Most of us dream of the day we can finally cut our ties with the working world and live out our lives in retirement. Saving up for that day can be a challenge—especially when you consider the limited amount of income you'll have at your disposal to live without worry. But what if there was a way for you to live comfortably and not break the bank? One way to do so is to consider living abroad.

The Philippines is an English-speaking archipelago nation with much to offer retirees and others seeking a low-cost yet comfortable life in an exotic locale. With just a little care, a $1,000 monthly budget will go far in this country, providing everything you need to make a new home and enjoy your life.

Key Takeaways

  • Major cities in the Philippines give retirees access to many amenities, but usually at a higher cost.
  • Prices for apartments in outlying areas are generally 25% to 35% cheaper than most city centers.
  • Utilities and internet in a city like Manila can cost under $200 each month.
  • Food is much cheaper than in the U.S.—a meal at a restaurant costs about $3, while staple foods common to the American diet are cheap and plentiful in the Philippines.
  • Remember to register with your embassy or consulate to get safety and security information.

In fact, International Living magazine has consistently ranked the Philippines among one of the top international retirement destinations when it comes to the cost of living. And there's a whole slew of places where you can settle. Whether you decide to live in the city, in the highlands or near the beach, you should have no trouble making your budget—likely with funds left over for dining out, entertainment, and perhaps some travel.

Top Low-Cost Cities

The Philippines is home to a diverse natural environment consisting of more than 7,000 islands. While there are many worthy and inexpensive destinations in the country, expatriates tend to cluster in developed areas that provide access to services, healthcare, and other amenities. While English is an official language in the Philippines, it is not widely spoken in less-developed, rural parts of the country.

English may be an official language in the Philippines, but it is not widely spoken in rural parts of the country.

For a big city lifestyle, the national capital of Manila—located on the northern island of Luzon—delivers all the hustle and bustle you could want. Manila is one of the busiest cities in the country. It's home to government offices, higher education facilities, not to mention much of the country's entertainment including restaurants, shopping, and nightlife. But remember, because it is the nation's capital, expect a lot of traffic, congestion, and noise.

Most expatriates, however, opt for smaller cities dotting the length of the archipelago, primarily because they want to be away from the hustle and bustle. North of Manila on the island of Luzon, the mountain city of Baguio is a terrific option for those interested in a cooler climate at 5,000 feet. Moving south along the archipelago to Cebu island, Cebu City and nearby destinations provide access to modern amenities in a Filipino center of commerce and education.

Southwest of Cebu City, Dumaguete is a port town on Negros Island, popular for its seaside location and diverse natural attractions. On the far southern island of Mindanao, Davao City is a large metropolis with modern amenities and easy access to beaches and mountains.

Housing Expenses

Rent and utilities can be exceptionally cheap in the Philippines. According to the international price comparison website, rent for a centrally located one-bedroom apartment in cities such as Davao City, Baguio, and Dumaguete is between $185 and $270 per month on average.

A centrally located three-bedroom apartment goes for about $570 in Davao City, $274 in Baguio and $444 in Dumaguete. Prices for apartments in outlying areas are generally 25% to 35% cheaper, a terrific bargain if you are willing to live outside the city center.

Manila and Cebu City are more expensive. One-bedroom apartments in central districts near services, shopping, and entertainment cost a little more than $600 per month in both cities. While rent over $600 is probably manageable on a $1,000 budget, you may want to make things easier on yourself by considering cheaper options in outlying areas where a similar apartment is under $220. A three-bedroom condominium in central Cebu City is about $760 on average, while the same accommodation in Manila is over $1,800 per month.

Utilities are generally very reasonable, especially if you avoid around-the-clock air conditioning. Utility costs including electricity, water, and garbage service outside Manila are typically around $118 per month. Unlimited broadband Internet service averages $43 per month.

In Manila, utilities average around $130 per month, and Internet service costs about $50 per month. Prepaid cellphone service costs around 15 cents per minute across the country, but they may be cheaper depending on current service plans and promotions.

Food Expenses

You should have no trouble eating very well on less than $200 per month if you dine mostly at home and stick to Filipino food brands, as well as local fruits and vegetables. Many staple foods common to the American diet are cheap and plentiful in the Philippines. A dozen eggs cost less than $1.75—the same as a pound of boneless, skinless chicken breasts. Rice is under 50 cents per pound, bread is less than $1 per loaf, and locally produced cheese is about $2.50 per pound. Pasta and other packaged foods familiar to expatriates are widely available in most of the country. Fruits and vegetables are sold in open-air markets and grocery stores across the country, usually at substantially lower prices than in the United States.

According to data, basic and mid-range restaurants are cheap enough that you can afford to eat out on a regular basis if you choose. A simple but tasty and hearty meal at a busy local restaurant costs around $3 on average. A three-course dinner at a mid-range neighborhood restaurant costs about $16 for two people, not including alcoholic beverages. A pint of Filipino bottle of beer is about $1, while a 12-ounce import costs $1.96. Beer prices are slightly cheaper at local markets.

The U.S. Centers for Disease Control and Prevention (CDC) states that tap water is unsafe to drink in the Philippines. Bottled water is widely available and inexpensive throughout the country. A 12-ounce bottle costs about 36 cents on average. In most cities, five-gallon containers are also available at an even lower price per volume.

Health Care Expenses

Many cities in the Philippines have first-rate hospitals with modern equipment and highly trained medical professionals, many of whom were educated in the U.S. and other western countries. However, access to quality care is generally rather limited in smaller cities and in rural areas of the country. International Living magazine reports that many expatriates choose to forgo health insurance because the costs of care are so low in the Philippines. While self-insuring is definitely an option, expatriates may choose to purchase a health insurance policy. PhilHealth is the public health insurance option in the Philippines. Policies are also available from private insurers.

Other Expenses

Basic living expenses including personal hygiene products and household cleaning products are generally inexpensive in the Philippines. Items such as clothing, contact lenses, home decorating items, souvenirs, and the like are generally much cheaper than similar goods in the U.S.—provided you shop wisely and purchase local brands. Although these kinds of expenses vary from person to person, most expatriates should be able to meet a budget of $100 per month for these items.

Public transportation is widely available in Filipino cities. In most cases, there are at least several different options, including taxis, motorized tricycles, jeep taxis known as jeepneys, and public buses. A one-way trip in the central city districts costs as little as 17 cents on a bus or tricycle. Taxis start at less than $1 plus approximately 50 cents per mile.

A Final Budget

Basic living costs in Dumaguete, Davao City, or Baguio may include:

  • $225 for a nice one-bedroom apartment in a good location
  • $200 for groceries
  • $125 for utilities, Internet, and cellphone service
  • $100 for personal and household items
  • $40 for transportation

This budget leaves $310 to spend on health care, better accommodations, dining out, travel, or another personal priority. You might also consider committing some funds to a special account for emergencies or other needs.

A Word of Caution

Just as you would with any other destination, it's a good idea to check in with travel advisories and warnings—whether that's for a vacation or for permanent residence. The U.S. State Department has travel advisories in effect for several parts of the Philippines.

As of April 2019, the Sulu Archipelago, including the southern Sulu Sea, has a do not travel advisory because of crime, terrorism, civil unrest, and kidnapping. Marawi City in Mindanao has the same advisory for suspected terrorism and civil unrest. People are also advised to reconsider any travel to other parts of Mindanao because of crime, terrorism, civil unrest, and kidnapping.

Regardless of where you go, it's always a good idea to register with your national office in the Philippines. By doing this, you'll receive information about safety and security, and allows the U.S. embassy or consulate in the area to reach you in cases of emergency.