The country’s capital is ranked 29 places higher in Mercer’s 2019 Cost of Living Survey, landing the 109th spot among the most expensive cities for expatriates out of 210 localities on this year’s edition.
The Cost of Living Survey is meant to capture the comparative cost of more than 200 items in each location such as housing, transportation, food, clothing, household goods, and entertainment. The comparisons were determined from a survey conducted in March.
“Cost of living is an important component of a city’s attractiveness for businesses,” a press release quoted Yvonne Traber, Global Mobility Product Solutions leader at Mercer, as saying.
The survey is designed to assist firms in creating compensation packages of their expatriate employees in order for them to maintain a livable purchasing power when deployed to another country.
Mercer’s Mobility Leader for Asia, Middle East, Africa, and Turkey Mario Ferraro said “[w]hile the Philippines’ robust economic growth continues to attract talent, business, and investments from all over the world, the findings of Mercer’s 2019 Cost of Living study should signal its public and private sectors to take a deeper look and start a conversation on which factors are behind the dramatic increase in its cost of living from 2018 to 2019, and how they can be addressed or mitigated to ensure the country’s continued competitiveness.”
“Eight of the top ten cities in this year’s ranking are in Asia due in part to a strong housing market,” Mercer noted in its statement.
Hong Kong remains the most expensive city in the world followed by Tokyo, Singapore, Seoul, Zurich, Shanghai, Ashgabat, Turkmenistan, Beijing, New York, and Shenzhen.
Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC), said that Manila’s drastic climb on this year’s list may have been due to the fast inflation and higher interest rates in 2018, which spilled over in early 2019, as well as the relatively fast growth of the economy in terms of gross domestic product compared to other Asian countries. “Faster increase in cost of living may also reflect the sustained growth in rental rates and property prices in recent years,” Mr. Ricafort said in a mobile phone message when sought for comment.
Unionbank of the Philippines, Inc.’s Chief Economist Ruben Carlo O. Asuncion noted the “GDP growth” is one of the possible factors for the climb as this triggers a surge in prices.
“The rise of labor costs is another. Another would probably be the rise of real estate costs. Inflation also has a factor in the rise,” Mr. Asuncion said.
“It is known that as economy expands, along with it is the parallel rise of various costs. Some of these costs are labor-related like wages and the cost of living. Thus, it is somehow expected that the Philippines has risen in the survey.”
The Philippine economy expanded by a 6.2% in 2018 — the slowest clip in four years — against the government’s 6.5-6.9% target. Still, it was regarded as Asia’s fastest-growing economies. GDP grew by 5.6% in this year’s first three months — its worst quarterly performance in four years — against an official 6-7% goal for 2019.
The Philippines last year also suffered from successive multi-year-high inflation rates that peaked at a nine-year-high 6.7% in September and October. Headline inflation averaged a decade-high 5.2% in 2018 against an official 2-4% target.
Source: Businessworld
Read our previous journal for more real estate news.
