Tips on retiring in The Philippines from an Australian who is living there.
This article is written by John. John left Australia in 2011 spending 3 months in Thailand, 5 years in China, 1 year in Portugal, and now resides in the Philippines. He has been writing about his travels and observations of people and cultures during that time.
Unlike in Australia, the Philippines Government seem to want to do as much as they can to get you to retire in their country. As a result, they make it as easy as possible for foreign residents keen on retiring in the Philippines. If you have been looking to retire overseas, or at least live, outside of Australia, one would assume that you have looked at and travelled to the place in which you want to settle down. Whatever reason finds you contemplating the idea, be it divorce, separation, death of your partner, single, or maybe you’re married to a Filipina, you have to have the right mindset to make such a move.
If you plan on retiring in the Philippines, you are spoilt for choice when it comes to islands. The country is made up of over 7000 islands, so if you want to live near a beach, or on a beach, you’re in luck. You can even pick the colour of the sand you prefer – white, yellow, brown and black.
Tip: Rent first and spend a bit more time looking around. You will be amazed at some of the rental areas. City or small town? Advice? Pick a place close to a bigger city because you will not be able to live without at least some of the basic comforts you enjoyed in Australia, such as butter.
If you are married to a local lass then your location will more than likely be near her home town and certainly in her province. There is strong advice against doing that as well because you might end up housing a few extra family members.
Visas For Retiring in The Philippinnes
On arrival at the airport in Manila, you will receive a 30-day visa. You can spend another two years renewing your entry visa as follows:
2nd Visa – Another 30 days
3rd Visa – 6 months with a Residence ID card
4th Visa – Additional 6 months and ID card renewal, although your original ID card you got was for 12 months anyway.
After a few months here, you will have much better idea of where you want to live. Rental costs and location will help you decide.
SRRV (Special Resident Retiree Visas)
If you are keen on retiring in the Philippines, you may qualify for a SRRV. To qualify for one of these (and there are currently 4 types), you need to:
- deposit $12,600 – $19,000 (AUD) into a government bank account
- Have an income of at least $1000 AUD a month.
There are quite a few variations applying to the SRRV, they are not complicated, and it depends on your age, income, whether you are being paid a pension or not, dependents, and even disabilities. (http://www.philembassy.no/consular-services/visa/special-resident-retirees-visa-srrv)
If you opt for this type of visa, you won’t have to make that trip into Immigration on a regular basis. Your age for the retirement visa starts at 35, well short of retirement age in Australia.
It’s important that you keep on top of your visa expiry dates and ensuring you get renewals. At some stage, if you don’t get a SRRV, you will have to leave the country, re-enter and start the process again as outlined above – one month, one month, etc.
Spousal Visa 13a
If you are married to a Filipina you will get an entry visa and permanent residency. For more info on this you can go here.
Some Bureaucratic Quirks
Illogical bureaucracy is thriving in the Philippines so don’t be surprised to find each Immigration office in each city having slightly different rules. It can be frustrating and the officers handling your application will not be able to explain why. For example, on Mindanao you cannot get a 6-month extension, only 2 months at a time. The funny thing is, you can get as many 2 monthly extensions as you like, travel to Iloilo, and get a 6-month extension. You find you have been in the country for 18 months and have not had to fly out for a renewal.
The costs are all laid out on a big notice pinned to each immigration office entry wall, but somehow each office charges a little differently. In Manila and Davao, don’t try to get into renew your visa dressed in shorts and thongs (called slippers here). You must wear long pants and shoes. The officious security guard won’t let you in. If you’re in Iloilo or Cebu, shorts and thongs are okay!
Just recently, the cost of obtaining a 6-month visa has dropped from 13,800 php to 7,280 php. They did away with the priority charge (3,000 php), and decreased the overall visa cost per month.
Cost of Living
If you are over 65 or 67 now, and are on a full Australian pension, you are paid $830 a fortnight. On the current exchange rate (40.2 php = $1AUD), that’s 33,200 pesos, so when you convert that into a monthly figure, it’s about 72,000 pesos a month. While it’s nice to have savings and possibly even a home back in Australia, the monthly pension alone is sufficient funds on which to live comfortably when retiring in the Philippines.
Rent: This is your biggest monthly expense and depends entirely on where you live and the comforts you can’t live without, or perhaps you don’t want to live without. For example, electricity, water piped to the house, the internet and a proper toilet that has a sewerage system are basic requirements and not all places have them if you choose to live in a house in a Barangay (suburb).
