In my day to day life in Davao, I talk to a lot of expats. A lot of my friends are expats, and I usually end up meeting other expats if I am out and about. Because of this interaction with so many other expats, I can generally get a pretty good read of the pulse of the expat community here.
In recent days, I have been hearing the same thing from almost every foreigner that I talk to. They are all telling me that economically it is getting difficult for them. I have heard from some expats that are even thinking of going back home because they can’t afford to live here anymore. Others are searching for new ways to make some extra money. Still others are not sure what to do, they only know that their wallet is not nearly as full as it was a year ago, or so.
Why are so many people complaining of this? Well, the primary reason that I have been told is that the decreasing value of their currency against the Peso is making life difficult. Americans are hit the hardest, it seems, because the Dollar has taken a nose-dive against the Peso for a couple of years now. But, other nationalities are being hit too. The British Pound is nowhere near where it was against the Peso just a year ago. Basically, nearly every foreign currency is down compared to where it was at this time in 2007.
For anybody who has a fixed foreign currency budget, that means that in Peso terms, they are now having to put up with less than they used to.
There are other factors too, though, in addition to the falling value of foreign currencies against the Peso. As I have pointed out many times here, Inflation is extremely high in the Philippines. Food in particular has been hit with hyper-inflation in the past year or so. Look at rice right now, we are seeing prices rise by up to 20% per week! That cuts into a budget quickly, especially when you figure that rice is one of the major foods that must be purchased to feed the mouths in your household.
When you combine high inflation with a devaluation of your currency, you are getting shorted on each end of the process, and it doesn’t take long to feel the pinch.
For some of us who are in business, the poor economy in the USA is starting to affect our business, and we are seeing a downturn in sales and profits. There is a saying that seems to be so true:
When America sneezes, the whole world catches a cold.
Factor in all of these things, and living in the Philippines is not quite as easy as it was just a year ago. It seems that a number of expats are just now waking up to the situation and taking note, because in recent days and weeks, it is a theme that I hear almost every time that I meet with or talk to a foreigner who lives here!
Just remember, everything is cyclical. As time passes, the pendulum always swings back to the other side again, and keeps swinging both ways. Find ways to capitalize, regardless of which side the pendulum happens to be on at the time. You can do it, if you think outside the box.