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While the cost of living in the Philippines has increased, it remains more affordable than many Western countries due to lifestyle options, a less hyper-industrialized economy, and a different cultural focus, but expats should still have contingency plans and be aware of global inflation and instability.
The video addresses concerns that the Philippines is becoming too expensive for expats, acknowledging that costs have risen since the pandemic. However, it argues that the cost of living is influenced by more than just prices alone. Factors like lifestyle options, such as the absence of mandatory car ownership and the availability of smaller, more affordable housing, significantly reduce expenses compared to countries like the US. Transportation costs, for example, are a fraction of what they would be in America, and diverse housing options, from micro-apartments to larger homes, are more accessible.
Furthermore, the Philippines is not a hyper-industrialized nation like the United States. This means that life is not solely dictated by the demands of private industry or the need to live in expensive urban centers for high-paying jobs. While major cities like Manila and Cebu are pricier, many smaller towns and communities offer a more moderate cost of living. The cultural emphasis on family and social activities over constant work also contributes to a different economic landscape, where status symbols like large houses and fancy cars are less prevalent, thus moderating overall expenses.
The presenter suggests that expats should have contingency plans and consider alternative countries if the Philippines does become unaffordable. Nations like Mexico, Thailand, and Colombia are mentioned as having a lower cost of living, pleasant weather, and friendly people, offering a similar quality of life. However, expats must also be prepared for global inflation and instability, which can drive up prices in any location. Natural factors like typhoons and a slower pace of life in the Philippines might also deter some, potentially keeping costs more manageable than in rapidly developing or highly industrialized nations.
Yes, the Philippines can still be affordable for expats, especially when compared to many Western countries. Lifestyle choices, such as opting out of car ownership and choosing smaller housing, significantly reduce expenses. The country's less industrialized nature also contributes to a more moderate cost of living.
The cost of living in the Philippines for expats varies greatly depending on lifestyle and location. While prices have increased, opting for local transportation and smaller accommodations can keep expenses low. Cultural differences and a slower pace of life also contribute to a different economic dynamic than in highly developed nations.
Living expenses for expats in the Philippines can be kept moderate by making conscious lifestyle choices. Avoiding the need for car ownership and choosing accessible housing options are key. Additionally, understanding that life is not solely centered around work, unlike in hyper-industrialized economies, can help manage expectations and budgets.
The cost of living in the Philippines has seen an increase, particularly since the pandemic. However, the overall affordability for expats is still considered favorable when compared to many Western countries. Expats should remain aware of global inflation and potential instability that can affect prices anywhere.
If the Philippines becomes too expensive, expats can consider other affordable destinations like Mexico, Thailand, and Colombia. These countries also offer pleasant environments and a lower cost of living. Medellin in Colombia and various locations in Mexico and Thailand are popular choices for budget-conscious expats.
Philippines expat affordability is influenced by lifestyle choices, such as prioritizing local transportation and housing options over Western standards. The country's economic structure, which is less hyper-industrialized, and cultural emphasis on family over materialism also play a role. Natural factors and a slower pace of life can also moderate costs.
A commenter shared that their Grab bill for a month in Manila was about $78 USD. This covers transportation around the city without the need for car ownership, including payments, insurance, gas, and maintenance.
Yes, housing is significantly more affordable in the Philippines compared to the US. Factors like the availability of smaller apartments and the cultural emphasis away from large homes and cars contribute to lower overall expenses.
One commenter spends around $7,000 USD per month while splitting time between Bangkok and Manila, stating they can live very well on this budget. Another expat living in a rural area of Mindanao spends about 100,000 Philippine pesos monthly.
While costs have risen, many expats find the Philippines still affordable due to lifestyle choices like not owning a car and opting for smaller housing. However, some areas and rental markets are becoming more expensive, potentially pricing out expats who rent.
If the Philippines becomes too expensive, expats can consider countries like Mexico, Thailand, and Colombia. These nations are mentioned as offering a lower cost of living, pleasant weather, and friendly environments.
The exchange rate significantly impacts affordability for expats. For instance, the US dollar has strengthened against the Philippine peso, making it a more favorable year for retirees living off US Social Security.
One commenter mentioned renting a nice, small, modern 2-bedroom house with a large gated lot and parking for 8,000 Philippine pesos (approximately $145 USD) per month in a small city on the edge of Muslim Mindanao.
0:06 In today's video, I'm addressing the question: What if the Philippines becomes too expensive? I do think young foreigners, especially living here in the Philippines, should have some sense of a backup plan or other places they can go, some contingency plans. One of the biggest criticisms that I feel that we face is, 'What if it becomes super expensive in the Philippines one day?' I plan to address these concerns in this video, so let's go ahead and get into it.
