DFAS — military retired pay in the Philippines
The Defense Finance and Accounting Service (DFAS) pays military retired pay to retirees in the Philippines like anywhere else — direct deposit to a U.S. bank account or, in many cases, directly to a Philippine bank account that accepts international ACH.
- Direct deposit to Philippine banks. Major Philippine banks (BDO, BPI, Metrobank, Landbank) commonly accept DFAS direct deposit. Some retirees keep U.S. banking for the deposit and wire to a Philippine account periodically; others have DFAS deposit directly in pesos.
- Annual eligibility certifications. DFAS may send a "Certificate of Eligibility" or similar form annually. Complete and return it promptly; missed certifications can pause payments.
- Address of record. Update your DFAS address when you move. A current address is required for tax forms (1099-R), benefits notices, and SBP-related correspondence.
- U.S. tax withholding continues. Federal income tax withholding on retired pay (and any state withholding you have in place) continues as before. Adjust via DFAS myPay if your tax situation changes after the move.
SBP — Survivor Benefit Plan for a Filipina widow
The Survivor Benefit Plan (SBP) is a DoD-administered annuity that pays a surviving spouse up to 55% of the retiree’s base retired pay if elected at retirement. SBP is one of the most important benefits for a U.S. military retiree with a Filipina spouse, because it is structured very differently from Social Security survivor benefits.
- SBP is not subject to the Social Security alien-nonpayment provision. Unlike Social Security widow’s benefits — which generally stop after six months for a non-U.S.-citizen widow living abroad unless she meets the 5-year U.S. residency rule — SBP pays a Filipina widow in the Philippines without that residency hurdle.
- Election is made at retirement. SBP election is a one-time decision at retirement (with limited open-season windows historically). If you elected SBP, premiums are deducted from your retired pay during your lifetime, and your widow receives the annuity after your death.
- Pairs well with VA DIC. Dependency and Indemnity Compensation (DIC) from the VA is a separate survivor benefit available if death is service-connected. SBP and DIC interact — the SBP/DIC offset has changed under recent legislation, and the rules are worth confirming with the SBP counselor at the time of claim.
For the broader Social Security survivor analysis (including the 5-year residency rule, dependent-benefits calculator, and pre-death planning), see Filipina Family Survivor Benefits.
TRICARE Overseas in the Philippines
TRICARE Overseas Program covers U.S. military retirees and dependents living abroad. For the Philippines (Pacific region), TRICARE contracts with International SOS to administer claims.
- Reimbursement model is common. Retirees overseas often pay providers up-front and seek reimbursement from TRICARE Overseas, rather than seeing TRICARE-network providers who bill directly. Some providers in major Philippine cities are familiar with TRICARE and can bill TRICARE Overseas directly — ask before scheduling.
- TRICARE Standard / Select Overseas vs Prime Overseas. Retirees in the Philippines are typically enrolled in TRICARE Select Overseas (formerly Standard). TRICARE Prime Overseas is limited to active-duty service members and family at designated overseas duty stations.
- Medicare Part B for retirees age 65+. A retiree turning 65 should enroll in Medicare Part A and Part B to keep TRICARE coverage as TRICARE For Life. TRICARE For Life pays after Medicare — though Medicare does not pay outside the U.S., so the Philippines coverage is essentially TRICARE Select Overseas claims handling, not TRICARE For Life’s usual Medicare-primary model. Keeping Part B is still important for U.S. trips.
- Pharmacy. TRICARE’s overseas pharmacy program reimburses out-of-pocket prescription costs through claims, similar to medical services.
VA benefits abroad
VA benefits split into two tracks for retirees in the Philippines:
- VA disability compensation. Service-connected disability compensation pays worldwide. Direct deposit to a Philippine bank account is supported. Annual eligibility verifications may be required.
- VA healthcare. VA healthcare delivery in the Philippines is limited. The U.S. Embassy Manila historically hosted a VA Foreign Medical Program (FMP) office that processed reimbursement claims for service-connected conditions treated by local providers. Coverage is generally limited to service-connected conditions for retirees; this is narrower than VA stateside healthcare. Verify current FMP rules at va.gov.
- Dependency and Indemnity Compensation (DIC). DIC for a surviving spouse pays abroad if the service member’s death is service-connected and other DIC eligibility tests are met. DIC and SBP interaction is worth reviewing with a VA-accredited representative.
Federal Benefits Unit (FBU) at the U.S. Embassy Manila
The FBU at the U.S. Embassy in Manila is one of the largest overseas SSA offices in the world. It handles:
- SSA retirement claims and survivor claims for U.S. citizens in the Philippines
- SSA life-certification questionnaires (the "are you still alive" check sent periodically)
- Death notifications and survivor-benefit claim coordination
The FBU handles SSA matters; DFAS (military retired pay), VA (disability, DIC, FMP), and TRICARE Overseas each have their own channels and are not handled at the FBU. The FBU does not handle U.S. tax filing — for that, see the resources below.
U.S. tax reminders for military retirees in the Philippines
Military retirement pay is fully taxable on your U.S. federal return (some states exempt some or all of it; the Philippines does not tax it under the US-Philippines treaty). VA disability compensation is generally excluded from U.S. taxable income.
- U.S. filing continues. Living in the Philippines does not change your U.S. federal filing obligation. File annually, even if your tax due is small after withholding.
- FBAR if Philippine bank accounts cross $10,000. If your aggregate Philippine bank-account balance crosses $10,000 at any time during the year (e.g., DFAS deposits accumulating in a peso account), you generally must file FinCEN Form 114 (FBAR).
- FEIE generally not applicable to retirement income. The Foreign Earned Income Exclusion is for earned income (wages, self-employment). Pensions, military retired pay, Social Security, and investment income don’t qualify for FEIE. The Foreign Tax Credit may apply if you also pay Philippine income tax on any local-source income, but the US-Philippines tax treaty saving clause limits treaty-based exemptions for U.S. citizens.
- State tax. Your state of residence at retirement may continue to tax your retirement income unless you formally severed residency. The DFAS withholding setup follows your address of record — update it when you move and confirm with your state’s tax authority whether you owe state tax going forward.
Frequently asked questions
Can a U.S. military retiree have DFAS pay retired pay directly to a Philippine bank?
Yes. DFAS supports international direct deposit, and major Philippine banks (BDO, BPI, Metrobank, Landbank) commonly accept DFAS deposits. Some retirees prefer to keep U.S. banking for the deposit and wire periodically; both work.
Does SBP for a Filipina widow have the same 5-year U.S. residency rule as Social Security survivor benefits?
No. SBP is a DoD annuity, not a Social Security benefit, and is not subject to the Social Security alien-nonpayment provision. A Filipina widow generally receives SBP in the Philippines without the 5-year U.S. residency hurdle that limits Social Security widow benefits.
Does TRICARE Overseas cover routine care in the Philippines?
TRICARE Select Overseas covers care in the Philippines, typically on a reimbursement basis. Retirees usually pay providers up-front and submit claims to International SOS (the TRICARE Overseas Program contractor). Some providers in major cities bill TRICARE directly — confirm before scheduling.
Does VA disability compensation pay in the Philippines?
Yes. Service-connected disability compensation pays worldwide via direct deposit to a U.S. or Philippine bank. Periodic eligibility verifications may be required.
Is military retired pay taxed by the Philippines?
Under the US-Philippines tax treaty, U.S. government pensions (including military retired pay) paid to a U.S. citizen are generally taxable only by the United States. The treaty saving clause preserves the U.S. right to tax its citizens regardless.