Oh, I really like this example of the folklore. It illustrates very well what I'm both excited and worried about.
Yes, some situations are universal, and having them in a setting that is not the reader's most relatable setting make these situations even more universal, without losing on the relatability. And personally, as a reader, I would be even more attracted to such story, because there is a kind of comfort coming from feeling close to characters in less relatable settings - Especially for me who never felt I belonged anywhere.
And that's where there are also different types of unrelatable settings. Both the high school drama and the Philippine mythology are not directly relatable to me, but the second one would attract my attention (probably because I expect it to be rich, dense and deep (interesting 'unrelatable' setting), in contrary to the high school drama which I would expect to be more superficial and not likely to be dense and rich (offputting 'unrelatable' setting). Obviously, this is a quick judgement, and depending on individual stories, it could go the other way.
But then:
My point of view of someone who loves reading things from different countries:
It is unavoidable that the local reader and the international reader will get a different feel. I would even say it can happen within a small area. I'm originally from France, not that big country, but a lot of my childhood experiences were difficult to understand for my university friends, 150 km further west. They had no German influence, I had a lot of that, and that was enough to bring a certain difficulty to understand child age nostalgia, because that's not things that can be learnt. We were, however, totally able to discuss cultural difference, accents etc, because that, can be learnt.
But I don't think there is necessary a gap as big as you fear, Keii4ii, at least for the attentive international reader. Not feeling deep nostalgia for something, because one did not live these things, does not mean that one can not guess the story speaks of nostalgia.
One of the first work that comes to my mind when I think of nostalgia is the Malgudi series by RK Narayan. It takes place in an imaginary Tamil city in the 1940'. I was born in 1980 and I've been in Tamil Nadu only after reading these books. So not necessarily the most relatable. But these books gave me the strongest feeling of nostalgia I have ever experienced with fiction. And when I finally went in TN... modernization aside I felt home right away.. because this series did such a good job bringing to my ignorant mind exactly all what was important to understand from the atmosphere of this place.. maybe in a little bit naive and slightly superficial way, that could explain how easy it was for a foreigner to understand.. but behind this apparent superficiality, that deep nostalgic feeling and the strength and accuracy of the description of the atmosphere gave just enough depth to be a lasting experience, that also had pertinence in the real modern world.
I'm getting maybe a bit off topic, but to be more concise, I think it's totally possible to make readers feel strongly connected in a meaningful way to stories set in a place they don't know at all.
I do think the reader has a big responsibility in that, though. If the reader comes with the idea of getting cheap, superficial, exotic entertainment, that what they will get from the story, even if said story is actually rich and deep.