Cebu City Philippines and the Shrinking Dollar

Cost of living in Cebu Philippines and Camotes Islands Cebu, Philippines. Many expats living in the Philippines are sharpening their pencils and watching their spending habits much more closely as the dollar continues to drop against the peso. Currently the exchange rate is approximately $1.00 to P40.00. That’s a BIG difference from just three years ago when the dollar fetched P56.00. To make matters even worse the dollar is expected to drop to P38.00 and some circles are saying it may go as low as P30.00 within the year. The expats currently living in the Philippines are feeling the lower exchange rate from their monthly retirement pensions and tightening their belts. Expats that have been considering retiring to the Philippines may well be looking else where for a retirement location. To make a bad situation worse the Cebu Hotels are talking about a 10% increase for their rooms. Surely other services will follow the increase and soon the dollar may shrink to an even further all time low in the Philippines.

In 2004 a dollar bought P56.00, so when I exchanges $1,000.00 at a Philippine bank or Money Changer I got P56,000.00. Today $1,000.00 buys just P40,000.00 a P16,000.00 decrease of $286.00 or 29% less. Now add a conservative estimated Philippine inflation rate to the 29% decrease and you are looking at a total loss of about 40% in just three years. WOW! That’s a big hit and a really big hit for a retired guy with a pension of just $1,000.00 There goes the Filipino myth that all foreigners are rich. Instead of living like a king in the Philippines with a pension of $1,000.00 foreigners may find themselves to be a lowly prince and maybe even a pauper with a mere pension of $1,000.00.

Now the questions for those expats living in the Philippines and for those considering the move to the Philippines is simple, is it worth it? Should I find a cheaper country to retire and spend my pension? Before an expat answers the question we need to consider the big picture and that means what does it cost to live in the Philippines today?

Many things we buy in the Philippines are cheaper than in the US, Canada, Europe and Australia. However, many things also cost the same and sometimes more. Building a house in Cebu is still a huge bargain. Buying a condo is also a bargain. A new house in Cebu can be had for $40,000.00 and a nice Condo for about $60,000.00. My little one bedroom house in the VERY rural Camotes Islands cost just about $8,000.00 to build and furnish and that includes the land. At the current exchange rate and inflation the same house, land and furniture would cost about $11,320.00 Yes, That is a big jump, but still very cheap by western standards. My Monthly Budget changes all the time, but here is what I have been spending for just the basics:

$200.00 Food

$50.00 Electric

$20.00 Internet connection

$20.00 Satellite TV

$15.00 Cell Phone

$5.00 LPG gas for cooking

$60.00House maintenance

$20,00 Motorcycle maintenance and gas

$100.00 Monthly Cebu City trip Entertainment, Movies, restaurants


The following estimated budget is for two people living in Cebu City.

$200.00 House rent In Cebu City.

This would be a nice house. It doesn’t cost much for rent.

$150.00 Food

$50.00 Electric

$20.00 Internet connection

$20.00 Cable TV

$25.00 Phone

$5.00 LPG gas for cooking

$30.00 Maid Live-In $40.00 maximum

$50.00 Transportation, Taxi, Jeepney

$200.00 Entertainment, Movies, restaurants, golf and beaches


Please note the Cebu City budget does not include a car allowance. It is much cheaper and easier to use Jeepneys and Taxi Cabs.

Both of these budgets still get you in under $1,000.00 a month. By far my rural budget is the cheapest. However, The keyword is RURAL! Not everyone wants to live in the Rural Islands. I love it in Camotes Islands, but there ain’t much in Camotes for those that like the night life, shopping and restaurants. The Cebu City budget may well be a bit conservative. However, it is a good starting point. You may need to adjust for your lifestyle.

REMEMBER!! I did not include visa cost and medical insurance. On average a Tourist visa will cost about $1.00 per day and medical insurance can be outrageous depending on the carrier.

You also need to have enough money for emergencies: trips home, Accidents, theft, and medical emergencies. I recommend you have at least $5,000.00 at any given time to draw from and $10,000.00 is even better. If you don’t have an extra $5,000.00 for emergencies don’t go. The worst thing that can happen to an expat is to be in an emergency situation in a foreign country with no money and no way home.

At the end of the day it appears the Philippines is still a good retirement option. Not as good as it once was, but still a strong option for a place to retire on a modest pension. However, I suspect many expats will want to save their money and consider the rural areas of the Philippines to retire. The rural areas can be very enjoyable for those in good health. However, if you need regular medical care you may find the rural areas lacking in medical facilities. Also, if you want all the frills of a city then the rural areas will be a true disappointment. I think the Philippines may well see a decrease in western Foreigners retiring to the country. Another significant issue is the thousands of OFW’s Oversea Filipino workers. OFW’s are all over the world and they contribute a LARGE portion of the Philippine economy. The OFW’s send money home to their families every month. With the decreased dollar to peso rate I suspect the OFW’s will need to tighten their belts just as much as the expats.

To answer the two questions. Is it worth considering the Philippines as a retirement option or should one consider another country? My answer is both Yes and No. If you have a pension of $1,000.00 yes, but with caution. If your pension is less than $1,000.00 you need to REALLY think it through and maybe consider another country. Still, the Philippines is a pretty good option and a cheap place to live if you can stick to a realistic budget and have at least $5,000.00 for emergencies.

Patrick McGrain is the owner of [] Patrick has lived in in Camotes Islands, Cebu, Philippines for four years with his Filipina wife Judith.