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How much for a good Quality of life in the Philippines?
So, what is the cost of living in the Philippines? What is the cost of living in Manila?
The reality is that I don’t know you, and you don’t know me. How can I tell you how much you will need to have a good quality of life in the Philippines?
If you are considering or have decided to move and enjoy the quality of life that the Philippines can offer, I will assume you have a good income.
Now consider where you live right now? How much does it cost you to live each month?
Now consider a part of the same town or city near you where people live on minimum wage? Ask yourself how they manage?
See what I mean; if I could give you a solid figure on the cost of living in the Philippines, I would be running to the post office and jotting down the first six numbers that hit my head.
So, what considerations do you need to look at and figure out?
First of all, where is the money coming from?
To live life comfortably in the Philippines as an expat, you are going to need a source of income from outside of the Philippines. This will be either a pension or two, money from selling up in your hometown and maybe a source of income from online work.
When you are looking at your pensions and your other income, you need to keep the taxman in mind also. For example, if I was to own a house in the UK and rent it out while I lived in the Philippines, I would have to pay income tax on that rent.
Income from the house is now classed as my first income and taxed as such. Because I own a house, I cannot be “Non-resident for tax purposes”. This means that my pensions, state, and private workplace pensions are now classed as income and taxed at 25% minimum.
The Philippines have figured out that ex-pats are earning good money online. Now you need to pay tax on your Philippines earnings. As a result, even in the Philippines the cost of living is on the rise.
So for me personally, I will sell the house, move to the Philippines and declare myself as non-resident for tax purposes. Pensiones received from the state and privately will be granted in full. I will, however, still need to pay tax in the Philippines but only on my Philippines income.
How do you define a comfortable life?
My partner and I have discussed this at length, and at the outset, our definitions of a comfortable life were worlds apart.
I was coming at the question from a first world aspect whereas she was looking at it from a third world aspect.
My partner’s comfortable was a basic house with food on the table and money to pay the bills, and enough left over to give to her parents. To have the family around her and all healthy. If you don’t know what a basic house is in the Philippines, look it up on google.
For me, the list was a little more extensive.
I want a nice house with enough En-suite bedrooms for our family and the occasional visitor. A good-sized kitchen with appropriate white goods. The living areas need to be nice and big, so I don’t feel like living in a prison cell. A good car for the day to day use and a garage with workshop facilities in it.
Along with this, I need an income that will pay the bills, allow us to save and have at least one holiday per year.
So now you can see the differences between my idea of comfort and my partners. For me, to put a price on the cost of living is massively complex.
Comfort also includes the type of food you want to eat. If you’re going to eat like a local, then life will be cheap. If you’re going to eat as you do in the west, then you will pay a premium.
Can you live without air-conditioning? If you can, then your electricity bills will be cheap, but expect to pay if not. Gas turbine power stations generate electricity. The Philippines currently does not produce its own gas so it is imported. Needless to say, electricity price varies with the price of imported gas.
Living in the UK, I am comfortable in the knowledge that if a member of my family or myself fall sick or need emergency medical treatment, then I head to the hospital and regardless of treatment received, it is free.
Living in the Philippines, you need medical insurance and understand what you will get for your money. I intend to have the best insurance I can afford, and the cost of an emergency flight back to the UK if I need treatment that if received in the Philippines would be cost-prohibitive.
As an Expat you should always have that flight money saved away just in case you need to get home.
So how much does it cost to live comfortably in the Philippines? That is going to be different for everyone.
In my next article I will look at the pros and cons regarding housing and look at building or renting.