0:32 Hey YouTube, Alex here. In today's video, I'm in Dumaguete and I wanted to answer the question: What happens if the Philippines becomes too expensive? Look at that sunset behind me, it's absolutely gorgeous. A lot of guys these days are complaining about the cost of living here in the Philippines, about how it's no longer cheap. One day, we're all going to get priced out, and there's this assumption that one day the country will be too expensive and people won't be able to afford to live here.
0:59 I thought I'd dispel some of these rumors, or at least address some of these concerns. Because I think, yeah, it's fair to say the country is not as cheap as it used to be. It is a noticeable difference before the pandemic and now after the pandemic, but there's more to it than just pricing alone that contributes to the cost of living. So without further ado, let's get into it.
1:22 Number one is that it's the lifestyle options that can make a place affordable. It's not just cost of living, it's also your optionality. Back in the US, I cannot live without a car, it's just not possible. Most of you are probably in the same boat. That's part of what makes the US expensive: you're paying for car repairs, you're paying for oil, tire rotations, all these costs that if you're living in some other countries or some other cities, may not be an issue for you.
1:54 My transportation budget, I spend roughly $30 equivalent on my transportation budget here in Dumaguete. It would be more expensive in Cebu or Manila, but even so, it would still be much less than my cost of owning and maintaining a car. Where in the US, when I lived in California, I was paying over $100 per month just in parking fees.
2:15 If you're somebody who wants a really small apartment, they're outlawed in much of the United States. You're not allowed to build those, and you're not allowed to convert pre-existing apartments to those. Where in other countries, they allow for that, they allow for mixed-use development in more locations. They allow for you to have apartments that are very small. They allow for you to go anywhere from a micro apartment to a large home in the same city.
2:43 And they aren't necessarily always the biggest cities. Like Dumaguete has plenty of budget-friendly housing. I have friends that live here in 3 to 4,000 peso per month apartments, all the way up to 60,000 per month Airbnbs and everything in between. In the US, in many cases, zoning restrictions actually make a lot of budget housing illegal, so you just don't have that option that you would have in some other countries.
3:11 That alone, your rent and your transportation options can dramatically reduce your cost of living because you're simply not having the same footprint that you're required to have in the United States in most places.
3:27 To add to that point, here is my homestay. You'll find these throughout the Philippines where families will build these compounds, and then maybe a son or a daughter moves out, maybe they get married, maybe they get a job in another part of the country or the world. They end up needing to move out, but the family still has the space. And so why not rent it to a traveler, a bachelor, maybe a couple?
3:52 This is the father of the host family, and he's such a thoughtful man to help provide me with the ride to the road. Why did the chicken cross the road?
4:06 Number two is that the Philippines is not a hyper-industrialized country like the United States. In the United States, everything is designed around the demands of private industry. It's not the same here.
4:16 In the US, there are many towns which are basically work towns. They exist because there was a factory there. They are a hub of industry and life basically revolves around work. Where in the Philippines, it's still a fairly agrarian society. Now, what does this mean? It means that there are plenty of small towns and farming communities here in the Philippines. Now, is there industry here? Absolutely, but it's not to the same extent as what you're used to in the US, particularly outside of Manila.
4:47 You're not going to have tons of manufacturing. You know, outside of Cebu, outside of CDO, those cities, there's really mostly light industry. You'll notice that when you come here to the Philippines, it's not like everybody spends all of their time at work or at home. People have church, people have different kinds of social groups. A lot of people have kids here, so they're spending time with school-related functions. It's not this work, home, work, home, work, home oscillation that many Americans experience.
5:24 Some of the high cost of living in the US is that way simply because people have a demand to live in a certain area to work. Part of why Wall Street is expensive, New York City is expensive, you have a lot of finance types who earn a lot of money who are only able to earn that kind of money there in New York City. And so all the real estate, the food, transportation is priced accordingly.
5:49 Similarly, with the San Francisco area, a lot of high-paid tech people live there. And so landlords know, 'Hey, we can charge a lot for rent. We can charge a lot for all these other things.' In a country like the Philippines, that isn't so hyper-developed, pricing has to be more moderate.
6:04 Now, am I going to say it's cheap here? No, I think that's disrespectful or inconsiderate of the Filipinos who work very hard for their money, who don't find it to be cheap. If you are talking about the costs in dollar converted amounts, then it is less costly in most of the Philippines than in the US because you don't have these hyper-industrial areas.
6:25 And in the places in the Philippines that do have a lot of industry, it is pricey. Right? Manila is not a cheap city. Cebu, not a cheap city. Davao, not a cheap city. Even Cagayan de Oro has become more expensive because these are where the majority of the jobs are located in the country. If you're not interested in farming, then you're probably going to go to one of these big cities, like Elo-Elo for example, to try to find a job, maybe in healthcare, maybe working for a business.