Manila condo rents range from 12,000 pesos a month to 25,000 pesos. Condos in Davao or Iloilo, Cebu, Cagayan De Oro, Dumaguette range from 8,000 to 15,000. For this exercise, let’s take a median rent you will pay – 10,000 php / month
Power: 2300 php / month. Aircon is the big expense. You want the air conditioner running 24/7 while you’re in the house? Electricity will be about 4,000 php / month.
Water: 150 php a month but add drinking water = another 100 php / month
Food: If it’s just one mouth to feed, you can get away with 5,000 php a month.
Transport: a mixture of taxis, jeepneys, pedicabs and tricycles will cost you 1,000 php a month. Walking is NOT an option in 100°C heat and 85% humidity. If jeepneys and tricycles are not your thing, then taxis will increase your monthly costs to about 2,000 php.
Eating Out: 1,500 php / month.
Internet: 1800 php / month (5 Mbps)
Phone Charges: 200 php / month
Travel: You won’t be travelling every month, but to budget for it, you should allow 3,500 a month. You might take a ferry, you might fly, you might hire a car. You will have to pay accommodation for a couple of nights and eat at restaurants. So, allowing 42,000 a year might cover it.
Clothing: One good thing about living in the Philippines is that 3items of clothing is all you wear, plus thongs. Some days you might just be wearing one item of clothing – a bathing costume. Clothing is cheap if you buy non-branded items. Branded clothing costs more than in Australia. Allow 500 php / month, so about 6,000 php a year.
Visa Costs: Allow 1,200 php / month.
Your Style of Living
In the end, your costs will depend entirely on the way and style in which you want to live. The average costs above total just over 27,000 php / month. That’s about middle of the range. If you have a partner, it’s obviously going to add costs in some of the above categories. (Clothing, travel, phone, food, eating out, etc.) But even if you almost doubled it and really lived a good life, the cost would be around 50,000 php / month.
Let’s look at some capital costs you might incur if you are married or want to buy a house and car.
House Cost: 1,000,000 to 5,000,000 php for a house. ($25,000 – $125,000 AUD) There are some very nice places for sale around the 800,000 php mark. If you pay 2,500,000 up to 5,000,000 you are going to get a very, very nice residence. A condo in Manila will set you back around 5,000,000 and for that you will get a two to three-bedroom apartment with full security, a gym, swimming pool, and a kids’ playground. The same condo in another city will be half that price with the same facilities available.
Motor Vehicle: New cars cost more than similar models in Australia. The way people drive here and the road conditions, it’s advisable to purchase a good, reliable second vehicle and it might cost 300,000 php ($7,500 AUD). Getting your licence involves taking your Australian driver’s licence into the Transport Department (wear long pants and shoes please) and applying for a Philippines licence and paying the fee of about 1,500 php. Obviously, if you own a car then remove transport costs above and replace with fuel, insurance and maintenance costs. If you want a reasonable car you can go as low as 60,000 – 70,000 php.
Health / Medical: If you end up living in a province you don’t want to be falling sick. The better hospitals are located in the cities albeit the medical care you will get even in the better centres does not compare to Australia. You will have to pay for whatever you get and the cost of medication is more expensive than back home. You can also obtain a free quote for international health insurance online from Cigna Global.
Pensioner Discounts: If you have a Senior Citizen Card or a pensioner card from OZ, it will be honoured here in the Philippines. The discounts can be as high as 20%. You are also given priority at service counters and supermarket checkouts. A nice touch.
Banking: open a Philippines bank account as soon as possible. Once you have done that, set up transfer company (such as OFX), to send money to yourself from your Australian bank account. The savings are phenomenal. A $28 bank cost is reduced to $4 for amounts up to $12,000. ATM charges and currency conversion charges that will be applied to your Australian cards can add 2000 – 3000 php to your monthly costs. The ATM charge even here in the Philippines, if you don’t use the right one, is 200 php.
My personal note on retiring in the Philippines: I rent at a luxurious resort for 7,000 a month. My electricity is 2,500 a month, water is about 125 a month. I shop locally at the markets for fruit, vegetables, bread and drinks and spend about 3,000 a month. I go into the city once or twice a month and spend about 4,000 each time, so 8,000 a month. I use taxis sparingly, only when going into the city. I have a local bank account. I have a partner here so my costs are a little higher. When I travel I go by ferry and by bus. It’s cheap and you get a good night’s sleep in the bunks and on the bus you get to see a lot interesting places. I travel a lot, so my annual costs would be closer to 100,000 a year. I don’t want to buy a house or a condo because there are so many nice places to live, I would hate to tie myself to one residence, one town, one beach. I don’t eat out a lot as I prefer my own cooking. I invested in a fridge, mattress, a stove, a microwave and a guitar. The rest of the furniture was supplied with the unit. I’m on a full pension.
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