Retirement in the Philippines on $1000 is it possible?

Currently the Dollar has hit $42 to the Philippines peso giving you just over P43,000 which isn’t enough to live like a king in the Philippines but it is enough to live off. The key to good living in the Philippines though is keeping living costs down so you have extra money for things like travelling around to keep you entertained. Generally your costs run into 4 categories which is what I advise working to :-

  • Rent and related costs electric etc.
  • Travel expenses
  • Groceries
  • Emergency funds

Rent is something that varies considerably from place to place and normally living in somewhere like Makati you will see high rents tied with high electric costs. Heading out of any city region will instantly start to save you money. The way I try to sell this to people not keen on leaving the convenience of lots of restaurants, malls etc. is that living that way your unlikely to travel but also your going to generally end up in a rut of only going to the same places but over time your funds will become limited due to habits the whole point is to get the most out of retiring in the Philippines. Renting a condo may seem practical in the beginning but unless you have other incomes coming in things like your electric are controlled by your landlord and difficult to reduce on a regular basis only way is up. Getting something more provincial is a lot cheaper and know of people doing the simple life for P1,500 a month on a rented house. Yes its very basic and yes its only good for 1-2 people at the same time it suits their budget and needs as most of the time they are travelling around and its more of a base than a long-term home. They use the spare capital they would have spent on a home on letting them move around the Philippines. At the same time the sort of things we rent out here at P7,000 offers up a more modern property (check rentals at top of page) and as the community develops as I was discussing yesterday with Graeme (from Canada) and Kento from (America/Japan) that travelling around in the Philippines splitting the cost amongst the expats in one area suddenly everything can become very cheap. At the same time even if using motorcycles it also allows travelling with others for safety reasons. Planning ahead is not always possible though which is why I advise taking on a rental temporary and maybe moving around to find the ideal spot to retire.

Travel expenses you may be thinking about plane tickets but I am talking about the basic getting around as cars soon become very expensive in comparison to public transport. Security issues are a major problem as well as the fact if it does get stolen its unlikely you will ever see it again. Motorcycles seems to be the mode most people I know use if not using public transport and the same method I use as its quick, easy to park and cheap to run and maintain. If deciding to stop around the cities taxis and jeepney’s are the most convenient way round but even then if you can get away with a motorcycle its often a lot easier for getting where you want, when you want. Vehicles are overpriced here and often imported vehicles you struggle to get parts for which is why I advise going for something local but reliable and generally don’t waste money on something flash as it really is simply wasting money. Parking in mall my battered old multicab has been hit at least 7 times by other motorists trying to park as many drivers here simply can’t park or shouldn’t even be driving but they are and do.

Groceries vary considerably from person to person as although beer seems to be on many people’s shopping bills I generally drink about once every 2 weeks but I know people who consume what I do in a fortnight every day and more. Then you have the problem that eating habits vary from person to person. We often order pizza for example which gives us 2 family size pizza’s for P600 but if you skimp on the budget you can get a whole chicken for P130 add a bit of rice and you can feed 4 people for less than P200. Eating at home its difficult to compare as prices are expensive here as you will find although the Peso has grown stronger they have not altered the store prices well at least not down! Which makes supermarket prices in many cases more expensive than the UK or US especially on imported goods. Realistically you should when visiting here on “holiday” before moving look at the costs you presently have where you are and work out a shopping list monthly for everything. Then when you come here try and work out roughly how close to your present costs being here would cost in comparison to see if your going to be better or worse off on the food.

Emergency funds is something many people over look and personally I think 10% of every pension cheque should be put aside for this, illness comes in many forms here and some are cheap and some literally cost people houses if your from the UK it would probably pay if you can fly to go back to the UK with something medium to severe. For everyone else its worth keeping money safe for this and in a place you won’t touch it. If your using an international bank may pay to setup a joint savings account that automatically transfers a fixed amount every month into a savings account that you will only look at in emergencies (to stop it being spent). I have seen people here get into all sorts of problems even if they do have the cash monthly because they get into the local habits of spending what they have so having an emergency trip to the doctor and hospital they then had to take a loan until they got their pension payment not always a good idea as emergency loans here can cost as much as 20% in a month.