Author: Investa

Unemployment benefits are government-provided financial assistance programs. The goal of which is to support those who lost their jobs and are still looking for new employment.

While not known to many, the Philippines’ SSS provides unemployment benefits in the form of cash to those who fit the criteria. Here are some of the requirements you should know about, along with the process involved.

Qualifying Conditions for Unemployment Benefits

The SSS grants unemployment benefits to members who are involuntarily unemployed. This could be due to company downsizing, closure of operations, or cost-cutting measures being taken. Of course, this would mean that employees who lost their jobs due to misbehavior or negligence aren’t qualified. According to the SSS, these prohibit individuals from receiving the unemployment benefits:

• Serious misconduct
• Willful disobedience to lawful orders
• Gross and habitual neglect of duties
• Fraud or willful breach of trust/loss of confidence
• Commission of a crime or offense
• Analogous cases like abandonment, gross inefficiency, disloyalty

Generally, the individual should also not be older than 60, along with other age-related restrictions. The applicant should also meet the following criteria:

• Has made at least 36 monthly contributions
• 12 months of which should be in the 18-month period right before the involuntary separation

Applying for Unemployment Benefits

The process is fairly simple and can be done through the SSS’ members portal. Those looking to apply for unemployment benefits will need to present an original and photocopy of one of the following:

• UMID
• SS Card
• Alien Certificate of Registration
• Driver’s License
• Firearm Registration
• License to Own/Possess Firearms
• Permit to Carry Firearms Outside of Residence
• NBI Clearance
• Passport
• Postal Identity Card
• Seafarer’s Identification and Record Book
• Voter’s ID

If none of the above are available, two different IDs can be used instead. However, both of them should have the person’s signature and at least one of the two includes a photo. 

In addition, a DOLE certification is also required. For OFWs, a certification should be acquired instead from the Philippine Overseas Labor Office (POLO). 

The Amount of Unemployment Benefits

An qualified unemployed individual can receive 2 payments, each worth 50% of their average monthly salary credited (ASMC). For example, a person who earned PHP20,000 for 10 months and PHP30,000 for the following 10 months will have an ASMC of PHP25,000. He or she is entitled to 2 payments worth PHP12,500 each.

The money will be credited to the individual’s SSS UMID card, or to a UBP Quick Card Account. 

Last Notes

Something that needs to be remembered when applying for unemployment benefits is that the documents provided should all have coherent information. The SSS has rejected thousands of applications over the recent years largely due to discrepancies. 

You also don’t have to worry about paying back the cash received since this is a benefit, not a loan. Again, the goal of unemployment benefits is to help individuals get back on their feet after losing their jobs.

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Investing is a way to make your money work for you. It allows your money to grow and gain interest in the long run. However, Investing is not just a one-time transaction. It is a process where you have to stay diligent in order to maximize your returns. This article will give you tips on how to keep investing consistently. 

Know Your Investing Goals 

To help you invest consistently, you must first know your Investment goals, which will give you a big picture of your investment blueprint. For instance, before you decide to put your money into PAGIBIG MP2, which has a lock-in period of five years. You should first determine if your investment is a long-term type of investment or a short one. But what is the difference between the two?

• Long-Term Investment

A long-term investment is a strategy to invest your capital for a long time. This type of investment leverages time to maximize investment and yield high returns. For example, Mark bought a one-hectare land property eleven years ago for two million pesos. He waited a couple of years before he sold his property for triple the price because the land value had appreciated over the years. 

• Short-Term Investment 

 On the other hand, a short-term investment strategy is where an individual invests in assets intending to hold them for a relatively short period, typically less than one year. Swing trading is an example of short-term investing as the market is volatile. You need to know when you should buy low and sell high. 

Create A Separate Account

Creating a separate investment account may help you segregate your savings, emergency, and healthcare fund. For example, you can make a different bank account solely for cryptocurrency investments. Another one for emergency funds, just in case something urgent came up. Through this, you can sort out your assets efficiently and serve their purpose while avoiding mixing your capital with other funds. 

Build Your Habit Loop: Set A Reminder 

Setting a reminder is essential to build a habit of investing consistently. According to the book “The Power of Habit” by Charles Duhigg, there are three stages in a habit loop— Cue, Routine, and Reward. 

