Panoramic view of El Nido Bay from Tataw Cliff
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Americans dreaming about retiring to the Philippines might see palm-fringed beaches and exotic lifestyle changes in their future.
But a move to this country is about more than that. Retiring in the Philippines offers Americans a blend of English-speaking convenience, quality private health care at affordable prices, a fairly easy visa process, andS locals that will welcome you into the community and make you feel at home.
It’s also not all rose-colored. Dealing with local bureaucracy, frustrating infrastructure, and a slower-Cpaced life is not for everyone.
If you are thinking about making the Philippines your future home, these are a few things to consider.
Do Americans And Other Nationalities Reside In The Philippines?
The Philippines has been a popular retirement destination for Americans for a long time. The Philippine Retirement Authority states that Americans are included in the top nationalities that choose to reside here. Other prominent demographics that commonly reside in the Philippines are Chinese, South Koreans, Taiwanese, and Japanese nationals.
According to the 2020 Census of Population and Housing in the Philippines, the country has 78,396 foreign citizens. Of those, 39.8% reside in the National Capital Region of the country. The top number of foreign citizens come from China, with 22,494 people, while 6,306 Americans are foreign citizens.
That same census states that out of the 108.67 million household population in the Philippines, 230,917 people have foreign ethnicities. Americans account for 6% of that population, or 13,946 people.
The Allure Of The Philippines For Retirement
The Philippines is attractive to foreigners as a tourist and retirement destination due to its incredible natural beauty spread over 7,500 islands, otherworldly landscapes of tropical beaches and crystal-clear waters, vibrant culture, low cost of living, rich history, and diverse experiences for everyone. This country is full of friendly and welcoming people and a strong community, and it has countless activities that many can enjoy.
A real incentive to move to the Philippines is that Filipinos are incredibly accommodating with language. They will have no problem explaining slang or choose to speak in simpler phrasing—they will adjust to your level of knowledge. Because English is the official language, it is widely spoken, and communication is not commonly a barrier.
Filipino hospitality is also no joke. When you become a familiar face, you will be considered part of the group. If you make an effort to make connections, be prepared to be invited to everyone’s birthdays, parties, funerals, and more. Meals here are also communal, so don’t be surprised if locals try to feed you even when they just met you. By moving here, you will be able to build a community and a support system if that’s what you’re looking for.
This country also has quality private health care for a fraction of what you would pay in the United States. Many of the doctors in the private health care sector are trained in the U.S. or Australia, while nurses are among the best trained in the world. A checkup with a specialist might only cost about $25.
The Philippines definitely has a slower pace of life. This means that bureaucracy can make you crazy, so to live here you’ll need to chill lang (just relax). For many coming from a hustle and bustle culture, this could be a welcome change of pace. In the Philippines, no one will rush you, and there’s always time to spare.
Considerations Before Retiring To The Philippines
Retiring in the Philippines has many positives…
- A huge number of U.S. veterans retire in the Philippines, as they are entitled to the same VA benefits as those living stateside.
- English is the official language of the country, and over 90% of the population speaks it fluently, so transition to life in the Philippines is much easier than in other Southeast Asian nations.
- Plenty of expats from many nationalities retire in the country. This means that it is not hard to find a community of like-minded individuals to socialize, bond, and participate in activities with.
- The Philippines has a low cost of living. A couple can live comfortably in a city such as Dumaguete for about $1,500 to $1,800 per month.
- This is a culturally exciting environment with access to natural beauty and a low-key lifestyle.
But it also has some downsides…
- Safety can be an issue across the Philippines. Cities I recommend, such as Dumaguete, are considered safe. You still want to always take precautions, such as living in a building with a security guard.
- As in most of Southeast Asia, the Philippines restricts foreigners regarding property ownership. Foreigners can’t own land in the country, only condominiums. Plus, foreigners can’t make up more than 40% of the total ownership of units.
- The Philippines is far away. There’s only a handful of direct flights from North America from cities like Los Angeles, New York, San Francisco, Toronto, and Vancouver.
- Outside of major cities, daily high-level or specialized health care is limited.
