It’s a sight to swoon over. As the plane dips down, there they are—strewn across the South China Sea like glittering emerald necklets. Glimpsing even a fraction of the Philippine’s 7,107 islands gives most visitors a visual knock-out
With tropical sunshine, silvery beaches, world-class diving and jungle adventures, the Philippines is seventh heaven for vacationers. But this Southeast Asian country also has retirement-haven credentials.
For starters, it never gets cold. There’s no language barrier—its ever-smiling people speak English. And outside the capital, Manila, most expats live “comfortably” on $800 to $1,200 per month.
Granted, $800 won’t fund an Imelda Marcos lifestyle. But it will fund a lot of treats and household help. In the provinces, the monthly salary for live-in maids is around $65.
One location I visited was Dumaguete, a coastal town on Negros Island. Even penny-pinching Scotsmen can’t complain about having haircuts here. My husband paid 77 cents for his. Manicures and pedicures averaged $1.10; an hour-long massage in a salon, $5.40.
Another stop was Palawan Island. Lunch for two cost $5.66: We shared curried crabs, then sweet-and-sour fish with rice. San Miguel beer, a favorite Filipino thirst-quencher, was 88 cents a bottle.
At Johan’s at Baloy Beach, an expat neighborhood in Olongapo on Subic Bay, you can get American-sized portions of bacon, eggs, hash browns and fresh bread, all for $3.94. Coffee, too, of course.
In many places the monthly rent for two-bedroom apartments and bungalows is $200 to$300. In Olongapo, popular with retired U.S. servicemen, a 2,150-square-foot bungalow lists for $266 monthly.
Private health care is inexpensive and the Philippines is a popular destination for medical tourism. Everywhere I visited had private hospitals or clinics—Manila has top-notch, state-of-the-art equipment. (Public hospitals provide free treatment but essentially cater to the poor.)
For routine ailments, a private doctor is unlikely to charge more than $10 for a consultation. I paid $7—nothing serious; just swollen feet. This was at a Subic Bay clinic, an ex-U.S. Navy hospital specializing in cardiac treatment.
And here’s the clincher: The Philippines has a special retiree visa. If you’re over 50 years old and have a monthly pension of $800, you can obtain permanent residency. Pensions and annuities are tax-exempt. And there are “retirement” options for the over-35s too…more about that shortly.
Pros and Cons
Dazzling white sands… Flowers everywhere… Low living costs and inexpensive inter-island flights… No need to learn a foreign language… Expat enclaves…Yet the Philippines is rarely featured as a retirement destination. Why not?
Admittedly, it’s far away, but so is the rest of Southeast Asia. And while it’s a developing country, middle-class Filipinos don’t live third-world lifestyles.
As the Philippines was under U.S. governance from 1898 until the end of World War II, much is familiar—including a passion for boxing, baseball and burgers. Manila and Cebu have mega-sized malls, with restaurants and entertainment areas that surpass any mall I’ve seen in the States.
From loud music to carnivals and fiestas, there’s almost a Latin American beat to the streets. History reveals why. Before the islands were ceded to the United States, Spain was the colonial master. But most people combine partying with Roman Catholic devoutness. Churches are often standing room only.
Now, some possible drawbacks. Are you happy to rent? Aside from condos, foreigners cannot own property freehold. Unless married to a local, most expats rent or lease.
Of course, owning property in a land of active volcanoes may not be a great idea. The Philippines sits in the “Ring of Fire” and typhoons also sometimes cause severe damage. While pollution isn’t a problem everywhere, choking traffic fumes blight many built-up areas. Manila in particular is horrendously polluted.
Disparity between the haves and have-nots is huge. Beyond expat-friendly areas and gated communities with 24/7 security, you often witness some squalid sights. Some islands have a volatile minority—Islamic insurgency occasionally erupts in Mindanao, an island province in the far south.
So the Philippines won’t suit everybody. But pick the right spot, and it has enough positives to make it a realistic retirement option.
With a population estimated at 94 million, the country divides into three main island groups: Luzon, the Visayas, and Mindanao. With Manila as its pulsing heart, Luzon is the most populous island.
Subic Bay’s Freeport Zone: On Luzon Island’s west coast, Subic Bay is renowned for wreck diving. But wrecks aren’t the only attraction. If you want an American suburban lifestyle with private hospitals, good schools, duty-free shopping, cinemas and international restaurants in a resort setting, come take a look.