It will help if you start first with your cue. It might be an alarm from your phone every 15th of the month to invest in a cooperative fund in your office. This alarm can be your cue to walk to the cooperative office of your company and deposit your share. Once you build this system, you will have a routine of walking every 15th of the month to the cooperative office, paying your share, and becoming your monthly habit to invest. 

Track Your Investments 

Tracking your investments may encourage you to maintain your assets and invest consistently. Observing the market trend lets you understand what you should do to mitigate the effects of market volatility. This lets you know where to put your capital and yield high returns. You can use tools to monitor your investments, such as the InvestaWatcher. 

Investing Should Not Be A Sacrifice: Celebrate Small Wins 

Some people fail to invest consistently because they view it as a sacrifice rather than an opportunity and a process. For example, Anne is targeting to invest nine thousand monthly in a mutual fund with her fourteen thousand salary. Thus she chooses to deprive herself of eating at her favorite restaurants to meet her investment goal. But the reality is, delaying gratification is often a skill that only some possess. 

Therefore, you should occasionally take a bite of your cake to keep you motivated to invest consistently. It might be treating yourself in a restaurant if your investment yielded a high return in a specific period. Through this, your investment journey can be sustainable in the long run and have a higher possibility to invest consistently. 

Final Word

Investing is a powerful tool that allows your money to work for you and grow over time. It is not a one-time transaction but a process that requires consistent effort to maximize your investments and achieve their full potential. To invest consistently, it is essential to have a sustainable investing approach and a clear understanding of your investment goals.

Overall, consistent investing, thoughtful goal setting, organization, tracking, and a positive mindset, can lead to financial growth and success over time.

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Fixed income assets are financial instruments that help provide a steady stream of passive income to investors. They usually involve loans or debt obligations issued by governments, corporations, or other entities. In return for the debt, a fixed interest rate is given to the lender.

Fixed income assets can be a big help in letting you reach financial freedom. While stocks and mutual funds can have bigger returns, they tend to be volatile. Fixed income assets can serve as the safety net of your portfolio. Even as the market is in a downturn, they can still help you get a return for your investments.

Here are some examples, and how you can gain access to them!

1. Government Bonds and T-Bills

Government bonds, also known as treasury bonds, are debt securities issued by governments to raise funds. These fixed income assets usually have fixed interest rates and a set maturity date. They are often touted as one of the safest investments available, but the catch here is that returns are often lower due to the smaller risk involved. Treasury bills (or t-bills) are similar in many aspects, just that they have a maturity date of less than 1 year whereas treasury bonds mature after more than a year.

Some common examples are the RTB25 and the Premyo Bonds. The RTB25 provides a 2.375% interest rate per annum where interest payments are made every quarter. The bond matures after 3 years. The Premyo Bonds are bonds with a gimmick added in. Aside from receiving a 1.25% interest rate with a 1-year maturity, Premyo Bond investors receive raffle entries! The prizes include brand new cars and cash for the lucky winners.

Usually, investors would need to get in touch with their local bank of choice to set-up investments in government bonds or t-bills. However, the process is easier now thanks to BONDS.PH. A platform from UnionBank, it aims to make investing in treasury bonds and bills easier by making it possible to do so just from your mobile phone.

2. Corporate Bonds

Corporate bonds are fixed income assets that help companies raise capital. They are also debt instruments similar to government bonds, but are perceived as riskier assets. Corporate bonds also have fixed interest rates (paid regularly) and predetermined maturity dates. They usually feature higher interest rates than government bonds and bills given the increased perceived risk.

Choosing which corporate bond to invest in comes down to your due diligence. Similar to investing in stocks, try to figure out if the company offering corporate bonds is one that will stand for a long time and if the debt will be put to good use. 

As for purchasing them, the experience differs per broker. The process is somewhat similar for different banks and brokers – fill up the forms and go through the usual registration processes. Once you’ve got an account up and funded, you then have to figure out what your broker will let you do. Some brokers will only allow the purchase of newly issued bonds through primary offerings. Others, like Security Bank, allow for the purchase of “2nd hand” bonds through the market. The ability to purchase bonds from the market is a BIG convenience, especially if you plan to invest periodically. Companies don’t issue new bonds everyday, so your money might get stuck for a while if you have to wait for new primary offerings.

3. Time Deposits

Time deposits are financial products usually offered by banks. By agreeing to keep your funds with the institution for a specific period, you’ll receive a bigger interest rate compared to the usual savings rates. 

