Cost of Living in the Philippines

Where you choose to settle down can make a big difference. Generally, urban areas like Manila, Cebu, and Davao have a higher price tag than rural towns and provinces. 

Regarding earning power, urban wages and incomes are significantly higher than in rural areas. This offsets some of the higher urban living costs. However, income inequality is also greater within cities.

The urban-rural divide in living costs is evident in various studies. A research paper by the University of the Philippines highlights the income and wage gaps between urban and rural areas¹, attributing a significant portion of this disparity to differences in the cost of living.

Additionally, a study published in PubMed examined the household financial costs of illness, finding that rural households faced lower out-of-pocket expenses than their urban counterparts².

Living in the city center will cost you a lot if you want to rent. Take Manila, for example – renting a one-bedroom apartment in the middle of all the action can set you back around PHP25,000 per month. But if you’re willing to live a little further out, say in the outskirts or suburbs, you can find much better deals. A three-bedroom place outside the city center might only cost you around PHP20,000 per month.

For those thinking of putting down some roots and buying a place, be prepared to make a serious investment, especially if you want to be in a prime location.

In areas like Makati in Manila, house and lot prices can easily reach into the tens of millions of pesos for luxury homes. But don’t worry. There are still some more affordable options out there. Head a bit further away from the city center, you can find subdivisions with houses and lots for under PHP1 million.

Of course, if you’re open to living outside the major cities, buying a house becomes much more realistic for the average Filipino family. You can find homes and lots for under PHP2 million in many provinces.

It all comes down to your priorities and budget. If you’re set on living at the heart of the action, be prepared to pay a premium for that city-center lifestyle. But if you’re willing to compromise on location, you can find some fantastic deals on housing, whether you’re renting or buying. 

Some expenses come with having a roof over your head – utilities. In the Philippines, you’ve got to budget for electricity, water, internet, and your mobile phone. These costs can add up quickly, especially if you live in the city.

Picture this – you’re a couple living in a cozy 85 sqm apartment in the heart of the city. You’re looking at around PHP5,600 monthly to keep the lights on, the water running, and your phones and internet connected. That’s a considerable amount of money. 

Those living alone may be spending over PHP3,000 on electricity and water alone. After all, you must keep that aircon running in the hot Philippine weather, right? Then there’s your internet connection, which can cost you around PHP1,700 monthly. Don’t forget about your mobile phone plan – another PHP2,200 on average.

Those living in the province could catch a break from these utility costs. Electricity and water will still be your most significant expenses, but the prices are lower outside the major cities.

But here’s the thing – even if you’re paying less for utilities in rural areas, these costs still make up a big part of your monthly budget. It’s not uncommon for utility bills to consume a significant portion of a household’s income, especially for families with lower incomes.

The most popular mode of public transport in the Philippines, the jeepney, will only set you back about PHP12 per ride. If you’re in Manila, you can also take advantage of the bus system, with fares ranging from PHP20-100 depending on how far you’re going. Just be prepared for serious traffic, especially during rush hour.

People who want a car must be prepared to open their wallets. If you’re living in a major city like Manila, owning a car can be more of a headache than a convenience. Traffic congestion is a real problem. You can easily spend hours stuck in gridlock. Plus, parking can be a nightmare and a significant expense.

That said, owning a car or motorbike might be more practical if you’re living in a more rural area. Traffic is less of an issue, and you might have fewer public transportation options. Fuel prices are also lower outside of the major cities.

The key is to use a variety of online property portals and websites to find the widest selection of potential rentals in your budget and target location.

Starting your search 1-2 months before you move is advisable for the best options.

• Lamudi Philippines – Has over 700,000 property listings for rent and sale across the country. Easy to search by location, price, property type, etc.
• Dot Property Philippines – Offers a wide selection of rentals and properties for sale. Includes articles and guides.
• Zipmatch – Focuses on condos and houses in the metro areas. Has area guides and a map-based search.
• Property24 Philippines – Straightforward property portal with listings across the country. App available.
• Rentpad – Focused specifically on apartments and houses for rent, though it only covers 12 major cities.
• Social Media and Expat Communities – Join local Facebook groups for rentals and apartments in your target area. Many landlords and agents post listings directly in these groups. Search “Apartments for rent in [city/neighborhood].” Ask for referrals from other expats and friends already living in the Philippines. They can provide leads and advice on the best areas to live. Expat groups and forums are an excellent place to start.
• Local Real Estate Agents and Brokers – Visit or contact local real estate agents and brokers once you arrive. They’ll have expert knowledge of the local market and can help you find suitable properties and negotiate with landlords. Most charge a commission equal to 1 month’s rent.
• Online Classifieds and Short-Term Rentals – Check online classifieds like Manila Craigslist, which have rental listings directly from owners. Be cautious, as there are some scams on these sites.
• Public Housing Options – You can check the listings on the National Housing Authority website for low-income public housing, though these are very limited.

