I have a w115 with a 200 w115 engine. I live in the Philippines where it gets kinda hot in the summer. I leave my radiator cap half-open when using my car at all times. I do this because I have had my hoses blow out or get pulled out from the neck/hose clamps when the system builds up pressure. water does not spill out, and the temp never exceeds 90 or 100. Question: Would this arrangement (half open radiator cap) affect the water circulation in any way? I'm worried that this may result in poor water circulation or possibly heat localization which may lead to cylinder head or block failure. Your thoughts are much appreciated.

Don't know about heat localization/circulation but, it will change the temperature. It may cause the radiator to boil over due, to lack of pressure. You will lose coolant at the very least.

The only thing I can suggest is to change your thermostat, check hoses, citric acid flush, coolant change, and checking radiator for leaks. You could put a bottle of Redline Water Wetter also. Does your auxilary fan switch function? Check/replace that also.

Doing that will not affect circulation, but depending on how "half opened" you cap is, as s60 stated, you will probably lose coolant w/o pressure in the system. if you car is overheating, try and find/repair/fix the problem rather than tolerate it with a "half" :D baked solution..:D...