By Emmie Abadilla
Manila now ranks as the 109th most expensive city for employees working abroad out of 210 cities in Mercer’s 25th annual Cost of Living Survey 2019.
The country’s capital city rose 29 spots from 2018, posting the 4th sharpest climb in the world.
Multinational organizations are assessing the cost of expatriate packages for their international assignees and factors, including currency fluctuations, cost of inflation for goods and services, and volatility in accommodation prices, contribute to the overall cost of expatriate packages for employees on international assignments.
Mercer’s 2019 Cost of Living Survey finds that eight out of the top ten of the world’s most expensive cities for expatriates are Asian cities, resulting from high costs for expatriate consumer goods and a dynamic housing market.
The costliest city in the world for the second consecutive year now is Hong Kong, followed by Tokyo (2), Singapore (3) and Seoul (4).
Other cities appearing in the top ten are Zurich (5), Shanghai (6), Ashgabat (7), Beijing (8), New York City (9), and Shenzhen (10). The world’s least expensive cities for expatriates are Tunis (209), Tashkent (208), and Karachi (207).
Mercer’s survey is one of the worlds most comprehensive and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees.
New York City is used as the base city for all comparisons, and currency movements are measured against the US dollar.
The survey includes over 500 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
“Cost of living is an important component of a city’s attractiveness for businesses,” explained Yvonne Traber, Global Mobility Product Solutions Leader at Mercer. “Decision makers increasingly acknowledge that globalization is challenging cities to inform, innovate, and compete to foster the kind of satisfaction that attracts both people and investment – the keys to a city’s future.”
“While 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,” noted Mario Ferraro, Mobility Leader, Asia, Middle East, Africa and Turkey, Mercer.
Of the top ten cities in this year’s ranking, eight are in Asia due in part to a strong housing market. Hong Kong (1) remains the most expensive city for expatriates both in Asia and globally as a result of the housing market and currency being pegged to the US dollar, driving up the cost of living locally. This global financial center is followed by Tokyo (2), Singapore (3), Seoul (4), Shanghai (6), and Ashgabat, Turkmenistan (7).
Ashqabat climbed up 36 places to record the biggest increase in the cost of living, followed by Phnom Penh, Cambodia, which went up 34 spots to its current 108th rank, and Havana, Cuba, which rose 32 places to rank 133rd for 2019.
Mumbai (67) is India’s most expensive city, followed by New Delhi (118) and Chennai (154). Bengaluru (179) and Kolkata (189) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (40) jumped twelve places from last year. Hanoi (112) and Jakarta (105) also rose in the ranking, up to twenty-five and twelve spots, respectively. Bishkek (206) and Tashkent (208) remain the region’s least expensive cities for expatriates.
Australian cities have continued to fall in the ranking due to the depreciation of the local currency against the US dollar. Sydney (50), Australia’s most expensive ranked city for expatriates, dropped twenty-one places. Melbourne (79) and Perth (87) dropped twenty-one and twenty-six spots, respectively.
Decision-makers and compete to foster the kind of citizen satisfaction that attracts both people
Cities in the United States climbed in the ranking due to the strength of the US dollar against other major currencies as well as the significant drop of cities in other regions. New York jumped four places to rank 9, the highest-ranked city in the region. San Francisco (16) and Los Angeles (18) climbed twelve and seventeen places, respectively, while Chicago (37) jumped fourteen places.
Among other major US cities, Washington, DC (42) is up to fourteen places, Miami (44) is up to sixteen places and Boston (49) is up twenty-one spots. Portland (107) and Winston Salem, North Carolina (138) remain the least expensive US cities surveyed for expatriates.
In South America, Montevideo, Uruguay (70) ranked as the costliest city followed by San Juan (72), which jumped twenty-three spots. Other cities in South America that climbed on the list of costliest cities for expatriates include Panama (93), Costa Rica (131), and Cuba (133) rising twenty-one, ten, and twenty-two spots, respectively.
Cities that fell in the ranking despite price increases on goods and services and accommodation costs include Brazil and Argentina. In particular, São Paolo (86) dropped twenty-eight spots. Rio de Janeiro (121) dropped twenty-two places, while Buenos Aires (133) fell fifty-seven places. Managua (200) is the least expensive city in South America.
Although most Canadian cities remained stable in the ranking, the country’s highest-ranked city, Vancouver (112), dropped three places. Toronto (115) dropped six spots, while Montreal (139) climbed eight spots. Calgary (153) and Ottawa (161) remained stable.
Only one European city is among the top ten list of most expensive cities, which is Zurich at number five, followed by Bern (12). Geneva (13) is down two places. Eastern and Central European cities, including Moscow (27), St. Petersburg (75), Prague (97), and Warsaw (173), dropped ten, twenty-six, fourteen, and nineteen spots, respectively.
Cities in Western Europe, including Milan (45), Paris (47), Oslo (61), and Madrid (82), fell in the ranking as well, by twelve, thirteen, fourteen, and eighteen spots, respectively. The German city Stuttgart (126) dropped significantly as did Berlin (81) and Dusseldorf (92). Cities in the United Kingdom saw modest drops, including Birmingham (135), which fell seven places, Belfast (158) six spots, and London (23) four spots.
“Despite moderate price increases in most of the European cities, European currencies have weakened against the US dollar, which pushed most cities down in the ranking,” explained Ms. Traber, “Additionally, other factors like recent security issues and concern about the economic outlook, have impacted the region.”
Tel Aviv (15) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (21), Abu Dhabi (33), and Riyadh (35). Cairo (166) remains the least expensive city in the region. “Many currencies in the Middle East are pegged to the US dollar, which pushed cities up in the ranking, as well as steep increases for expatriate rental accommodations,” said Ms. Traber.
Despite dropping from the top ten most expensive cities for expatriates, N’Djamena (11) remains the highest-ranking city in Africa. Following are Victoria (14) rising seven places, and Kinshasa (22) rising fifteen spots. Libreville (24) dropped six places. Dropping one spot, Tunis (209) in Tunisia ranks as the least expensive city in the region and globally.