Its a common question and one that gets answered regularly. The problem you have is everyone has a different lifestyle and the way they want/expect to live in the home country or when they have relocated to the Philippines.
But there are a lot of factors you can do to reduce your costs once you move. A lot of the “imported” goods that you may crave for are nothing short of rip off pricing. I’ve seen pre-mix curry sauces for sale at nearly £5.00 a jar which in the UK would be around £1.30, Bratwurst sausages for P600 which should be around P150 max. The reason being there is little competition and if you miss those foods what options do you have right? Well the first one is if you have relatives most countries have Balikbayan box services which is what Filipinos use to send products back home. Prices vary but are reasonably priced and you could get a family member to pack a box up and get it collected and delivered door to door. You could even order the goods online from somewhere like ASDA or Tesco for home delivery and your relative would only have to repack it into a cardboard/wooden box. Doing it this way would save you a considerable amount over a year. One of our favourites is Frey Bentos pies which I bought at least 20 of for shipping. If you tie that in with some products to sell such as shower gels which are on 4 for £3.00 or buy one get one free you might be able to actually offset the cost of the box by selling the products on. Filipinos love goods from abroad and things like makeup are much better quality from the UK than they can get locally. Buy a multi pack from Argos and split it down into individual items you can easily sell them on at a profit at the same time not taking up much space in your box.
Electronics are an issue in the Philippines as a lot of them are sub standard so would strongly advise researching what you really need. E.g. we haven’t bothered with a bulky stereo system but gone with a JBL! (Just Bloody Loud) with iTouch its not the cheapest option cost around £250+ but its compact and it is loud but high quality sound from it with no distortion. The other advantage being that there isn’t a lot of selection of music in the Philippines so having iTunes at your fingertips is a blessing. I was glad to see TV prices are starting to drop here in line with other countries. We picked up a 32” TFT the other day for P19,000 for the in-laws after their TV broke. So getting a good TV is easy enough but give it another 6 months should hopefully see a lot of money dropping off the bigger sets.
Furniture and household appliances are better searching around for and getting it right first time. Be fussy as there are a lot of “shiny” products as I call them. Basically products that look great but likely to break within a couple of months. Furniture often has skimped parts such as plastic brackets instead of metal under seats etc. Which is fine for the average Filipino but foreigners are generally at least another 60lbs heavier. So take your time and shop around I know when you first move you want to get things setup and over and done with but if you do it wrong its likely you will be making the same shopping trips within 6 months.
Height of a house is also important. I noticed at our friends house Don and Agnes that due to being in a sub-division there is very little airflow. Which was also compounded with concrete roads and walls surrounding the properties which make them a heat magnet and also leads to more expensive air conditioning bills. Ideally you want to be at least on the first floor (2nd floor if Americans as we have Ground floor in Europe). Reason being most properties are one storey high so spending most of your time on the next floor you should notice the difference instantly between there and the ground floor. Couple that with Bladed windows on at least 2 sides you can get a nice breeze through the house and during the day unlikely to need air conditioning at all.
One of the most important factors as a lot of people who are moving to the Philippines will be on pensions is the fact of using the exchange rates to your advantage. E.g. at Christmas time the Peso always improves due to the amount of remittances sent to the Philippines for family. If you fancy a gamble you could sell some of your pesos just before Christmas then buy back in January for a bit of a profit although I am not making any guarantees of profit here. Also with the instability of markets if you can hold onto payments wait until the time is right then convert a lot in one go before the rates drop again.
Why use remittance companies for transfers? Well so far I have probably sent around P3m to the Philippines in various forms. Western Union was a rip off and now the Philippine government also charge for collecting money its nothing short of extortion don’t use it except for emergencies. Bank transfers are also expensive as they generally charge for transfer and a poor exchange rate. So remittance companies are really the only sensible option as they offer a cheap transfer rate and normally only P1 lower than the rate of exchange. There are plenty of companies out there doing the service and it is something I hope to setup in the future myself as this will help with things we need to buy overseas having multiple currencies.
Selection of food isn’t as good and often more expensive? To be honest I find the grocery bill similar to what I would spend in the UK although is about 1/3 of what my parents would spend. Why is that? because I’m into more fresh produce and making meals where my parents have a lot of cooked meats and pre-packed foods. So is it cheaper for me in the UK or the Philippines? food bill wise eating at home is about the same eating out is at least 50% cheaper in the Philippines. Avoid imported goods and pre-packed junk and its likely to be healthier and cheaper. Also a lot of the products are fresh that day which has to beat UK supermarket quality. OK the oranges aren’t always perfectly round the way Tesco and other supermarkets want the goods but who cares its a fruit!
Electricity and water bills are high? A few people have mentioned this to me but remember I’m from the UK! our electricity is less than P1,600 a month including 1 x Air con unit, 2 Electric fans and, 3 laptops and a TV. The water we get free from a deep well except for bottled water which I find pretty cheap at around P100 a month for all our drinking needs. Gas I noticed has shot up from just over P500 to P750 which is a bit of a hike as we need it for our cooking although one Calor Gas bottle lasts 3 – 4 months which probably works out cheaper than the UK standing charge for having a gas connection to a house.
Transportation costs? We live about 30 mins from central Cebu so can be expensive if we have a lot of trips to make but generally once we are settled and upto our daily routines we go to the city maybe once or twice a month. Which would put our fuel costs at less than £10 a month. But we have started to use Makro a lot which is in the City as the food products are cheaper and the electronics are fairly priced. As well as for furniture for the netcafe so last month has been expensive on fuel. If we didn’t need to carry so much we could go via Taxi or Bus which would reduce the costs drastically as the bus services in Cebu are reliable and extremely cheap.
Visa Fees a killer? The problem I have with visa fees is they have fluctuations for some reason although to be honest if your going to be here at least 6 months and married to a Filipino then I would go for a resident visa its cheaper in the long run and saves all those trips to the immigration service which are not only time consuming but boring.
Making the most of your time is probably the most important thing to do in the Philippines people say to me about businesses that make P10,000 a month not being worth the hassle but I think they miss the point. P10,000 a month is a fair income for a small business in the Philippines but also it keeps you busy and from spendi
ng money in the malls and sitting on the rim of a San Miguel bottle. Most businesses I see in the Philippines seem to have a major factor that keeps them from expansion and a tight grip on profit margins its called loans! same as most Western countries the biggest share holder is the bank until the debts are paid. So setting up a business that costs P500,000 for example no doubt someone else will be paying more to the bank with the same setup than they would be earning. So bypassing that debt your ahead of the game and likely the business will function without too much problems once you workout the best way to operate it. I always advise increasing your income by 30% annually by other means as this offsets exchange rates and also puts money aside for medical emergencies.
So is my standard of living better or worse in the Philippines than the UK? To be honest the UK is one of the most expensive places to live on the planet and the standard of living is slipping every year due to the EU ripping the country off blind, a social benefit class that makes the workers burden for their inability to be bothered to work and all government assets have been sold off. In essence the UK has become a yard sale for other countries to pick at its assets leaving a shell of a country that still has no path to sort the mess out. The Philippines on the other hand is sitting stagnant with little change which has left it fairly stable in comparison. Our standard of living is fairly high in the Philippines without having to work 5 days a week just to pay the bills like we would be doing in the UK. We are pretty much ahead of the game at this time and things are likely to keep improving. The only real risk is medical cover as the UK its free but in the Philippines its an out of pocket expense. I can only see a prosperous future in the Philippines purely because we are working hard towards that future. If your retiring to the Philippines I would strongly advise finding something that you can develop as a small business even if its only paying a minimum amount as its keeping active that’s most important especially in the climate.