Cosmetic procedures and luxury handbags remain a relative bargain in the Philippines compared to neighbors in the region.
This was one of the insights included in the latest Asia Wealth Report of Swiss private bank Julius Baer, released Oct. 4.
Now on its sixth edition, the report revealed spending trends among Asia’s high net worth individuals, or those with a net investable wealth of at least $1 million, spread across 11 cities.
Julius Baer ranked the Philippines’ capital as the fourth cheapest place to obtain luxury goods and services, advancing from third place last year despite a 0.62 percent decline in prices.
Holding on to their positions in 2015, Shanghai remained the most expensive city while Mumbai, by comparison, was the cheapest. Other cities ranked included Singapore, Hong Kong, Taipei, Jakarta, Seoul, Kuala Lumpur, Bangkok and Tokyo.
The report’s main feature was its lifestyle index basket, which sampled 21 goods and services the wealthy typically buy. These range from Botox injections and cigars to fine wines and high-end cars.
According to Julius Baer, Manila was still the most inexpensive for those shopping for luxury homes and “facial aesthetics.”
For example, a 370-square-meter home (4,000 square feet) in a “prime location” would cost $1.8 million (P87 million) in Manila against Hong Kong, the other end of the spectrum, where the same property would cost $41.2 million (P2 billion). The regional average was $8.53 million, Julius Baer said.
The segment has been expanding as expatriates shift from renting units to owning them, and money continues to come in from Filipinos based overseas, the bank said.
According to the index, Botox injections in Manila could be had for as little as $151 against $900 in Shanghai. The country’s capital was also the least expensive city to purchase branded ladies’ handbags, jewelry, expensive men’s suits, and get a tooth implant.
What the budget-friendly millionaire and billionaire should avoid buying here: Rare wines.
Julius Baer said a 750ml bottle of Chateau Lafite Rothschild 2000 would set one back about $3,092. That same bottle costs $1,487 in Kuala Lumpur, Malaysia and regionally, it retails for an average $2,227.
Another splurge in Manila was golf club memberships. These could cost up to $790,000, or five times their price in Singapore.
“Our view on the Philippines economy is neutral, as much depends on the new government’s ability to execute on announced policies,” Julius Baer noted. It cited the Duterte administration’s plans to increase deficit and infrastructure spending over the next six years.
Julius Baer said that overall, the cost of items in its lifestyle index slipped 1.68 percent compared to 2015. There were several drivers to consider, including currency volatility, government intervention—austerity measures in China was one example—and the changing competitive landscape.
Nevertheless, the report was clear that wealth creation in the region would continue to expand in the coming years. Investable assets held by high net worth individuals were forecast to hit $14.5 trillion by 2020. Julius Baer said that represented a growth of 160 percent in the current decade.