The Story Behind the So-Called “Skin Tax”
One phrase you’ll probably hear sooner or later after moving to the Philippines is…
“The foreigner price.”
Some expats jokingly call it the skin tax.
Maybe a tricycle ride costs a little more.
A souvenir suddenly becomes more expensive.
A vendor at the market quotes you a higher price than the local standing beside you.
Some foreigners get upset.
Honestly…
I don’t.
Not because I enjoy paying more.
But because I understand why it happens.
It’s Usually Not Personal
I’ve never believed most Filipinos are trying to take advantage of foreigners.
They’re simply making an assumption.
They see an American…
or Canadian…
or Australian…
or European…
and naturally assume,
“That person probably has more money than I do.”
Considering the enormous difference in average incomes, that’s not an unreasonable conclusion.
If someone earns in U.S. dollars and I earn in Philippine pesos, it probably looks like they’re wealthy.
From that perspective, I understand the thinking.
The America Many Filipinos Never See
What many Filipinos don’t see is what it actually costs to live in America.
They see the movies.
The big houses.
The nice cars.
The shopping malls.
The vacations.
What they don’t see are the monthly bills that come with them.
In America we pay taxes on nearly everything.
Income taxes.
Property taxes.
Sales taxes.
Gas taxes.
Vehicle registration fees.
Insurance.
Health insurance.
Car insurance.
Home insurance.
Mortgage payments.
Car payments.
Utility bills.
Medical expenses.
Food.
Maintenance.
The list goes on and on.
Someone earning what looks like a very good salary may have very little left after paying all of those expenses.
Many young Americans with college degrees struggle to buy their first home.
Others postpone getting married or having children because everything costs so much.
America may be a wealthy country.
That doesn’t mean every American is wealthy.
They See the Result… Not the Journey
When people meet me here in the Philippines, they don’t see the decades that came before retirement.
They don’t see years of working.
Paying taxes.
Military service.
Saving for retirement.
Building a pension.
Receiving Social Security.
Living on a military disability.
They simply see an American retiree.
To many Filipinos, that automatically suggests financial success.
I understand why they think that.
Why So Many Americans Retire Here
Here’s the irony.
Many of us didn’t move to the Philippines because we were rich.
We moved here because retirement became affordable.
Back home, retirement income often disappears into:
- mortgage payments
- property taxes
- insurance premiums
- expensive healthcare
- utility bills
- car ownership
- rising food prices
- grown children with their hands still out
Here, many of those expenses become much smaller.
Some retirees no longer own a car.
Many rent instead of carrying a mortgage.
There are no snow shovels.
No expensive heating bills.
No lawn care.
No endless home repairs.
Our retirement income hasn’t magically increased.
Our expenses have dramatically decreased.
That’s a huge difference.
Where the “Skin Tax” Usually Happens
The interesting thing is that most foreigners almost never experience it.
Walk into a supermarket.
Everyone pays the same barcode price.
Eat at Jollibee.
Same menu.
Shop at SM.
Same price.
Use Grab.
The fare is calculated before you even book the ride.
The so-called skin tax usually appears only where prices aren’t posted.
Traditional markets.
Unmetered tricycles.
Beach vendors.
Souvenir stalls.
Independent service providers.
Anywhere prices are negotiated instead of fixed.
How I Handle It
Over the years, I’ve learned a few simple habits.
If I don’t know the normal price…
I ask.
If I’m taking a tricycle…
I agree on the fare before getting in.
If I’m shopping in a public market…
I gradually learn what things usually cost.
Sometimes I probably still pay a little more.
And honestly…
I’m okay with that.
If the difference is twenty or thirty pesos…
I’m not going to let it ruin an otherwise beautiful day.
Life’s too short.
Respect Goes a Long Way
One thing I’ve discovered after living here is that relationships matter.
Smile.
Be patient.
Treat people with respect.
Learn a few words of Tagalog.
Become a regular customer.
After a while, many vendors stop seeing you as “the foreigner.”
You’re simply Richard.
Or Bob.
Or Mike.
You’re no longer a tourist.
You’re part of the neighborhood.
And that changes everything.
Looking Beyond the Price
Living in the Philippines has taught me that perspective matters.
Many Filipinos believe every American lives a comfortable, wealthy life because America is a rich country.
Many Americans assume life in the Philippines is unbelievably cheap because prices are lower.
The truth lies somewhere in the middle.
Most retirees aren’t here because they’re rich.
They’re here because they spent a lifetime working, saving, paying taxes, and planning for retirement.
Then they discovered they could simplify their lives.
They traded mortgages for rent.
Car payments for tricycles.
Snow shovels for sandals.
Stress for sunsets.
If paying a few extra pesos once in a while is part of that experience…
I can live with that.
Because in the grand scheme of things, I’ve received far more from the Philippines than I’ve ever overpaid for at a market stall.
And that’s a trade I’ll happily make every single day.
💬 Your Turn
Have you ever encountered the so-called “foreigner price” in the Philippines?
How did you handle it? Did you find that learning the local customs and becoming a regular customer changed your experience over time?
Share your thoughts in the comments below. Your experience may help someone planning their own retirement in the Philippines.
🌴 Continue Exploring My Philippines Retirement
Retiring in the Philippines isn’t just about saving money—it’s about understanding a different culture. Explore more stories that explain the everyday surprises many foreign retirees experience.
- 💵 Cash Is Still King
Why carrying cash and small bills still makes everyday life much easier. - 🚖 Getting Around in the Philippines
Why I happily traded car payments and insurance for tricycles, taxis, and Grab. - 🎨 The Skin Tone Paradox
Why Americans spend money to get darker while many Filipinos spend money to get lighter. - 🔊 The Sounds of the Philippines
The soundtrack of everyday Philippine life—and why I eventually learned to appreciate it.
← Return to 🇵🇭 My Philippines Retirement
Bunker Rule
Discussions about money, culture, and travel can bring different perspectives. Please keep comments respectful and based on personal experiences. The goal is to better understand one another—not to criticize an entire country or its people.
Bunker Notice
One American retiree’s experiences adjusting to life in the Philippines. Every culture has its own customs, assumptions, and economic realities. These articles are written to promote understanding, patience, and appreciation—not stereotypes. The more we understand each other’s perspectives, the richer the retirement experience becomes.