How Retiring In The Philippines Affects Your Taxes And Social Security Benefits
The Philippines has tax treaties with the United States and Canada, which reduces the risk of double taxation. Because of the Foreign Earned Income Exclusion and Foreign Tax Credit, American expats usually pay little or no U.S. taxes, especially if you’re not planning on earning much abroad. However, you still do need to file your U.S. taxes and report your worldwide income.
If you have a foreign bank account with over $10,000, you must file FBAR annually.
Income taxes here are moderate, ranging from 0% to 35%. Capital gains tax on the sale of property is fixed at 6% of the sales price. There is no inheritance tax in the Philippines.
You can still receive your Social Security benefits while living in the Philippines, as the United States and the Philippines have an agreement, and they can be deposited directly to a Filipino bank account or a U.S. account that you can access from abroad. You’ll need to stay in touch with the local U.S. embassy or SSA office in Manila to report you’re alive and eligible to receive your SS benefits.
I recommend you always work with a tax professional that is familiar with working with retirees relocating abroad. Also, stay up to date with IRS and SSA rules, as they can change at any time.
Do You Need A Visa To Retire In The Philippines?
The Philippines offers a retiree-specific resident permit, the Special Resident Retiree’s Visa (SRRV), which makes it easy to set up life here. This is a non-immigrant visa that allows multiple entries and indefinite stays in the Philippines.
The SRRV offers special benefits like:
- Multiple entry privileges
- A lifetime visa exempt from Bureau of Immigration requirements
- Allows holders to work, study, or invest in the country
- Discounts from the Philippine Retirement Authority partners
- Free assistance with government agency transactions
- Access to Philippines Health Insurance benefits and privileges
The Classic SRRV is for active and healthy principal retirees who would use their visa deposit to purchase condominium units or acquire a long-term lease of a house and lot. The deposits are $20,000 for applicants that are 50 years old and above without a pension and $10,000 for applicants that are 50 years old and above with a pension. If you receive a pension, it should be at least $800 per month for single applicants and $1,000 per month for those with dependents.
Do Locals Approve Of Foreigners Retiring In The Philippines?
Overall, the Philippines welcomes foreigners. Especially in the rural and island areas, foreigners are treated with respect. Locals are always interested in learning about you and where you come from. It’s not uncommon for a foreigner to be offered to be a speaker at a school or event or even get asked to be a local kid’s godparent.
The country has specific programs to incentivize expats to move to their country, such as the SRRV visa mentioned above, which makes retiring to the Philippines an easy process compared to other countries.
The government has also introduced a new digital nomad visa for non-immigrant foreigners who want to stay in the country for a temporary maximum period of one year. Holders may renew the visa for an additional year. Some of the requirements for this new DN visa include being at least 18 years old, showing proof of remote work with digital technology, proof of sufficient income generated outside of the Philippines, and having no criminal record.
These are some general considerations to keep in mind when moving to the Philippines…
You should always respect the local culture and customs. Make sure to learn about Filipino values, avoid superiority, and be a pleasant neighbor in this country that is welcoming you. It also helps to support the local economy by hiring local workers, buying from local businesses, and engaging with the local community and not just other expats.
Follow the local laws, stay in the country with the correct visa, and pay the taxes that apply to you.
Also, volunteering and contributing to local programs and sharing your skills and experience in ways that would benefit your new community are great ways to give back and positively affect those around you.
Is The Philippines For You?
While the Philippines might not be for everyone, it is still an exciting option for many.
Retirees who are budget conscious because of a modest pension or fixed income will find the Philippines hugely attractive. You could live comfortably in many cities with a budget of about $1,500 to $1,800 per month for a couple.
If you don’t wish to learn how to speak another language, the Philippines is also a great option, as English is widely spoken and it will be easy to navigate daily life and form new relationships.
The Filipino culture is social and family-oriented. If you’re looking to be well-received among a community that is warm, welcoming, and respectful, the Philippines meets the bill.
Remember that even though English is spoken by most, the culture is still different from what you might be used to. Everyday life is different—from the infrastructure to bureaucracy to daily goings. If you are someone who can embrace differences, can adapt to new environments, and is open-minded, you will be able to thrive in the Philippines.
Finally, those who are looking for beach living, a rural and slower pace of life, and peaceful, natural beauty will be amazed by the Philippines.
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