Moving to Manila – Top Financial Tips for Expats Living in the Philippines

Moving to Manila? Moving to the Philippines?

Relocating and living abroad can be ademanding experience. This guide aims to help expatriates smoothly navigate their journey in the Philippines and moving to Manila.

1. Owning Real Estate
Philippine law strictly prohibits foreigners from acquiring land in the Philippines. Despite growing pressure from Expatriate communities to amend this ruling, the easiest way for foreigners to own real estate properties remains through spouses with Filipino nationality.

This ruling is often confused with foreigners purchasing Condominiums, which is a popular and indeed permissible alternative. However, careful consideration should be given before entering such agreements, as although the foreigner might own the Condo, they do not own the land. Such arrangements may leave foreigners ‘at the mercy’ of the ultimate landowner if conflicts of interest arise in the future.

2. Cost of living in the Philippines
The Philippines offers expatriates and retirees an opportunity to amplify the spending power of their income and enhance their quality of life. Even after purchase extortionate ‘home comforts’ such as branded food and toiletry items when your suitcase supply eventually runs out!

Nevertheless, expatriates enjoy one another’s company, and this comes at a cost. For instance, for £575 €700pm a retiree couple could live comfortably in the more remote regions of the country. If however, you prefer the expat colonies surrounding Angeles, Baguio or Cebu and ‘paradise’ with a touch of Western civilisation you will see your cost of living rise closer towards £1,250 €1,500 pm.

3. Schooling in the Philippines
A strong educational background is a prerequisite for accessing the best Undergraduate and Postgraduate degrees. As such, educational decisions will impact upon your child’s competitiveness within University applications and thus their subsequent career.

International Schools are plentiful, including the Australian International School (Taguig), European International School (Parañaque) and the British School of Manila. The curriculums are aligned to their country of origin, allowing students to easily re-integrate into higher education.

The 2013/14 annual tuition fees of the private British School of Manilla (one of the most prestigious) range from £4,333 for nursery students up to £11,302 for year 12-13 students. However, additional costs can substantially increase the provisions required for education funding:

Entrance fees: £2,704
Application fees: £203
Nursery Deposits: £725
Capital Development Fund: £1258

Thoroughly planning these costs should form an integral part of any expatriate’s financial strategy for the Philippines. To learn more on education planning see Harrison Brook’s dedicated page on International Educational Savings Plan.

4. Setup an Offshore Bank Account
The term ‘Offshore’ often attracts negative connotations and is commonly portrayed as a dark and deceitful world where the super-wealthy hide their yachts and fortunes. This depiction is however inaccurate, and is akin to describing all sports fans as hooligans.

An offshore bank account is simply an account located outside the depositor’s country of origin. No Ferrari needed. In fact, they are arguably the most cost effective and convenient way for expatriates to manage their global payments and financial obligations.

For instance, if you set up a local Filipino bank account, how are you going to receive your employment or retirement income, set up direct debits and facilitate international transfers without incurring costly fees and volatile Peso exchange rates? Worst of all, you may have to negotiate with frustrating branch opening hours and limited expertise for the privilege.

Offshore bank accounts afford numerous benefits for those moving to Manila:
Easy global access

Geographical freedom with online and telephone banking
Peace of mind discussing finances in your home language with a representative familiar with your arrangements

Counteract the dangers of holding assets in beautiful yet politically unstable regions

By swiftly eradicating the bureaucracies of living abroad, offshore bank accounts allow you the time to reflect enjoyably on why you moved to the Philippines in the first place.

5. Financial Advice in the Philippines
The laws regarding financial advice in the Philippines differ significantly from those offered to individuals in the UK and Europe, where EU regulation ensures clients are afforded the highest possible levels of protection and recourse.
Unfortunately the same cannot be said of the Philippines. Many areas of financial advice are wholly unregulated. Consequently, not only may the standard of advice be extremely poor, but it also likely to be unprotected, giving you no recourse in the event of problems.

6. Review your Existing Pensions & Investments
Accurately planning your family’s life abroad without understanding your current financial situation is at best risky and at worst impossible. An evaluation will help assess how robust your existing arrangements are for attaining your long-term personal and financial objectives.

Additionally, the rules and regulations regarding your pensions and investments whilst living overseas can be complex. Where are you liable for tax purposes? Can the pension provider make payments overseas? How are your lump sum and lifetime allowances affected?

Moving to Manila or living abroad is an exciting and life changing event, but it holds many financial implications. Taking expert advice is an essential step in navigating the journey and ensuring you every possible success.




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