Covering 262 square miles, Subic Bay’s Freeport Zone (SBFZ) was a U.S. naval base until 1992. With guards at its access points, it’s effectively a gigantic gated community.
Hotels and tourist facilities lie within its bounds, but some expats find the SBFZ set-up too sterile—and rents are far higher than outside. But for Japanese and South Korean business people relocating with families, they probably seem reasonable.
The upside is that it’s astoundingly clean. Traffic rules are strictly enforced, it has its own police and fire service, and electricity supplies are mostly reliable—not always the case elsewhere. The water is reputedly drinkable straight from the tap.
When they pulled out, the U.S. Navy left behind their housing stock. As the former base is government-owned, homes can only be rented or leased. The main SBFZ residential areas are Forest Hill, Kalayaan and Binictican. The Bay area is backed by jungle, and it’s common to see monkeys beside the road.
Monthly rental rates for two-bedroom, 1,770-square-foot bungalows—former officer’s quarters with a yard and maid’s room—start at $500 but can reach $1,000 for larger two-story properties. Fifty-year leases start at $120,000. Contact Merle Alop Laroa to find out more information.
Olongapo: There’s more to Subic Bay than manicured lawns. Outside the SBFZ gates lie the real world and Olongapo City. Through Century 21, a 2,150-square-foot home in Olongapo rents for $266 a month.
Baloy Beach and Barrio Barretto are popular expat neighborhoods. Bars often have bulletin boards listing rental properties. I spotted a one-bedroom apartment for $135 a month and a two-bedroom apartment for $170. A furnished bungalow at Baloy, the beach neighborhood, was $329 per month.
Until walking in, I didn’t realize the Sit-n-Bull bar-restaurant in Barrio Barreto was also a VFW (Veterans of Foreign Wars) post. But many retired U.S. navy and military personnel live around Subic Bay, and it’s not the only veterans support group.
I didn’t want to disturb the poker-school guys—it looked like a serious game—but outside the bar I had a quick chat with an American retiree married to a Filipina. Including rent, their monthly budget is around $1,100.
Palawan Island: Shimmering turquoise, jade and bright electric blue, the colors of the silken seas around Palawan are astounding. Myriad rainbow fish dart through the coral—it’s estimated around 80% of tropical aquarium fish come from these waters.
Island-hopping…snorkeling for underwater treasures…eating barbecued fish and squid rings at a thatched beach shack… A boat trip to the white-sand islets of Honda Bay was irresistible. A glorious day—and the magic continued when fruit bats flitted through a coffee house garden at dusk.
Palawan is 265 miles long and is often called the Philippines’ “Last Frontier.” It’s both a main island and a province with around 1,800 satellite islets of the Robinson Crusoe variety. It stitches together pristine rainforest, mountains, underground rivers, stalactite caves and marine parks. Diver Jacques Cousteau once remarked it was the most beautiful place he had ever explored.
If simplicity appeals, Palawan may be your unspoiled paradise. But it’s too back-to-basics for me. Electricity “brown outs” happened three nights running, and outside the luxury resorts, few places have back-up generators. Much of the island has unpaved roads, and the only ATMs that take international cards are in the main town, Puerto Princesa. Even there, I couldn’t find any real estate contacts. Locals said small houses rented for $129 a month, but you’d need to ask around. You can find a useful classified-ads site here. I saw a furnished house in Puerto Princesa for $200 a month.
Dumaguete, Negros Island: In the Visayas, Dumaguete is on Negros Island—a short flight from Cebu City or three hours by fast boat. I didn’t explore the whole island, but Dumaguete, in its southeast corner, is a small, laid-back seaside city with a U.S. colonial heritage. Diving and good beaches lie a few miles south of Dumaguete. The city’s seafront promenade rocks at night. Italian, Mexican, and even Swiss restaurants cater to expat tastes. While I was there, one of the bars threw a reggae party—tremendous fun.
I spent a morning with Archer Allusada of RealPhil, a Dumaguete agency affiliated with Islands Properties. Archer says around 1,000 foreigners live in this eastern part of Negros. Current furnished rental properties include an 860-square-foot beachfront bungalow for $387 a month. It’s 20 minutes from town. Apo Island, a famous dive site, is 40 minutes offshore by outrigger boat.
On Dumaguete’s outskirts, a partly-furnished house is $215 a month, while $474 rents a 1,774-square-foot, furnished bungalow on a 3,225-square-foot lot. It’s also on sale for $84,000.
Should You Buy or Rent?
