Banking, Money and Taxes in the Philippines

Managing your money in the Philippines is straightforward, but staying informed about currency regulations, exchange rates, and banking practices is key. Whether you’re moving for work or business, understanding how the Philippine Peso operates will help you through daily transactions and financial planning.

Money in the Philippines

The official currency in the Philippines is the Philippine Peso (PHP), with one peso equal to 100 centavos (sentimos). While cash is widely used, digital payments and online banking are becoming increasingly common.

• Notes: PHP 20, PHP 50, PHP 100, PHP 200, PHP 500, and PHP 1,000.
• Coins: PHP 1, PHP 5, PHP 10, and PHP 20, along with 1, 5, 10, and 25 centavos.

If you’re bringing money into or out of the country, keep in mind that regulations apply. You can carry up to PHP 50,000 without prior approval from the BSP. If you’re carrying more, you’ll need written authorisation, which is typically granted for specific purposes like research, numismatics, or machine testing.

For foreign currency, you can bring in or take out up to the equivalent of USD 10,000 without declaration. Anything beyond this must be declared using the Foreign Currency Declaration Form, which is available at Bureau of Customs desks in international ports and on the BSP website.

Various banks, authorised foreign exchange dealers, and hotels provide currency exchange services, but rates can vary. For the best deals, avoid airport exchange counters, which often have higher markups.

Useful links

• Bangko Sentral ng Pilipinas

Banking in the Philippines

Banking in the Philippines offers a mix of traditional and digital solutions, giving you plenty of options to manage your finances efficiently. Whether you’re looking for a global banking experience or a local institution with strong domestic networks, the country has a wide range of financial institutions to choose from.

Banking hours in the Philippines typically run from 9 am to 3 pm, Monday to Friday, with most branches closed on weekends and public holidays. ATMs are widely available, but cash remains essential for transactions in rural areas.

Major local banks include the Bank of the Philippine Islands (BPI), BDO Unibank, and Metrobank, each offering a full suite of financial services. International banks such as Citibank, HSBC, and Standard Chartered also operate in the country, making international money transfers and multi-currency banking easier.

Digital banking is on the rise, with platforms like Maya, GCash, Tonik, and GoTyme Bank transforming how people save, transfer money, and pay bills. These fintech solutions offer seamless mobile transactions, often with lower fees and higher interest rates than traditional banks.

Be cautious when banking with small rural institutions. These banks cater to local farming and merchant communities, offer limited services, and can shut down with little notice. If security and stability matter to you, stick with well-established banks.

Opening a bank account

Opening a bank account in the Philippines requires an in-person visit to your chosen bank. You’ll need identification, proof of residence, and bank references from your home country. Some banks process applications faster if you’re referred by an existing client or employee.

Digital banks often offer a fully online application process, making it easier to set up an account without visiting a branch. These banks typically require fewer documents and provide competitive interest rates on savings.

ATMs and credit cards

ATMs are easy to find in cities and larger towns, often located inside shopping malls and bank branches for added security. If you’re withdrawing large amounts, use ATMs inside bank premises to reduce the risk of card skimming or fraud.

Credit and debit cards are widely accepted in hotels, restaurants, and retail shops. But in remote areas, cash is still king. To avoid fraud, never let your card out of sight during transactions and enable two-factor authentication for online banking.

Safety in the Philippines

Taxes in the Philippines

Understanding your tax obligations in the Philippines is crucial to avoiding penalties and ensuring compliance. Your tax liability depends on your classification, which is determined by your residency status and source of income:

• Resident citizen: Taxed on worldwide income.
• Non-resident citizen: Taxed only on Philippine-sourced income.
• Resident alien: Taxed only on income earned within the Philippines.
• Non-resident alien engaged in trade or business: Taxed progressively on Philippine-sourced income.
• Non-resident alien not engaged in trade or business: Subject to a flat tax rate on income from Philippine sources.

As a rule of thumb, if you work in the Philippines for an unspecified period, you are likely classified as a resident alien. If you are on a specific contract, you are typically considered a non-resident alien.

Recent tax reforms have made adjustments to personal income tax rates, with higher earners taxed at progressive rates of up to 35 percent at the top bracket. Meanwhile, the introduction of a 12 percent VAT on digital services affects those using international platforms for business or entertainment.

The tax year runs from 1 January to 31 December, and income tax returns must be filed by 15 April of the following year. Late filings result in penalties and interest charges, so it’s best to stay ahead of deadlines.

Common tax pitfalls

Many foreign residents in the Philippines make costly mistakes when filing taxes. Misunderstanding your residency status can lead to incorrect tax filings. If you are a resident citizen, you must declare your worldwide income, whereas non-residents and aliens are only taxed on local earnings.

If you hold foreign bank accounts, be mindful of international tax reporting obligations, such as the Foreign Account Tax Compliance Act (FATCA) for US citizens. Non-compliance can lead to hefty fines, so consulting a tax professional is highly recommended.

Missing tax deadlines is another common pitfall. Mark key dates in your calendar and consider using the Bureau of Internal Revenue (BIR) online filing system to avoid late penalties.

If you’re earning in multiple jurisdictions, understanding tax treaties between the Philippines and your home country is vital to avoid double taxation. Seek guidance from an accountant who specialises in expat taxation to save yourself significant time and money.

Useful links

• Bureau of Internal Revenue (BIR)
• Department of Finance
• IRS – Foreign Account Tax Compliance Act (FATCA)