6:54 It's not the same level of hyper-industrialization that we're used to in the US. Some would say that there's not as much manufacturing in the US. I'd agree with that, but there is still plenty of industry based around offices, commercial real estate, and life for office workers still revolves around office work. Even if you're working from home, which really seems to blur the boundary between work and life.
7:19 Then yeah, definitely. I mean, if you want to be in a productive home, if you want to be in a decent neighborhood, that's extremely expensive in the US relative to wages. Some would say, 'Oh, I can live just fine in a bad neighborhood and work my office job.' But is your boss going to tolerate crazy loud noises in the background when you're trying to get things done? Probably not.
7:41 For most of the Filipino people that I know, life revolves around family as opposed to work. Many Filipinos do not seem to have the extreme sense of materialism that we find in the western world, where people aren't necessarily working to take care of their families as much as they are trying to work to get that big house, to get that fancy car, to get that latest iPhone every year, to buy these status symbols, to be able to show off their value.
8:07 In the West, it seems like we're often judging people based on their wealth. And one of the first questions that people often ask me in the US is, 'What's your job?' That's usually the first question I get asked: 'What do you do for a living?' Here in the Philippines, it's more often, of course, I know some of this is because I'm obviously not Filipino, but I'm often asked, 'Where are you from?' The conversation takes a totally different direction. We talk about the Philippines, we talk about life here, we talk about activities. We're not talking about work.
8:37 Because I find in the US, often people are trying to size you up to determine, 'Hey, is this person going to be valuable to me or not?' I don't as often have that experience here in the Philippines. It makes sense to me that in a country where people can lean on their families more, they are not going to be so self-centered to the extreme that we see in the US.
8:58 Finally, I just don't get this sense here in the Philippines of, 'Okay, there's the factory, okay, there's your house, and this is going to be the next 30 years of your life.' It seems to be more balanced than what I'm accustomed to back home.
9:12 The next point is that you may need to find an alternative to the Philippines. Now, one of the things that makes the cost go up here is, one, of course, some foreigners coming here with a lot of money. But two, also, it's a growing population. And to contrast that, you may want to look at some countries with a declining population.
9:31 There are many countries in the world with aging populations. They have more and more housing stock with every year. They have more and more options. They don't have lots of immigration. I have some examples of countries that I really like. Take your pick. Most of the countries in the world, aside from those in Sub-Saharan Africa, have declining birth rates. Not all of them have immigration policies that are increasing demand on housing.
9:59 There are plenty of places where housing is not in short supply. And I think that's just the start of the challenge. There are going to be some other issues, but there's plenty of good food in other countries. There's plenty of transportation options in other countries. Some will say, 'Oh, this one I wanted to live in has become too.'
10:18 One I wanted to live in has become too expensive. I'm sure there will be some other countries that become more desirable for expats in the future. I don't know which countries those will be, but plenty of places increase in popularity and decrease in popularity. Places that are popular today may not be popular tomorrow, and the places that are popular tomorrow may be lesser known today.
10:41 If you find a gem, don't feel bad about keeping it to yourself. There are some places that I've been to that I'll keep for me and my channel members only because there are some places I just don't want to see get flooded. Call it selfish; I think everybody's selfish, but I have some places in my back pocket that I really like. If the Philippines turns out to not work out for me, then I've got some other options on my radar.
11:07 I think this lifestyle works best for people who have flexibility. I think for many of us, it's not the USA or the Philippines; it's the Philippines or some other country that offers a better quality of life, better value for money, better weather, better dating opportunities. There are a lot of reasons to not want to live in the US these days. If it doesn't work out from here, I've got some other options that I'm willing to check out.
11:28 I love the Philippines, but I'm not counting on it staying the same forever. Point number three is that many people who enjoy living in the Philippines would also enjoy living in other countries with a moderate cost of living. Some of the examples that come to my mind are Mexico, Thailand, and Colombia.
11:46 Are these places as inexpensive as they were relative to the US five or 10 years ago? Yes, they are not in real dollar terms at the same price levels. But if you consider how much cost of living has gone up in the US, they aren't at the same price levels as the US. There's still that opportunity for geo-arbitrage where the cost of living is less than what you're used to experiencing in the US.
12:13 I think the US has become the most expensive country in the world, and anybody who's living in the US going to many different places in the tropics will experience a drop in the cost of living. Many of the people that I've met here in the Philippines have been to Mexico, Thailand, or Colombia, and they didn't absolutely dislike those places. They just prefer to live here.
12:33 But if the Philippines became cost-prohibitive to the point where they couldn't afford it, they'd be willing to consider some other places. I'm also open to living in one of those other countries if circumstances dictated that that would be a better fit for a time. What those countries share with the Philippines is not just a lower cost of living, but also nice weather, fresh food, and friendly people.
