RT Cunningham

Retirement in the Philippines - Retired American Military Members

Philippines hut - retirement I used to receive a lot of messages on Facebook, Google Plus and by e-mail from retired American military members about retirement in the Philippines. I rarely get questions anymore but I still get them.

Rather than answering them individually, I point them to this article. These are the answers I have today. My answers could be different in a year or so.

My Retirement in the Philippines

In 1988, while I was stationed in Okinawa, my wife (Josie) bought the property my mother-in-law and some of our other relatives are living on today. In 2005, we bought the property where our house now stands, which is right next door.

I never planned for a retirement in the Philippines. Well, at least not until the 2020s. Circumstances turned to my favor when the housing boom occurred and we cashed out months before the collapse. After I made my decision in 2005 and started planning, I learned what I needed to know to actually make the move. We didn’t sell the house until 2006.

Josie took an oath at the Philippine Consulate in Los Angeles to become a dual-citizen because she became a naturalized American citizen before the Philippine Repatriation Act of 2003 was passed. When she did that, my younger son, who was born in the United States before Josie became an American citizen, automatically became a dual-citizen.

When I was preparing to make the move, I found out I needed a physical examination and a copy of my local police records to take with me. I went to the Philippine Consulate again and obtained a one-year non-immigrant visa. It wasn’t necessary. I could get a one-year balikbayan visa upon arrival in the Philippines. After I arrived, I was directed to the Bureau of Quarantine before going to the Bureau of Immigration.

There is some more up-to-date information on the “Thinking of Moving Here?” page for the Retired Activities Office (RAO), Subic Bay, Philippines. While I can only mention my situation with a Filipino spouse, they have information available for retirees in other categories.

Now it’s time for questions and answers. I’ll do my best to be honest and correct.

What state can I claim as my legal residence for tax purposes?

This is an easy question to answer, but it’s frustrating. If you no longer live in the United States, why do you have to pay taxes to any state at all? After all, aren’t you paying federal taxes on your United States-based income?

Like active duty military members, you can claim any state by showing residence or intent to live there, the primary being actual presence in the state. Other things, like registering to vote in a particular state, can also show your wish to keep that state as your state of legal residence.

In essence, as a retiree living outside of the United States, your state of legal residence (for tax purposes) should be the state you would return to - to visit relatives, set up businesses (like LLCs), etc. You just need to be able to convince your previous state (if any) that you now live in the new state.

Can I deduct anything for my taxes?

The rules don’t change just because you’ve left the country. You can still claim yourself, your dependents, etc. The only confusing parts happen when you try to answer questions in the tax program that don’t really pertain to your situation.

An example is when it asks if your dependents lived with you in the United States. Well, since you don’t live in the United States, how can you answer that question? You have to pretend you’re living in the United States, but only for that part of the taxes.

When I used to do my taxes, I spent hours converting pesos from receipts into dollars. It’s better to write it down as you go, but I was lazy. If you file a business (schedule C), you can deduct the same things you could in the United States, except for office space (and you probably won’t have that anyway).

Start a website and try to make money with it and call that your business. That’s what I did and I do make money (though not very much these days). Since my business is on the Internet, I deduct everything that I pay for that’s related to the Internet.

What about medical insurance like TriCare?

I honestly don’t know which hospitals honor United States-based medical insurance. I’m sure there are one or two, but I don’t have medical insurance and I’ve never been to a doctor or a hospital in the Philippines.

Frankly, unless you’re in really bad health (in which case, you shouldn’t move to the Philippines anyway), I think you’re better off paying as you go. I had three nieces go to a doctor in the same month and the total cost of all three visits, including medicine, was less than a month’s premium for TriCare.

Medical care and prescription medicine is big business in the United States (and the main cause of the problems with American health insurance). That isn’t the case in the Philippines.

Nevertheless, there are local health insurance companies. In the long run, getting health insurance based in the Philippines is probably your best bet.

What about dental insurance like Delta?

Josie had fillings put into five teeth a few years ago. The total cost was less than 5000 pesos. I think it came out to almost exactly USD $100. The upper denture that I paid for only cost me 7000 pesos. When I had my upper teeth pulled, it cost me 400 pesos (less than $10) per tooth. Most recently, it was 500 per tooth (still less than $10 at the current exchange rate).

The cost of getting average dental work done is less than the premiums and the deductible amounts for most American dental insurance plans. I had my teeth cleaned for 1000 pesos. That’s like USD $20.

What about medicine and medical supplies?

Nearly all the medicine available in the United States is available somewhere in the Philippines. I can’t get into specifics because I don’t have any experience with specifics. If nowhere else, whatever you need can be found in metro Manila.

