Let me begin by saying what should be obvious. Don’t move to the Philippines unless you have considerable savings. Keep working in your home country until you have accumulated wealth. Tough it out in that unsatisfying job. The sweet fruit, the ocean scenery, the pretty girls, and the friendly smiles will still be here when you are finally ready. Unfortunately, the authors of this site can’t tell you an exact amount to have saved before you come but consider the following. It can cost tens of thousands of U.S. dollars for some medical treatments in the Philippines. Your monthly budget could consistently come up short if the exchange rate does something unexpected. You may decide you no longer want to live in the Philippines, and you will need startup money to get reestablished back in your home country.
Personally, the way I’m wired, I wouldn’t be able to fully enjoy being an expat if my savings didn’t provide me a backup plan back in the USA.
Now that you have your nest-egg (savings), the first thing you might want to consider is how your home country compares to the Philippines. Is is financially strong? Is it militarily strong? If the Philippines compares favorably to your home country, you might be more likely to consider having your savings in Philippine pesos. As for me, I’m more comfortable keeping the bulk of my savings in the U.S., simply because I feel safer with U.S. financial institutions. On the other hand, I would feel safe keeping perhaps 5% of my savings in a Philippine bank for emergencies, or as a hedge against short term unfavorable moves in the exchange rate.
Until recent years, I suppose having access to your savings for emergencies might have been more of an issue. In this age of no fee ATM’s, easy electronic transfers of funds, and credit cards, access to money is not a concern of mine. I’m glad the days of traveler’s checks is long gone. Running my finances in the Philippines is almost as easy as if I was back in the USA.
Be wary of any ‘business opportunities’ that are presented to you in your new country. I believe it was Bob that gave the advice to avoid major financial decisions your first year in the Philippines. In other words, don’t put our savings at risk. My wife and I have turned down several ‘business opportunities’ simply by explaining that we are retired and no longer interested in making money.
As an expat, my biggest concern regarding my savings is no different than it was before I became an expat. Mostly, that means staying informed about anything that could potentially impact my wallet. Changes to tax laws, social security, or health care are the three main subjects that I research. By balancing the timing and amounts of savings withdrawals, I have been able to save substantial dollars (or pesos).
In closing, I would encourage all the expats to remember how long and hard they worked to accumulate their savings. Protect it with equal effort. There’s more to it than finding the best interest rate.