12:56 Now, what those countries don't have that the Philippines has is the prevalence of English. Future expats should plan for inflation; be prepared for prices to go up in many countries. It's higher than the United States, the difference being that the baseline price is not quite so extreme.
13:14 Even more so if you're in a hot city or a city you think will be hot in the future. And I don't mean temperature, but I mean a very popular city, a city that's become much more expensive in recent years, is Medellin, Colombia. I spent several months there in 2021 and really enjoyed my time there, but I've heard rent has gone up substantially there.
13:34 So, be prepared if you're not purchasing a property, which I generally don't recommend purchasing a property, but that's another discussion. Then be prepared for your cost of living to go up, maybe higher than what you expected.
13:46 So for me personally, I'm focusing on getting assets that rise with inflation. They may not match the inflation rate, so I have some other plans in mind as well. Don't just say, 'I've got this pile of cash; it's going to last me forever.' Be prepared for costs to go up.
14:02 Be prepared for the prices you pay tomorrow to be higher than the prices you're paying today. And also be prepared for global instability to affect pricing. Be prepared for pricing to go up. We've seen this in a city like Tbilisi, Georgia. I haven't yet been there; I've done a lot of research into it, but due to ongoing global challenges, then costs in Tbilisi have gone up substantially from what they were.
14:23 I've heard affordable accommodation options are not so easy to come by these days, and rents are much higher than they were a few years ago, similar to Medellin, Colombia. So the place that's economical today could become expensive tomorrow, depending on changing global circumstances.
14:41 Bringing things back to the Philippines for point number five, there are certain factors that will moderate the cost of living in the Philippines due to some would-be expats or some foreigners not wanting to live here. And you might be asking, 'Man, this looks like a beautiful place. Look at this nature behind me.' Absolutely gorgeous, but you have to think about the inclement weather.
15:02 The Philippines has been subject to various typhoons, major storm events, even earthquakes, volcanic eruptions, and such factors. Really, these can serve to scare off some people who would love to live here otherwise. I see it all the time in comment sections: 'Man, I'd love to live in the Philippines, but I'm really concerned about a volcanic eruption,' or 'Man, I'd really like to live in the Philippines, but the potential for an earthquake really scares me.'
15:29 These factors are unavoidable, right? If you live here in the Philippines, you've got to accept the fact that depending on where you live in the country, then you could be dealing with some major weather events throughout the year. And maybe nothing happens this year, but maybe something major happens in a future year.
15:46 I don't wish for it to happen. I think these are always very tragic. My heart goes out to the families and to the people who have been impacted by these adverse weather events. But you'll find when you travel throughout the country, you'll meet people and talk to people who have experienced these inclement weather events, and it's really unfortunate.
16:02 I've talked to a buddy who's had issues with floods in his city. It's always really unfortunate, but it's one of those things that's out of our control. And as a foreigner, if you haven't experienced these kinds of events, maybe you're from a country that doesn't have these kinds of inclement weather issues, then you may be totally caught off guard.
16:21 And that's just one of those issues that may make other options, other countries, or places that don't have the rain storms, that aren't on the Ring of Fire, more appealing to some would-be expats. Even here behind me, you can see the storm clouds rolling in.
16:35 And maybe it won't be an issue, right? Maybe they won't go anywhere. But if you're a person who doesn't like rain, you don't like being on the Ring of Fire, it's something to consider that not everybody will stay in the Philippines forever.
16:48 Also, you've got to think about the types of people who may be high rollers that could really spend lots of money here in the Philippines. Are they going to be comfortable with the more relaxed pace of life they're maybe used to snapping their fingers and having everything happen? In the Philippines, you have to be patient; you really have to bring your patience here.
17:09 Things are probably not going to happen as fast as what you're used to in the United States or in Australia. And so, some of those people who could spend several thousand per month, they may not be happy here. They may come here and be like, 'Man, I can't just tear off down the highway going 150 km per hour. I can't walk into a restaurant and get my food 10 minutes later.'
17:31 In some cases, I really have to slow down to an extent that I don't want to. And so they may find themselves going to Hawaii or some other place that's got a little bit faster pace than here in the Philippines. Now, I personally enjoy that pace; I find it to be a refreshing change, but some of those people that you might call high rollers, some of them are going to have a hard time adjusting to that slower pace of life here.
17:54 So thank you so much for watching. Let us know what you think down in the comments. Are you worried about the cost of living skyrocketing here in the Philippines? Is it a place that maybe is not going to be on your radar after a while because you think, 'Man, it's gotten so expensive, I can't afford it anymore?' Let us know.
18:13 Otherwise, maybe you've looked at the prices and you're like, 'Wow, that seems like a pretty economical option for me compared to what I'm used to paying.' Next, if you want to help support the channel, give us a thumbs up; it helps with the YouTube algorithm. Finally, if you want to see more content like this, subscribe to the channel down below, and we'll see you soon.
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