Cost of living in the Philippines rose last year because of currency appreciation, but it remains one of the most affordable in the world. London-based Economist Intelligence Unit (EIU) ranked Manila among the 20 cities with the lowest cost of living.
The EIU, which surveyed 140 cities included in its Worldwide Cost of Living 2011 report, ranked Manila at 124th spot with a cost of living index of 62 points, along with Dhaka, Bangladesh this year. Manila’s ranking was higher than its 128th spot with 56 points last year. New York was used as the base city with index set at 100 points. EIU analysed the point-of-sale prices of 160 products and services for the biennial report, which is published in June and December.
Tokyo was listed as the most expensive city to live in (161 points), followed by Oslo, Norway; Osaka and Kobe, Japan; Paris, France; Zurich, Switzerland; Sydney and Melbourne in Australia; Frankfurt, Germany; Geneva, Switzerland; and Singapore.
Karachi in Pakistan was ranked as the cheapest city, “with a cost of living level at less than one-half of that of New York and one-third of that of Tokyo.” Other cheap cities are Panama City, Panama; Algiers, Algeria; Jeddah, Saudi Arabia; New Delhi, India; Tehran, Iran; Mumbai, India; and Tunis, Tunisia.
EIU cited exchange rate movement and price movement as two major reasons why a city’s cost-of-living index changed over time.
“Since a common currency is required in making a comparative calculation, all local prices are converted into US dollars, which emphasizes the role of currency movement. If, for example, a currency strengthens or inflation pushes up the price of goods, the relative cost of living in that country will also rise,” the research group explained.
A similar survey by Mercer ranked Luanda in Anglola as the world’s most expensive city for expatriates. In its 2011 Cost of Living Survey, Mercer said Tokyo maintained its second position with N’Djamena in Chad in third place. Moscow ranked fourth, followed by Geneva, Osaka, Zurich, Singapore, Hong Kong and Sao Paolo.
Karachi, Pakistan, at No. 214, is the world’s least expensive city. Explaining the rankings, Mercer said: “Recent world events, including natural disasters and political upheavals, have impacted on the rankings for many regions through currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices,” Mercer said.
Manila was ranked 134th in the list, up from its previous year’s ranking of 157th. Mercer said the rise in Manila’s ranking is due to its currency appreciation against the US dollar, along with price increases for rental accommodation, food and home services.