Cost of living

Just so there’s no doubt, I’ll say it again. I love living in the Philippines almost as much as I love my wife. I’m here because of her and am grateful to her for bringing me here.
That said, there are some real economic advantages to retiring here. Cigarettes are less than a dollar a pack, but that may not be the best example. For a more balanced appraisal, here’s a peak at our basic monthly budget:
Domestic helper $ 50
Food & Recreation $ 300
Automotive expenses $ 100
Utilities $ 55
That’s right, just about $500 a month for a family of 4 with three healthy, growing pets. Before I challenge you to beat that in the United States, there are couple things I should note. My stepson is a college student and he generally eats with us only on weekends. Also, we don’t pay any rent—we own our home outright, a new 3 bedroom, 3 bath home with maid’s quarters in an upscale subdivision that cost slightly less that $70,000. Finally, notice that we aren’t budgeting anything for travel and entertainment. That’s deliberate; we’ve set this year aside for settling in and doing some remodeling, but that’s not too much of a strain either. Here, a skilled carpenter is available for just over $10 a day and laborers charge about $7 a day.
A small annuity from an early teaching assignment covers most of the bills and I receive modest royalties from a couple books. Occasional withdrawals from my IRA pay for renovations and unexpected expenses, so our life is comfortable; not lavish, but comfortable. And, I haven’t even begun drawing Social Security yet … I’ll let it sit for a while and hope the system doesn’t go bankrupt in the meantime. And the good news is that my stepson graduates in less than a year and the savings in tuition, books, and other expenses will just about make up for what I don’t take in Social Security.
Now, the big question is could you live as cheaply? There are lots of “ifs” in any answer to the question and a lot depends on your lifestyle. Mine is pretty simple and I’m generally happy in worn shorts and shirts with a few rough spots. My wife insists that I keep at least three changes of “good clothes” in the closet and that’s generally where they stay. A big if concerns your skill in managing money. The exchange rate is generally pretty stable around 48 pesos to the dollar, but we’ve seen it range from 39 to 57. To moderate the effects of fluctuations, we keep two accounts—one in dollars and the other in pesos. Generally, we move money into the dollar account and convert to pesos only when the exchange rate is 50 or higher.
Another if involves housing. I’d suggest you rent for a year while you learn your way around and decide which real estate developer or agent you want to deal with. We rented a comfortable, 2 bedroom, 3 bath townhouse in a gated community for just over a year. Our rent was less than $300 a month and we didn’t do much driving because a major shopping center was an easy walk. We’re both comfortable riding motorized tricycles when we have bigger loads, but riding a tricycle in traffic is an adventure in itself and you might not be as foolhardy as we are.
Two more ifs; we eat well because my wife enjoys shopping at the local community market—kind of an expanded farmers market with everything from fresh meat and produce to plastic furniture, cleaning supplies, and anything else a family could need. Plan on spending about twice what we’ve budgeted if you are more contented shopping in western-style supermarkets and aren’t fond of rice. Rice is the Filipino staple food and generally costs about 40 pesos (80 cents) per kilo, a little more for good brown rice, a little less for standard grade white rice. By the way, a kilo or kilogram is 2.2 pounds but it goes quickly if you have Filipino relatives. We buy 5 kilos whenever my stepson is going to be with us for a week and occasionally have to stock up midweek. Medical care is the final if. In an earlier blog I noted that care here is very good and substantially less expensive than in the United States. However, you may want to check your insurance first; I’ve heard that there are some companies that make overseas claims difficult.
So there you have it. I love my wife and wouldn’t be here if it weren’t for her, but there are some economic advantages as well.