I decided to write this after reading a comment by Michael Panning on an article by Dave Starr titled “Some Financial Thoughts On Retiring in the Philippines“. His comment laid out what he thought it would cost to live like an American in the Philippines. My question to anyone in general is: Why would you want to live like an American in the Philippines? It financially defeats the purpose of moving to the Philippines in the first place. Sure, there are some things you need in both places but to truly appreciate living there, you need to live like a Filipino as much as possible.
There are many reasons to move to the Philippines but in most cases, it’s for retirement. You wouldn’t be doing the things a non-retired person would be doing. Retired folks in the United States live on far less than the people in the work force do. They don’t have to commute to go to work, they usually own their homes and cars and they tend to stay home more. It has a lot to do with age, but not completely. Some retired folks like to go golfing (I know people like that). I also know some retired folks who like to travel, especially to visit relatives.
Most retirees aren’t raising families – their children are usually grown by the time they retire. Mine were grown when I retired and I retired early at 45 years of age. There are costs associated with growing teenagers that you just don’t see when they’re already grown.
Most retirees don’t move their entire families with them to the Philippines. Usually, it’s just a husband and wife. We (my wife and I) had our grown younger son living with us so he could go to college, but we didn’t spend a lot of money because of him. Had he been much younger, I could see his education and other activities being a financial burden on us, even in the Philippines.
As always, it depends. If you intend to live just like a young American family would, you’re going to need two to three times as much as you would otherwise. We can live comfortably on around $1000 a month because we own our house and our car and because “I” don’t like to travel.
We’re not being cheap, as some people may suspect. It’s easy to not spend money when you have no need to do so.
We don’t need to go out for entertainment. We don’t go to movie theaters — we wait until we can watch them at home — because movie theaters are a pain and we’re more comfortable watching on our big widescreen TV, where we can pause the movies when we need to take our breaks.
We rarely go shopping for anything but groceries and we rarely eat out. We tend to save up enough to shop for clothing and other things on a very irregular basis.
Our monthly utility bills, including Internet and other things we’ve added to the list, are always less than $400 a month, even during the hot months. We probably spend more money on food but it depends on the season. We usually save anything over $1000 a month, even when we’re not trying to save it.
We may not be able to save as much over the next few years because we’re putting some nephews through college. That would be unthinkable in the United States. We couldn’t afford that even if both of us were working full-time.
Some aspects of living in the Philippines are less expensive than the United States. Some aspects are about the same. If you expect to live like a king, you could probably live like a king in the United States. Again, it depends on what you think you need. It also depends on where in the Philippines you live – just like in the United States.
In Olongapo City, where I live, you can find rent prices ranging from $50 to $150, but these aren’t 100 percent American-style homes. For that, you’re probably looking at $300 to $500, which is still cheaper than most places in the United States.
If you use local transportation (like jeepneys and tricycles), you’ll save a fortune on gasoline or diesel. We don’t usually spend much on gas anyway because everything we need is close by.
The imported food prices are about the same as we would pay for them in the United States because we buy them in a duty-free and tax-free economic zone (the Subic Bay Freeport Zone). The local food prices are less. The prices at the malls for everything else depends on the stores we buy them from – kind of like the malls in the United States.
I’m sure it sounds like common sense but apparently, it isn’t. I can’t tell you how many times I’ve heard expats complain about the Philippines in comparison to the United States in the things they take for granted.
If you’re comfortable where you live now and you’re happy with your life there, you should stay exactly where you are. The Philippines isn’t a magical place where your minor annoyances will disappear. If anything, they’ll become major annoyances to you.
If you’ve never been to the Philippines before, don’t decide to move there until you take at least one trip to the area you’re interested in. After you move is not the time to learn about it.
You need to get used to the idea that almost everything is going to seem foreign to you. Sure, some things are similar to their counterparts in the United States and some things are exactly the same but it’s not something you should expect.
By: RT Cunningham
June 17, 2014
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