If you like the sight of beautiful beaches and the taste of fresh seafood, all at unbelievably low costs, then consider the Philippines as a potential retirement destination. The small island nation – there are actually more than 6,500 islands in the Philippines, all told – is famous for its tropical weather, oceanfront property and easy access to the rest of Southeast Asia.
Perhaps most attractive is the low cost of living; one U.S. dollar is worth roughly 49 Philippine pesos. By comparison, an American living a $3,500-a-month lifestyle in Chicago could live just as comfortably for between $700 and $1,200 a month in the Philippines. Of course, a lot depends on how you plan your retirement, too.
Life in the Philippines isn't all warm sunrises and fun by the beach. There are many crowded cities, and poverty is a major issue among the local population. Even modern neighborhoods experience power outages, and there is the occasional tropical storm. The urban settings in the Philippines don't have the infrastructure of European or American cities, and some parts of the country are considered unsafe for Americans. The US Department of State has issued a travel advisory for some parts of the Philippines. On top of that, Philippines President Rodrigo Duterte's war on drugs has left the country reeling under a spate of extra-judicial killings.
All that having been noted, even the nicest areas in the Philippines are cheaper than life in the United States. According to International Living's 2016 Annual Global Retirement Index – which measures, among other things, climate, healthcare, benefits and infrastructure – the Philippines ranks 10th (in a three-way tie with Portugal and the Dominican Republic) in cost of living for retirement destinations in the world. Cambodia was ranked the least expensive, followed by Nicaragua and Peru.
Housing costs in the Philippines can vary dramatically based on location. For instance, it is twice as expensive to rent in Makati as in the city of Manila, the capital, or in Cebu. For their part, rental rates in Cebu or Manila are about twice as expensive as in Davao or Dumaguete. Most retirees should be able to find one-bedroom apartments for as low as $150 to $300 per month.
Prices go up dramatically if you want a fully furnished, modern and air-conditioned unit in the city center. As of September 2015, a 1,000-square-foot furnished accommodation in downtown Manila could run as high as $1,250 a month (the equivalent of PHP 58,500).
An expatriate must be married to a Filipino to buy a house in the Philippines. There is a long-standing Filipino law against foreigners owning land. Other options include leasing a home, or renting or buying a condo.
In Makati – a relatively expensive destination – a luxury three-bedroom condo ranges around $3,000 per square meter, according to Colliers International. Comfortable three-bedroom homes cost $75,000 to $200,000, depending on the location. Vacancies are rising and rents are projected to decline in 2017. The buyer pays additional costs between 2.75 and 3.75% of the purchase cost, not including agent fees. For more, see Buying a House in the Philippines: A How-To Guide.
Food and Clothing
Compared to housing or transportation costs, food isn't as much of a bargain in the Philippines, but it is still inexpensive to find a meal or fill a pantry. According to the website Numbeo, American expats can find typical combo meals, such as at McDonald's, for less than $3. Many Filipino restaurants offer meals for even less, and some medium to high-end meals cost as little as $15 for two people. Some resort restaurants or fine dining spots in the city center charge more.
The Philippines is full of street markets, grocers and full-service stores where you can stock up on food. Common, cheap products include vegetables, rice, eggs, chicken and seafood; milk and cheese are harder to come by and can be much more expensive.
Free of heavy sin taxes, beer and cigarettes in the Philippines come extra cheap. Even high-quality imported beers normally cost around $1.81, per bottle and a pack of Marlboro cigarettes costs as little as $1.27.
Filipino fashion is heavily influenced by American and Japanese trends and, in some cases, price points. A pair of nice jeans runs as high as $45 to $60, and a standard summer dress costs around $30. Men's leather shoes cost around $55 per pair and you can expect to pay around $80 for contemporary running shoes.
The Filipino people are, by and large, smaller than Europeans and Americans. This is reflected in their clothing options, and many stores don't carry what most people consider to be large or extra-large sizes. Clothing in typical American sizes is more likely to be available near the old Clark Air Base (by Angeles City) or in the international sections of Manila.
Nightlife in the Philippines is abundant and cheap. Most bars and dance halls – karaoke is also very popular – are significantly cheaper than what you'd find in Chicago, New York, Paris or Tokyo. There are some tourist destinations with expensive entertainment, but these are the exceptions rather than the norm.
Two tickets to the best seats at the theater can run as much as $83, according to the website Expatistan, although there are plenty of local shows for less. Movie tickets might cost $5 per person. Of course, hanging out by the beach usually doesn't cost a thing – perhaps other than transportation, which is exceptionally cheap.
There is widespread belief among the Filipino population that all Americans are wealthy, and that can sometimes mean putting a target on the back of expats. Use common sense and general care when enjoying a night out in urban settings.
If you're looking for one area where the Philippines really stands out, it's probably in the cost of medical services. Regular checkups with English-speaking doctors rarely cost more than $12, Expatistan reports. Since there is no Filipino equivalent to the U.S. Food and Drug Administration, most prescription medication is available at low cost, though there are some brand-name imports that command high prices.
Some public hospitals offer free general care, contraceptives and dental services to locals, although it's usually best to have a translator when using these services. It's also possible to enroll in PhilHealth, the generic health insurance program available to poorer Filipinos.
Traffic congestion is a constant problem in populated centers, such as Manila, Quezon City, Budta (the autonomous Muslim part of Mindanao) and Davao City. Taxis are available for reasonable fares, but many people choose to travel via the so-called "jeepneys" – overloaded buses and vans with passengers hanging from the sides and backs. One-way tickets rarely reach 50 cents.
It's very expensive to travel to and from the U.S. or Europe from the Philippines, but there are much more affordable flights to destinations such as Australia, Singapore and Japan.