The IRS is being asked to police far more than taxes these days. As a citizen of the USA, even if you move to the Philippines or other foreign country, you still have federal obligations and the IRS is often used to enforce them. Congress seems determined to increase the power and reach of the IRS. There is also a good deal of misinformation out there about what is required.
On the second of October 2015, I sent myself money from my USA bank account to the Philippines. Just like I have been doing for the last seven years. The last six, have been to my bank account. Everything appeared to be normal but there was one early warning sign. I usually get notices on my phone that the money has been received. I never got that notice. I did get an email and my Xoom account showed the money transferred within 30 seconds which is also routine. My trip to the bank though, it was anything but routine. I tried to withdraw the money from my account and only got a message “Your transaction could not be completed.” I’ve never seen that message before. I checked the balance, Jessie was with me and she let out a gasp. I had sent myself almost 70,000 pesos and my balance was zero. What is worse, I have only 400 peso or about $5 USD in my pocket left.
If you’re an American or probably from most other Western nations, you are probably not going to like the way bills are paid in the Philippines. In short, you pay your bills in person. Not only are they not usually paid via postal service, you get up and go to each utility company and the bank to pay your bills. There are indications that things are improving. Things do often get better here. When I first arrived here in 2008, you could not use a foreign credit card at most stores. Now, at the larger retailers and many smaller shops you can use them. Often with a 5 percent surcharge but you do often have the option.
Paying your bills electronically, either via your bank or the providers website is practically, if not totally, unheard of. Even when you order something online you have to go withdraw money from your account and deposit it in their account. Then contact the seller and give them the information so they can verify and process your order.
If you have heard of the term “Kano price,” then you probably know what it means. For those that do not know the meaning of this phrase it basically means the price that Filipinos charge foreigners. Many and probably most Filipinos will charge us more for things we want to purchase. This is a very real practice and you will, from time to time, pay the Kano price.
I often hear it referred to as racism. It has nothing to do with race. That is just you being full of yourself. You are white? So what, there are many of us here. Get over yourself, you are not that rare nor important. If you are Japanese, Chinese, Korean or Indian then you are the same race as namely, Asian. You too will be sometimes be charged the Kano price. I do not see it as racism. It is just business but when it is excessive, it is bad business and a good way to lose a customer.
You can get cheap electronics in the Philippines. I did just the other day, a Samsung One Note 8 for $75. Don’t get too excited though there is always a “but” and I’ll get to that later in this article. One of the first things you will learn is that electronics are more expensive in the Philippines and if you go to the malls and buy name brand products you’ll pay a lot more for them. I checked the price on a Cannon 7D and found that it would cost me about $1000 more here than it would at Amazon. There is a five percent tax on imported electronics but that doesn’t explain the excessively high prices here and nor does shipping. After all, most of those products are imported into the USA as well as other Western nations.
Living in the Philippines on a pension or fixed income means you might see your spending power decrease. Of course, this is true anyplace and has long been a problem for seniors. I’m not exactly a senior but I’m knocking on the door and now ride in the same boat as they do. I retired early, around 45 due to disability caused by lupus. That’s an autoimmune disorder where your immune system becomes confused and attacks your own body. Mine’s not too bad but over the year it has taken its toll.
When I arrived here in February of 2008 the dollar was at the lowest point since I lived here. It was lean month but only because I spent most of my money on the way over. It was a month of lots of dried fish. It stinks but its good haha. One problem, it’s mostly air and bone. Bones that you can crunch and swallow. I could eat a trainload of them and I think I’d still be hungry.
Many potential expats are looking for a way to earn an income while living overseas. Some seek employment in a foreign land. Not a bad option for developed nations in Europe and other places in Asia. It isn’t a very likely option for the Philippines. I do have some ideas though if you are looking for an income for expats.
There are some expats that find work here. They are the exception though and many that do are working illegally and for very low pay.
The question “How much money do I need to live in the Philippines?” is one I get often. This is a question that often comes in email and is a question better asked in public so that it will help others. Of course, there is no one answer fits all for this question. I require more money that many due because of my medical bills. The cost of living in the Philippines is much lower than it was in the USA for me. Some say it is higher, I don’t see how it could be. Some things cost more. The cost of services and housing is where you will likely have the biggest savings.