Foreigners can buy a house, but not the land on which it stands. Land leases are up to 50 years, renewable for another 25 years.
Some expats married to Filipino citizens put ownership under their spouse’s name. You could own through a corporation, but seek good legal advice. Corporations can only be 40% foreign-owned.
Provided the foreign ownership of a building doesn’t exceed 40%, you can purchase condominiums. But as most condos are in Manila, Cebu and Angeles City, it means urban living. And city life is more expensive.
Foreigners often prefer Cebu to Metro Manila. I do, too. A large coastal city, Cebu has good schools and hospitals, with the beaches of Mactan Island and diving not far away.
Through www.islandsproperties.com’s Cebu office, a 1,236-square-foot furnished condo is $115,000, or can be rented for $861 a month. Amenities include a swimming pool, tennis and basketball courts and a club house. Around 30 minutes from Cebu’s center, a 1,344-square-foot rental house in a gated sub-division is $387 a month.
A road bridge links Mactan Island to Cebu City. Although Mactan has beaches, note that it’s fairly built up—Cebu airport is here. A 634-square-foot condo in Hilton Tower (beside Hilton Cebu Resort & Spa) is selling for $129,200 negotiable. A parking space and private beach access are included. The quarterly association fees are $200.
The country’s “Entertainment Capital,” Angeles City is an hour inland from Subic Bay. Once home to another U.S. military facility, Clark Air Base, Angeles mostly attracts single male expats and visitors. Guess what form the “entertainment” takes…
Listed studios and apartments for $130 to $400 a month are plentiful. Some are short rentals. But Angeles is assuredly no paradise for couples.
How to Retire to the Philippines
A government body, the Philippine Retirement Authority offers a special retiree visa to foreigners. It entitles the holder to permanent residence and multiple-entry privileges. Requirements are as follows:
With a pension: You must be 50 years of age or above. You need to place a time deposit of $10,000 in a Philippine bank for the duration of your stay, plus have a monthly pension of $800 for a single applicant and $1,000 for couples.
Without a pension: If you’re 35 to 49 years old you need a $50,000 time deposit. If you’re 50 years old and above you need a $20,000 time deposit.
There’s also a one-time joining fee of $1,400 for the principal and $300 for each dependent.
The Malaysian Alternative
As Malaysia is regarded as a Muslim country, those who know little about it often steer clear. But I love Malaysia and its rainbow culture. In general, it has a much better infrastructure than the Philippines and hardly any sleaze. The downside is higher living costs.
A former British colony, Malaysia is a hodge-podge of Malays, Chinese, Indians and expats from all over. English is the language that binds the different ethnic groups. Sure, there are mosques—but also Christian churches and Chinese and Indian temples. Under the constitution, religious freedom is guaranteed. Most Malay women cover their hair, but it’s nothing like Saudi Arabia.
Most expats are in the steamy capital, Kuala Lumpur, or on Penang Island. The “Pearl of the Orient,” Penang has a majority Chinese population, arguably the yummiest food in Asia, golden beaches and a fascinating colonial history. But you’ll also find westerners in Malacca, another colonial heritage town, and even in the Malaysian half of the jungly island of Borneo.
Malaysia also has a retiree program (MM2H) for foreign nationals, but financial requirements are quite steep. Applicants aged over 50 must place a fixed deposit of $45,700 (RM150,000) into a Malaysian bank and have a monthly income of at least $3,050 (RM10,000). You can find out more details here.
Overseas remitted income is tax-free, and a big plus is that foreigners can purchase property freehold—houses with land included. But the minimum price requirement for foreign nationals buying property recently rocketed to $152,500 (RM500,000). That’s double the 2009 rate.
Expat blogs suggest the move came about through pressure from developers. They were having difficulty shifting higher-end properties that few Malaysians could afford. But you’re not required to buy property to retire under the MM2H program. You could rent.
On Penang, 800-square-foot condos for rent near the university start at around $305 a month. Rents are more expensive near up-market Gurney Drive, Tanjung Bungah and Batu Ferringhi beach. At Tanjung Bungah, condos in the newly built Grand Ocean all have sea views. Furnished rentals are $457 to $701, with living space ranging from 1,076 to 1,248 square feet.
The climate is hot, humid and tropical. The average year-round temperature is 77˚ F but often soars into the 90s F. There are three seasons: hot, dry weather from March to May; a rainy season that often brings typhoons from June to November; and a relatively cooler dry season from November to February.