MANILA — Price increases notwithstanding, Manila remains one of the cheapest cities to live in, according to an economic research group.
The Economist Intelligence Unit (EIU) said Manila is among the 10 cities with the lowest cost of living, out of the 140 cities included in its “Worldwide Cost of Living 2011” report released last month.
Manila is tied with Dhaka, Bangladesh for 124th place (62 cost of living index points), up from last year’s 128th place (56 points). The EIU used New York as the base city with index set at 100 points.
The in-house research unit of the Economist analyzes the point-of-sale prices of 160 products and services for the biennial report, which is published in June and December.
In the latest round, Tokyo in Japan was found to be 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, meanwhile, is 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,” the report said.
Joining Karachi, Manila and Dhaka in the list of cheapest cities were Panama City, Panama; Algiers, Algeria; Jeddah, Saudi Arabia; New Delhi, India; Tehran, Iran; Mumbai, India; and Tunis, Tunisia.
“There are two major reasons why a city’s cost-of-living index will change over time: exchange rate movement and price movement,” the EIU said.
“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 said.
The EIU gave a 25 percent weight to the category shopping basket, 19.5 percent to transport, 18% to recreation and entertainment, and 13 percent to clothing. The remaining percentage was divided among alcoholic beverages, household supplies, personal care, tobacco, utilities and domestic help.
Asked to comment on the EIU report, National Competitiveness Council co-chairman Guillermo M. Luz said, “The survey results will help the government in attracting more people to relocate and live here in Manila… and I believe that aside from enjoying a cheaper cost of living, they (expatriates) enjoy the quality of life our country offers.”
“Manila has been a good-valuefor-money city,” Mr. Luz added. University of Asia and the Pacific economist Victor A. Abola said, “Compared with other Southeast Asian cities, Manila offers cheaper household help or services for expatriates and cheaper food items.” he added. (Business World)