Just like in the United States, doctors in the Philippines will prescribe over-the-counter medicine when that is all that’s needed. That’s one of the reasons I haven’t been to a doctor in the Philippines. The one time that I can remember needing antibiotics, I just bought them from the local drug store. I think a prescription is now required.

What banking choices do I have? Are there American banks in the Philippines?

While I was in Los Angeles, in 2006, I opened a United States dollar account at a Philippine National Bank branch. They opened the account in Olongapo City for me. I’m sure I could have chosen some other place, but I had no need to do so.

As far as I know, there are a couple of American banks in metro Manila, but their services are very limited - not the kind of bank you and I would deal with. Two banks in the Philippines (that I’ve heard about) seem to have some agreements with American banks: Bank of the Philippines Islands (BPI) and Banco de Oro (BDO).

I have two bank accounts, one in the United States and one in the Philippines. Most of my direct deposit amounts go into BDO in the Philippines. I have a financial allotment going to USAA in the United States. That account is solely for the things I need to pay for (like web hosting) or buy in the United States.

What is the best mobile phone to use and what’s the mobile phone service like?

As long as your mobile phone has a SIM card, you can get service with it. The three main providers are Smart, Sun and Globe on the island of Luzon. I really can’t speak for any other area.

I can’t even tell you what the best mobile phone is. Some people like the local brands (like SKK, CKK, MyPhone, Cherry Mobile and more). Some of them are very good and you get what you pay for. Others prefer the big brands like iPhone and Samsung whatever. You can get almost any of them at the various malls in the Philippines.

Should I buy a laptop and bring it with me or should I buy it there? What about Wi-Fi?

Up until I found a new computer store, I would have said to buy it in the United States and bring it with you. An automatic voltage regulator is all that’s needed to convert from 220v to 110v and they can be had for 600 pesos or less.

That’s no longer the case. The laptops at that store are comparable in prices to those in the United States, although the choices are limited. The major brands are available, so it’s really whatever you want to do. I’ve never bought a laptop in the Philippines.

As far as WiFi data goes, it used to be poor. It’s not that way anymore. Things keep changing. Today, a fiber connection is your best choice if you can get it. Otherwise, get whatever’s better, cable or DSL (I always had DSL). There’s a “pocket WiFi” service available from a couple of providers, but it’s based on mobile data so you can’t expect it to be fast.

What’s the water like, for drinking and bathing? What about hot water?

If you drink tap water, you’re going to get sick eventually. Just like in the United States, people drink bottled water when they can afford it. It’s not anymore expensive here than it is there. I get about 30 gallons delivered periodically for 200 pesos (around $5.00 USD) and I have a water dispenser.

No, hot water is still not the norm. Most people still take cold showers. Only certain people have tied hot water heaters into our water supplies. I used to take hot showers but I stopped. The water’s never cold enough to justify to the electricity cost for the hot water heater.

Is there a VA hospital in Manila, near the American Embassy?

There’s a Manila Outpatient Clinic for a specific group of veterans. I can’t tell you any more than what that I found online. I heard rumors, and nothing more, that a full-fledged VA hospital was going to be built, but that was a few years ago.

Are there flights into and out of the Cubi airport at the Subic Bay Freeport Zone?

There are, but they’re only commercial cargo flights. Some airlines are now flying in and out of the old Clark Air Base (airport code CRK), but I don’t know which ones other than Asiana. Some politicians are pushing to get the Subic airport turned into a passenger airport by the end of 2019.

The Clark airport is only about 45 minutes from where I live if I use the Subic-Clark-Tarlac Expressway (SCTex). Since that expressway was completed, a trip to the Manila airport usually takes three to four hours.

Do I need to ship anything ahead of my departure from the United States?

I shipped five boxes of clothing and kitchen items when I left the United States in 2006. I can’t tell you what you might need when you get to the Philippines but you need to know that you can get almost anything there. Don’t believe everything you hear from your neighbors and relatives. A sister-in-law told me I wouldn’t find American washing machines and dryers, yet I have a set in my laundry room. That’s just one example.

The key thing is to make sure you have a contact in the United States who can ship you what you need after you arrive. Freight companies are most abundant in California when it comes to shipping freight to the Philippines.

What is the current exchange rate?

I hesitate to tell you since it fluctuates. As of now, it’s above 53 pesos to the dollar. Since 2006, I’ve seen it as low as 41.

More questions?

I seriously doubt I’ve answered anything to your complete satisfaction. If you have questions or other information, please leave a comment.

Originally published in December of 2013. Updated as much as possible.

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RT Cunningham
August 15, 2018
Retirement