country to country. Imported delicacies are often even more expensive. Where you might save money is when you are willing to change your lifestyle to more closely model that of the locals and take advantage of lower labor costs. If you want to live in exactly the same standard of western convience, eat the same diet and habit fancy restaurants and upscale entertainment facilities, you won’t be saving any money.

    So, how much will it cost to live in location “abc”? The same as what you are spending now unless you’re willing to adapt to a different style of life.

    • says

      Actually, I disagree. Living the same lifestyle in the Philippines that you live in the USA is more expensive! Not only will you not save money, you’ll spend more to live a US lifestyle in the Philippines.

  15. DanielY says

    I just want to add my 2 cents worth of comments for the Questioner. Why not take several trips of at least 2 weeks to The Philippines, and see what places and lifestyle fits you (when you retire). Then research and analyze the cost of living. If the number you come up with is “Not in your budget”, then you CAN NOT afford to retire in The Philippines, UNLESS you can increase your Retirement Budget.

  16. chasdv says

    Hi Bob,
    I couldn’t tell you what is going to happen anywhere in 5 yrs time let alone 14yrs.

    Electricity prices may seem expensive to some living in the PH, but they are still significantly cheaper than UK electricity prices.
    Regards,
    Chas.

    • says

      Is that right Chas? I have read that Philippine electricity costs among the highest in the world. I didn’t realize that the UK was so expensive.

      • John Miele says

        Bob: He may be right, but in my UK experience, most buildings do not have aircon (not really needed 9 months per year) and use gas for heat… Just my observation, but I think the gas bill in the UK may be a real choker (Thus offsetting any savings or still being higher)

    • chasdv says

      Bob,
      I’ve heard of PH electricity prices being the highest in Asia, not sure where they are on the World scale.

      UK electricity prices have increased @ 40% over the last 5yrs and will continue on that path for the next 10yrs to subsidise the drive towards green energy.
      By that time i think we will be back to using candles,lol.

      Gas has increased over 50% for the same period as much of it is now imported.
      New Gas fields are being explored along with fracking.
      I hope they are successful or we will be back to log fires again,lol.

      Anyway, the UK won’t effect me for much longer, i take early retirement this August so i will be living there next year.

  17. lolo56 says

    Wow i read this post and now i don’t know if i should cry….If i read good you guys need more money than me here in Canada to stay in Philippines…Me and my wife are along,,,sold my house long time ago…so for now we are alright with less than $ 1500 CDN and don,t forget that is more than $US …lol… Probably it depends of a lots of facts…First we don’t expect to have a house in Philippines..and with my wife we calculate than we should be able to make it for around $ 750 a month…for sure i will not have ahouse with a/c working 24 a day and no car no need that here… So probably you budget is about an owner with car etc…ok maybe… when my wife was waiting for her visa i send to her every month about $ 300 to $ 400 a month and she was correct with 2 teenegers and the rent…No steak but it was covering their needs… From my wife city in mindanao island with 4000 to 5000 pesos you have something correct (for us) no car so no payment and no ass. and no gaz to pay. no need a car there. Anyway when we got marry in 2010 our budget was 1000 pesos a day and we make it…we stay at the hotel with A/c, we eat evereday, cigarette and coffe…So i beleive we can manage to do it under $2000….So i continue to pray…lol

    • says

      Hi lolo56 – Oh, it can be done. I know people who live on $200 per month. I would not like to live that kind of lifestyle, though. It’s not impossible to live on $750 per month, which you said is your goal, but it won’t be a life of luxury, for sure! :lol:

  18. lolo56 says

    Thanks for your fast response….I was just telling my wife…Did we forget to calculate something ? For sure it will be no luxury i don,t have it here so no need there also…and i will all my time to help overthere. Helping people to learn french or english etc…

    Again thanks
    i do appreciate

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