The Philippines has a comprehensive banking system encompassing large international banks, national banking institutions and small rural banks. So, expats have a variety of options when it comes to managing their finances in the Philippines.
Money in the Philippines
The official currency in the Philippines is the Philippine Peso (PHP). One peso is equal to 100 centavos or sentimos
Notes: PHP 20, 50, 100, 200, 500 and 1,000
Coins: PHP 1, 5, 10 and 20; and 1, 5, 10 and 25 centavos
Various banks, hotels and authorised foreign exchange dealers provide peso exchange for most foreign currencies.
Banking in the Philippines
There are many banks in the Philippines for expats to choose from. Major local banks include Philippine National Bank, Metrobank and Bank of the Philippine Islands. International banks such as Citibank, Bank of America, Standard Chartered Bank and HSBC also have branches in the Philippines. Many expats living in the Philippines choose to bank with an international bank, which makes it easier for foreign money transfers back home.
Internet banking facilities are available through most major banks. Banking hours in the Philippines are usually from 9am to 3pm, Monday to Friday. Banks are closed on Saturdays, Sundays and public holidays.
It's generally recommended for expats to be wary of banking with small rural banks. These banks cater for the rural communities of farmers and local merchants, offer limited services and are subject to closure at short notice. The security of an expat's money is not guaranteed if banking with one of these organisations.
Opening a bank account
To open a local bank account in the Philippines, expats must personally visit the bank of their choice to verify their details. When opening a bank account, expats must typically deposit funds into it immediately.
Expats also need to present various forms of documentation, including ID and bank references from their country of permanent residence or country of citizenship. The Philippine bank will then verify this reference. Usually, expats who were referred either by a bank employee or client can open their account straight away, while for walk-in expats, the account may not be opened until confirmation of bank reference has been done.
ATMs and credit cards
ATMs are widely available in cities and larger towns in the Philippines. ATMs are mostly located behind security doors in shopping centres and at bank branches.
Credit cards are accepted at major hotels, resorts, shops and restaurants across the Philippines, although cash is preferred in more remote destinations. Credit card fraud in the Philippines is an ongoing security problem and expats should use credit and debit cards with caution, and only use them in reputable establishments and never let the card out of sight during transactions.
Taxes in the Philippines
An individual’s tax liability in the Philippines is determined by their classification as a taxpayer. Categories include:
- Resident citizen
- Non-resident citizen
- Resident alien
- Non-resident alien engaged in trade or business
- Non-resident alien not engaged in trade or business
Expats moving to the Philippines must find out which category they fall into. Generally, expats working for a non-specified period are resident aliens, while expats on a definite contract are non-resident aliens.
Resident citizens are taxed on all income derived from worldwide sources, whereas the other categories are taxed only on their local income. For resident aliens and non-resident aliens, income is taxed progressively up to 35 percent.
The tax year in the Philippines runs from 1 January to 31 December, and tax returns are usually due by 15 April of the following year.
We highly recommend that expats enlist the services of a professional tax consultant in the Philippines for specialised guidance.