Living in the Philippines is not something that the majority of people even consider. Heck, to be honest, a lot of people don’t even know where the Philippines is, unless they have some connection to the country (a friend from there, a wife, served here in the military, or something like that). I know that when I got married to Feyma, when we would tell people that she was from the Philippines, a lot of people would ask – “where is that, South America?” Well, no it is not, but that is just an indicator about how much the average person thinks about the Philippines.
For many of us who have a connection to the Philippines we think of the Philippines as a great place to retire. It’s a tropical place with beautiful beaches, a laid back lifestyle and cheap living. Right? Well, not necessarily every one of those points is true today, or will be true in the future. Remember, times change, and the things that we take for granted change too.
After World War II, a lot of American Servicemen decided to settle down in Japan. Life was cheap in Japan. While Japan is a much more closed society than the Philippines, some of these GI’s were able to take a Japanese wife and settle down there. Many of them thought that life would be like this for the rest of their days. But, as time went by and Japan grew and became an economic force in the world, things changed. Living wasn’t cheap any longer. Many such people ended up having to leave the country to find real work, and to live in a place with a lower cost of living. Today, living in Japan is quite expensive!
What about the Philippines? Is the Philippines a cheap place to live? Well, I would say that it was a cheap place to live in the past, and right now it is showing signs of becoming a not-so-cheap place to live. When I talk to other ex-pats living here, I hear the same stories that are in my mind. Prices constantly climbing. Currency value of our home currencies constantly falling against the Peso. Honestly, I know people who are leaving the Philippines, returning home partly for the reason that living here is getting expensive.
A friend and I were talking about this trend a couple of weeks ago. My friend moved here to live in 2001, I believe. I have known this guy since the early 90’s, and we live a similar lifestyle here in Davao. My friend told me that he had been doing some thinking, and he figured that as Americans living in the Philippines, in the time we have been living here we have lost about 70% of our buying power. I have thought this over, and in some areas he is entirely correct, in other areas our buying power has slipped, but not to that extent. Overall, I would say that our buying power is half of what it was in 2000 when I moved here. That’s right, in terms of dollars, prices have doubled in 8 years. And, as I said, I agree with my friend that on many things prices are up almost triple in that time.
Where has our buying power gone? Well, the first thought is that the US Dollar is down by about 35% against the Peso. Just a couple of years ago, a single US Dollar would buy you 56 Pesos. Today, you’ll be doing good to get 40 Pesos for that same Dollar. And, it’s still falling, although more slowly than it was a while ago. Added on top of that, inflation here is high – you can watch prices increase at the grocery store every time you go. The combination of these two things is a killer.
For those in the population that do consider the Philippines as a possible retirement location, I would say that nearly 100% of them have the cost of living as one of the factors that puts the Philippines on (or on top of) the list of potential retirement destionations. Cheap living is a real draw for ex-pats who want to live here. But, honestly, in my opinion cheap living is not something to consider any longer. If you want to live here to enjoy the diving, great! If you want to come here for the beautiful warm and sunny weather, you are in business. If you love the people here and want to enjoy that in your retirement years, that’s great. If you want to come here to live on the cheap, you can still do that to some extent, but that particular aspect of living in the Philippines is fading.
Watch this column tomorrow. I have an interesting column making price comparisons between the USA and the Philippines for items that are exactly the same. What I write tomorrow may shock you. When I started doing some research into this, I was shocked. So, tomorrow, check the prices as Philippine manufactured products go head to head with American products. What you see may not be what you expect.