Usually, you’ll find time deposit options that span through 30, 60, 90 days and onwards. Rates can sometimes range from 0.5% up to 1.5% per annum, but largely differs based on the bank offering them and the amount to be deposited. If you’re looking for bigger rates, digital banks have started to offer time deposits themselves. The likes of UnionDigital Bank are offering time deposits with rates up to 6.75% for 1 year, while others such as Tonik offer similar time deposit options with more flexibility at a rate of 6%.

If you want to invest in time deposits, it would be best to first figure out which digital bank offers the best options suited for you. Once you create an account with the one you like, just look for the time deposits section and the process should be straightforward from there. 

4. Pag-IBIG MP2

The Pag-IBIG MP2 is a special mention in this list. No, it’s not a fixed-income asset, but it is definitely something finance savvy Filipinos should know about. The Pag-IBIG MP2 is a voluntary savings program that any Pag-IBIG member can join. The minimum remittance for the MP2 program is PHP500. 

The most attractive feature here is the solid track record of the fund. Throughout the past years the fund has delivered returns of 6% or more! Dividends even reached as high as 8.11% back in 2017. While this isn’t as eye-catching as some promos from digital banks, you have to consider that the MP2’s returns aren’t just a promo – their rates have been high for multiple years now, and will most likely continue to range at least above 5% per year.

Investing in the MP2 should be easy now given that Pag-IBIG launched the Virtual Pag-IBIG platform. All you have to do is go to this link and proceed to create your savings account. From there you’re good to go.

On a Final Note

With the different fixed income assets available along with the multitude of investment options, we now have a lot of tools to help us reach our financial goals. All that’s left is for us to create a plan and stick to it.

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Balancing your needs and wants is essential to achieve financial freedom because this can significantly affect your spending habits. Financial freedom requires knowing how to determine and balance between needs and satisfying our wants. This article will discuss balancing these two to attain financial freedom. 

Needs and Wants: What’s the Difference?

Differentiating between needs and wants is essential to achieve financial freedom. Needs encompass shelter, food, education, transportation, and healthcare. Basically, It is your primary need to survive for some time. On the other hand, wants are driven by leisure as comprised of non-necessity in your daily life, such as watching the cinema and buying a bracelet. 

Know Your Priorities

In achieving financial freedom, we should learn how to prioritize our expenditures. Creating a monthly spending list is a hack to classify your priorities from high to low depending on their social value. For example, you may put your monthly rental payments as the first on the list and last for a phone case that you have always wanted. Through this, you can distinguish things that matter the most and avoid splurging that don’t. 

Create a Budget Sheet

Creating a budget sheet may help us to segregate our finances effectively by allocating a significant portion of our income toward meeting essential expenses, such as shelter, food, and transportation. Through this, Individuals can lay a solid foundation for their financial well-being. It involves careful planning and disciplined spending, ensuring that money is distributed efficiently and no basic needs are disregarded.

Delaying Gratification

Delaying Gratification is the capacity to defer an impulsefor an immediate reward to receive a more favorable reward later. It is crucial to cultivate self-discipline and resist impulsive buying behaviors by practicing mindful spending and carefully evaluating the value and necessity of purchases. For example, you plan to buy an expensive headphone, but you defer your purchase to invest instead. 

Save and Invest

Saving and investing are two key strategies to achieve financial freedom. Saving involves:

• Setting aside a portion of income for future needs.
• Creating a safety net.
• Allowing for future investments.

It requires discipline and wise budgeting. Investing, on the other hand, involves putting money into assets that have the potential to grow over time, such as stocks, bonds, or real estate. Through this, Individuals can grow their wealth and create passive income streams by investing wisely. Both saving and investing work hand in hand to build wealth, make financial security, and ultimately pave the way to achieving financial freedom. 

Balancing needs and wants is an integral aspect of achieving financial freedom. It needs consistency, and an understanding of the distinction between needs, your wants, knowing your priorities, delaying Gratification, saving, and investing.

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Budgeting helps us stay on track toward reaching our financial goals. With the rise of digital banks, people have become more conscious of their finances. 

While many focus on the high-interest rates provided, budgeting through digital banks can also be a big help. 