The table shows that public schools offer free education at the primary and secondary levels under the K-12 program. State universities and colleges also provide free tuition for tertiary education under RA 10931. In contrast, private schools charge varying tuition fees across all levels, with costs increasing as the level of education advances.

International schools in the Philippines cater to expatriate families and local students seeking a globally recognized education. These schools offer curricula from countries like the United States and the United Kingdom and International Baccalaureate (IB) programs.

As of 2023, there are 37 international schools in Manila alone. Tuition fees for these schools are significantly higher compared to local private schools. For example:

• International School Manila: Annual tuition fees range from $8,860 for preschool to $17,940 for high school (Grades 11-12)
• British School Manila: Annual tuition fees for Grades 10-11 are £5,415, while Grades 12-13 cost £5,895 
• Brent International School Manila: Annual tuition fees for Grade 12 are $19,840 

Enrolling in an international school can cost anywhere from PHP500,000 to over PHP1,500,000 per year, depending on the grade level and institution. This makes international schools the most expensive education option in the Philippines.

The actual costs will depend on your usage and the size of your home. Electricity tends to be the most expensive utility, mainly if you frequently use air conditioning.

Prepaid plans are generally more popular in the Philippines, with around 96% of mobile subscribers opting for prepaid services. This is due to the flexibility and lower costs associated with prepaid plans, which suit the needs of many Filipinos.

However, postpaid plans are becoming increasingly popular, especially among heavy data users and those who want the latest smartphone devices. Postpaid plans often come with larger data allowances and perks like free texts, calls, or streaming services, making them a better value for some users.

Whether you’re an expat adjusting to life in the Philippines or a local looking to manage your finances better, creating a detailed budget is essential. List all your income sources and expenses, including rent, groceries, utilities, transportation, and discretionary spending.

Using a budgeting app or spreadsheet can help you easily track your spending and identify areas where you can cut back. Make sure to revisit your budget regularly and adjust as needed, especially when your income or expenses change.

Housing is often the most significant expense for both expats and locals in the Philippines. To lower your housing costs, consider living with roommates or in a smaller space. 

If you’re renting, try negotiating with your landlord for a lower rate, especially if you’ve been a reliable tenant. 

For homeowners, look into refinancing your mortgage to secure a lower interest rate and reduce your monthly payments. Remember, even small savings on housing can add up over time.

Food is another major expense for most people in the Philippines. To save money on groceries, plan your meals and create a grocery list to avoid impulse purchases and reduce food waste. Buying generic or store-brand products instead of more expensive name-brand items can also help you save. 

When it comes to dining out, look for deals, split entrees with friends or family, or opt for cheaper menu items. Cooking meals at home is often the most cost-effective option, so pack lunches for work or school whenever possible.

Getting around in the Philippines can be expensive, whether you’re an expat navigating a new city or a local commuting to work. To reduce transportation costs, use public transportation, carpool, bike, or walk whenever possible. 

If you need a car, consider buying a used vehicle (with low mileage) instead of a new one to save on monthly payments. Shopping around for the best deals on car insurance and considering raising your deductible can also help lower your premiums.

Utility bills can quickly add up, especially in the Philippines, where air conditioning is often a necessity. To lower your utility costs, use energy-efficient appliances and light bulbs, and unplug devices when not in use. Adjusting your thermostat, using inverter appliances, using fans, or opening windows for ventilation can also help reduce your heating and cooling expenses. 

Additionally, conserving water by fixing leaks, taking shorter showers, and using water-efficient fixtures can lead to significant savings over time. Feel free to negotiate with your cable, internet, and phone providers for better rates or switch to cheaper alternatives.

Managing debt is crucial for both expats and locals in the Philippines. If you have high-interest debt, such as credit card balances, focus on paying them off as quickly as possible to reduce interest charges. Consider consolidating your debt with a balance transfer credit card or personal loan to secure a lower interest rate. 

To avoid falling into a debt trap, only use credit cards for purchases you can afford to pay off in full each month and avoid taking on new debt whenever possible.

Sometimes, more than cutting expenses is needed to make ends meet. If you find yourself struggling to cover your living costs, consider boosting your income.

This might mean asking for a raise at work, looking for a higher-paying job, or taking on a side hustle or freelance work in your spare time. Selling unwanted items online or at a garage sale can also help generate additional income while decluttering your space.