The Philippines has a comprehensive banking system encompassing large international, national and small rural banking institutions. So, expats are spoilt for choice when managing their finances.
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 from which to choose in the Philippines. Major local banks include the 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 country. Many expats in the Philippines bank with an international bank, making it easier to complete international money transfers.
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 weekends and public holidays.
Expats should be wary of banking with small rural banks, as their money will likely not be secure with these institutions. These banks cater for the communities of farmers and local merchants, offer limited services and are subject to closure at short notice.
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 and deposit funds into the account.
Expats also need to present various documents, including ID and bank references, from their country of permanent residence or citizenship. The Philippine bank will then verify this reference. Typically, expats referred by a bank employee or client can open their account immediately, and those who walk-in will only have their account activation complete once the confirmation of bank reference is done.
ATMs and credit cards
ATMs are widely available in cities and larger towns in the Philippines. Most are behind security doors in shopping centres and bank branches.
Major hotels, resorts, shops and restaurants across the Philippines accept credit cards, but cash remains the preferred payment method in remote areas. Credit card fraud in the Philippines is an ongoing security problem. Expats should only use their credit and debit cards 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, and those on a specific contract are non-resident aliens.
Resident citizens pay income tax on all globally derived earnings, while the other categories pay taxes 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.