Creating a Budgeting System

The first step in creating a budgeting system is figuring out how much you will set aside for different expenses. There are a lot of alternatives here with no definite best way to budget for expenses. Some people prefer going with the 20/30/50 rule to make things simple, where 50% of their money is for necessities, 30% is for wants, and 20% is for savings and investments. Others prefer putting great detail into how they budget, with each expense planned to the dot.

While each way has its ups and downs, the more important question is how you’ll be able to execute the plans laid out. The common problem is that people tend to overspend. Usually, this is due to failing to keep track of how much was spent on non-essentials. 

Budgeting through digital banks can keep you on track

Aside from high-interest rates, something digital banks usually boast is the ease of opening an account. Nowadays, it usually takes less than 30 minutes to open a digital bank account. The only documents needed would often be a government ID and proof of address.

Being able to quickly and easily open multiple accounts can be a big help in sticking to your budget. By creating multiple accounts, you can designate each one with a specific purpose. For example, one digital bank can be used solely for the purpose of holding your savings. Another can be used for your bills and necessities such as food, rent, etc. Then a different digital bank account can be used for non-essentials. 

Instead of having one big amount of money where you still need to remember how much is allotted for something, you can just allocate money to different accounts from the start. By budgeting through digital banks, you don’t need to put in the effort to remember your budget every day while also making it near impossible to overspend.

Which digital banks should I use?

There’s a multitude of digital banks right now, with each one having unique offers along with its own interest-rate promos. For example, Maya has a case for being one of the easiest to use among the different digital banks. Most establishments accept payments from Maya, where you’d only need to use a QR code to finish the transaction. You can send Pag-IBIG contributions through your Maya account, and you can also claim your own Maya debit card. Cashing in is also free if you’re transferring funds from certain banks. These make Maya a solid choice to use for bills or expenses. The digital bank also offers different promotions to increase your interest rate, but it’s unclear how long they can keep running high-interest rate promotions.

There are also others like Seabank which offer 15 free transactions across any bank every week. On top of that, they also offer a 5% interest rate for balances below P250,000. Then there’s Tonik which offers a group stash feature – handy for groups that tend to save up together for trips or even for Paluwagan. 

You can check out our list of digital banks if you want to look at and compare the different features and promotions each one offers. As for which ones to use for what, it mostly depends on what’s easiest for you. For example, you can set up your budgeting system so that your Maya account serves as your necessities account for the ability to pay using QR. A Seabank account could be for the bills, while you use GCash for wants.

On a Final Note

It might seem troublesome at first to set up a system like this. But, once it’s up and running budgeting should become an easier task to do every month. Just remember to always keep your pins and passwords safe to protect yourself from phishing!

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Being able to save money is the very first step you need to take if you want to improve your financial situation. Here are five saving tips you shouldn’t miss out on!

1. Keep track of your money

Among the different saving tips, this is the most important. No matter how good you think you are at keeping track of things mentally, you still need to list down your savings and expenses somewhere. Often times people who don’t keep track of their money tend to overestimate their financial standing. Furthermore, these are the people who are usually unable to save. Since expenses aren’t being tracked, they can often eat away at the money supposedly set aside for savings. 

By regularly monitoring your savings and expenses, you’ll be more aware of how you currently stand financially. In fact, this will also help you better understand your own money habits. You’ll be able to figure out why you usually spend more than you should, and how you can make an adjustment. Always remember that you can’t improve what you don’t keep track of.

2. Start even with just a small amount

Starting to save even with a small amount at first can have a big impact. Of the different saving tips, this can be one of the easiest to start. It can help you establish the habit of saving and can let you become more responsible financially. When you make the conscious effort to save even a small portion, you begin to develop financial discipline. The amount might be small at first, but as time goes on the discipline you gain will help prepare you for when you are able to earn more per month.

3. Use the 3-day rule

Have you ever made a purchase before, only to realize you really didn’t need it? This is where the 3-day rule comes in. This is when you intentionally wait for three days before making a purchase, especially for non-essentials. This strategy works by helping you avoid impulsive purchases. 

It’s important to treat oneself from time to time. We still need to enjoy life even as we work hard towards our goals. However, we can’t just spend all of our money on enjoyment. As we budget our money for non-essentials, the 3-day rule will help us make the most out of it. While you wait before making the purchase, try to think of the use case scenarios the purchase will help you with. If you feel that it will make you happy for a long time and it’s within your budget, then go for it. If not, then it might be worth holding off on the purchase. 

