Manila is among the cheapest cities to live in for the global rich, according to an annual ranking by Swiss private bank Julius Baer.
The capital of the Philippines was the 21st most expensive city for high-net-worth individuals in 2022, out of 24 cities across the globe that were included in Julius Baer's Global Wealth and Lifestyle Report, which was released on June 15.
Manila fell five places from its 16th position in the 2021 report.
The five most expensive cities were Shanghai, London, Taipei, Hong Kong, and Singapore.
Only three cities were cheaper for the wealthy than Manila: Mexico City, Johannesburg and Mumbai.
Manila was the only city in the index that became cheaper on average over the last year.
Lifestyle costs of the rich
The ranking was based on the prices of a basket of items that were purchased by high-net-worth individuals, which the report defined as people with bankable household assets of a million US dollars or more, excluding assets such as the primary residence or pension funds.
The index measured the cost of goods and services used by the rich, including cars, jewellery, ladies’ handbag, ladies' shoes, men’s suit, wine, whisky, residential property, business class flight, health insurance, hotel suite, Lasik, lawyer, MBA, degustation dinner, treadmill, watch, technology package, and bicycle.
Men's suits, jewellery and cars were the most expensive items in Manila when compared to prices of the same items in other cities.
Lawyers, degustation dinners and residential property were the cheapest items compared to other cities.
Manila bucks trend of rising costs
Amid a global trend of rising costs, Manila bucked the trend by being the only city in the ranking in which prices generally dropped over the last year.
Within Asia, which was the most expensive region, Manila was the ninth most expensive city out of 10 cities. Mumbai was the only Asian city that was cheaper than Manila.
In the report’s foreword, Julius Baer’s Head of Wealth Management Solutions, Nicolas de Skowronski, said, “Identified by this report in previous years as an underlying financial trend, life for everyone continues to become more expensive. Ongoing global uncertainty, prompted by the pandemic, and sustained by rising inflation and increased geopolitical tension, has only sharpened the need for investors to protect their purchasing power and, in the long-term, actively plan to preserve their wealth.”
According to the report, the Philippines' GDP was impacted by the pandemic, but no more than most Asian countries, and was projected to rebound in 2022. Decreased costs were attributed to a number of factors. "Problems ranging from corruption to extreme weather events mean its progress has been slower than its neighbours, and recent political changes raise the spectre of the economic troubles of the 1980s. The most affordable residential property in the region is not enough to counter these factors holding the country back as others race forward," said the report.
While rich people in Manila appear to enjoy lower costs of living compared to the world's wealthy even as they accumulate more wealth, the perennial problem of economic inequality in the Philippines has only worsened, especially because of the COVID-19 pandemic.
An April report by think tank IBON said that that government economic policies continued to favor “super-rich” oligarchs, big business and foreign investors, while poverty and unemployment increased during the pandemic. The government's over-reliance on lockdowns and lackluster support for fiscal stimulus were cited as primary reasons for the worsening poverty situation in the Philippines.
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