Filipinos are becoming more financially literate, and more people are looking for ways to grow their hard-earned money. Even young people are becoming aware of the importance of investing early, and they are actively looking for ways to make an investment in the Philippines.
More overseas Filipino workers (OFWs) are also learning to plan for retirement, looking for ways to earn passive income in the Philippines while they’re still working abroad. They are known for sending most of their earnings to their families, and only 1 in 3 OFWs reportedly save for retirement. Nowadays, many of them are looking to find a good investment in the Philippines for OFWs.
It’s a lot easier to start looking for investments in the Philippines now. No matter what kind of investment you plan on making, plenty of online channels are available to help facilitate your investments and payments. What are the different types of investments in the Philippines, and which ones are suitable for individuals and OFWs?
Many individuals start with variable universal life (VUL) insurance as their first investment in the Philippines. This type of insurance policy bundles a life insurance plan with a cash-value account that is invested in different sub-accounts.
This is an attractive investment option for Filipinos since it provides insurance coverage while also allowing the policyholder to have investments. However, because of the nature of market investments, this might not be ideal for those who are risk-averse.
Mutual funds and unit investment trust funds (UITF) are also common among starting investors. They work identically, with the investor participating in funds and earning a profit based on the fund’s performance. Mutual funds are bought in shares while UITFs are bought in units.
Those who already have bank accounts can easily purchase UITFs through their banks, while professional fund managers handle mutual funds. These require low minimum investments and can yield high potential returns.
Bonds are also available through banks and other financial institutions. This type of fund is offered by the government as well as large corporations, and are pooled investments managed by a portfolio manager. It is considered a low to moderate-risk investment and can provide a steady flow of interest income.
Lastly, stocks are now more accessible to individuals and even OFWs. It is now easier to participate in the Philippine Stock Exchange either through stockbrokers or through online trading platforms. However, growing your money in stocks requires a steep learning curve. Also, the outcome of this type of investment is uncertain due to the volatility of the stock market.
Some prefer investments that can easily boost their wealth in the Philippines or even exceed their monthly income, especially OFWs. One of the smartest ways to do this is by setting up a business.
In a recent YCP Solidiance insight article titled “Developing the Philippines’ E-commerce Industry,” the e-commerce industry is expected to grow faster in the coming years. With the low barrier to entry in the Philippine market, those looking to increase their income and start investing can start by putting up a business online right away.
Real estate is also a popular investment. With so many communities and townships being developed across the country, it can serve two purposes for investors. One is by having an actual representation of their investment through the property. The other is by using it as an income stream by renting it out or selling it once its value has significantly appreciated.
Depending on a person’s risk appetite, investment objectives, and capacity to manage, there are plenty of investment opportunities available in the Philippines. All of these are now more accessible, and once you decide on the best investment for your future, you can dedicate a portion of your income to saving for retirement and to growing your wealth.