4. Automate how you budget

This saving tip might not be common, but it can also provide a big impact. Whenever you can, try to automate different parts of your cash flow. For example, if you have bills to pay, try to set up an automatic payment system if your debit or credit card allows for it. If your company has an auto-invest program, it might be worthwhile to enroll in it since it will help you invest hassle-free. 

Willpower is a scarce resource. While we need to put in effort to become financially responsible, it’s always better to have a system that makes things easier. Bestselling author David Bach captured this by saying that people sometimes fail to budget because “You’re too busy, and you will just get frustrated and fail.” Experiment with the different features your banks and cards have, and try to make a system that makes budgeting seamless for you.

(P.S. If your company wants to conduct an auto-invest program for its employees, feel free to reach out to us!)

5. Spend more on quality

When people try to save, looking for cheap alternatives is a common way to save more money. However, sometimes paying up a bit more for a better quality product can sometimes be the wiser financial decision. For one, higher quality products sometimes last longer than cheaper ones. A 10-peso ballpen is far cheaper than a 50-peso one. But, if the cheaper one only lasts a week while the 50-peso one lasts for a year, then the more expensive option will actually be more worth it to buy. Always remember that in order to save the most amount of money, you have to be wise with every decision.

How long will it take to reach financial freedom?

Different people have different circumstances. It’s important to remember that you should focus on yourself. The road to financial freedom might be easy for some, and hard for others. Just remember that no matter how long or hard things get, the end goal will always be worth it.

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For those unaware, Filipinos have their own unique way of saving money. Paluwagan is an informal way of saving as a group. It works based on the trust of each member of the group, usually consisting of at least three people. The participants will pool their funds and will receive lump-sum payouts based on a set interval.

While the practice is unregulated, a financial inclusion survey from the BSP shows that 14.8% of households save their money through paluwagan. Throughout the years, it remains an easy way for Filipinos to become financially responsible while also fostering camaraderie with each other. Even though this is a very simple way to start saving, the more important thing to remember is that it helps people get started.

“Saving a small amount soon builds up to a large amount”

How Paluwagan Works

As mentioned, Paluwagan requires at least 3 people to participate. These people would need to set rules such as 

1. How much the contributions should be
2. When their contributions should be scheduled
3. Who will receive their payouts first, and lastly
4. Who will handle the funds

To give fully showcase how this works, it might be best to explain it through a story:

Jobert, Anne, and Miguel all decided that they want to make a Paluwagan group among themselves. They set that each member will contribute PHP500 every Monday. The payout will be on Fridays, with the order of recipients being Jobert, Anne, then lastly Miguel. Anne volunteers to handle the funds for the group.

With that, on the first Monday, everyone contributes PHP500 with Anne safekeeping the funds. On the first Friday, Jobert will receive PHP1,500 as his payout. Then on the second Monday, everyone will give their contributions again. This time, Anne will receive the PHP1,500 payout on the 2nd Friday. This cycle will continue until each person receives PHP1,500. At the end of the cycle, it’s up to them if they want to do another cycle or if they should stop.

Pros and Cons

One of the main benefits of paluwagan is that it is an inclusive practice. Since the participants themselves set how much contributions can be, low-income households are able to join.

Depending on how strict the group is, the practice also allows Filipinos to benefit from a framework that makes it easier to be responsible with their money. Rather than having to discipline oneself alone, paluwagan creates an accountability group between the participants. Everyone aims to push each other to save since the fault of one will adversely affect others.

On the other hand, the main disadvantage of paluwagan is that fraudulence could happen. Especially if the group isn’t tight-knit, some members could suddenly disappear the moment they receive their share. Since this is just done informally and usually with no written agreements, money could be lost if some members aren’t trustworthy.

Also, since the money is circulated between members, interest isn’t earned. However, some banks have already started providing group-savings accounts that could help with this. The participants would just need to talk about how they will manage the account, and the money that comes in.

Final Thoughts

For those seeking to enhance their finances, Paluwagan can be an appealing option. However, it’s important to take precautions and make wise choices. Making sure the members are trustworthy should be prioritized. Utilizing different tools to keep track of contributions, and even making use of what digital banks offer could be a great way of improving the experience as well.

Overall the practice should be seen as a first step towards financial freedom. Once you’ve got the habit of saving down, it’s important as well to learn how to make your money work for you.

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