With 7107 islands, the Philippines is rising steadily as Asia’s new land of opportunity. With the firebrand President Rodrigo Duterte now in the Malacañang Palace, some solid financial regulations, rich liquidity, and a revised tourism slogan, this could be the Dawn of a new age for one of ASEAN’s major players.
As an overseas Filipino worker (OFW) earning ten times as much as your fellow workers back home, would you take the bait and quit your job to start a business of your own? The prospect sounds perfect, especially for those who left behind their entire family in the country of their origin.
But for those of you who aren’t ready yet to resign from your 9-to-5 job for what you may consider a large undertaking, the following investment ideas are a good way to multiply your earnings:
Table of Contents
ToggleInvestment Ideas to Multiply Your Earnings
1. Unit Investment Trust Fund (UITF)
UITFs are ready-made investment schemes put up on the market by banks from different investors to achieve similar investment objectives. Professional fund managers are the ones who manage UITFs, making them good investment choices for people with no expertise in bond trading. Each UITF is regulated and monitored by a trust entity agreement, and approved by the BangkoSentral ng Pilipinas and by its Board of Directors, ensuring investor protection.
2. Stocks and shares
Putting your money in stocks is a great way to decrease your tax legally. Unless you sell your shares, you won’t need to file returns on your earnings. This gives your money double multiplying power. By factoring in compound interest, stocks also provide the highest ROI. The larger amount you invest, the longer time you put your money to work, the more you will earn. With patience, the stocks you buy will gain you cash dividends, which you can also reinvest.
3. Retail Treasury Bonds
RTBs are debt obligations issued by the Philippine government to raise funds. Being fixed-income instruments with predetermined maturity dates, the investor will be repaid the full amount plus accrued interest on the date of maturity. Considered the safest investment option (unless the Philippines defaults on its loans, which is unlikely), it is a great way to diversify your investment portfolio. With as low as P5000, you can enjoy high return rates with minimum accompanying risk.
4. Peso Treasury Bills
While considered a low-yield investment option, buying treasury bills beats keeping your money under your bed any time of the day. You buy them at discounted prices, yet get their face value at the date of maturity. The interest, which you can redeem in advance, is higher than in savings accounts or time deposits. What’s more, they’re practically risk-free, since the Philippine government is unlikely to default its currency debt.
5. Exchange Traded Fund
ETFs are open-end investments that track baskets of assets and trades on stock exchanges. Unlike close-end investments, an ETF investment company can release and regain shares to and from the public intraday. This characteristic means that ETFs can be bought and sold anytime of the day, making it easier for speculative investors to convert them to cash when and if they want to. ETFs are also low expense. They offer the advantages of index funds at a significantly less cost.
6. The Dollar-denominated Republic of the Philippines Bonds
Another Philippine government-issued debt security selling like pancakes these days are the ROP bonds. Giving higher returns than short-term investments, ROPs come with minimal risk. This is a great way for OFWs working in the United States of America to further diversify their fixed income portfolio. Your US dollars will be used in developing our country while you get paid regular interest.
If you feel like investing is out-of-character for you, another practical way to multiply your savings without quitting your job is to run your own business. Once your contract expires with your foreign employer or you get terminated, you would have an income-generating venture to fall back to.
But as an entrepreneur wannabe who has no experience running a business, how do you start one? Here’s a breakdown of the process to get you on the right track:
Tips on Starting and Running a Business
1. Start fresh.
Scout for an unmet demand in the market. Will your product or service benefit your end users in a way that others cannot? If the answer is not a resonating yes, then change the question. Identify which hobby of yours could be a good business idea. Do you like collecting comic books and playing video games? Start an arts and entertainment store. Are you brain-health conscious? A gluten-free market could do the works for you.
2. Validate your idea.
How do you know your proposal will be welcomed by potential buyers? Do objective validation. Ask others what they think of it. Your family and friends’ exclamations of “That’s exciting!” and “Wonderful idea!” are not constructive enough. Get criticism from the right people. Attend seminars with the most successful entrepreneurs, then ask for a candid feedback afterward. Conduct surveys from websites to find most searched keywords. Get input from respective mentors as to the profitability of your business plan.
3. Identify your team.
Will you be able to run your business on your own or will you need to hire at least five people to work for you? Consider your weaknesses that may put your scheme at a financial risk, and have someone who can fill in the responsibility for you.
4. Choose a location.
Aside from having a winning product, building your shop at the right spot could be the most important thing you could do. Consider how accessible your location is by foot or by car. Check out other establishments within the vicinity. Do they present any form of competition to your products and services? Is a parking lot available nearby? No matter how delicious and out-of-this-world your cakes are, if you can’t get customers through the door, then your pastry shop won’t last.
5. Determine the cost of startup to establish your budget.
It takes serious money to operate a business. From capital requirements and build up expenses to operating cost and contingencies, a starting entrepreneur requires sufficient funds to keep the business running. You have to be prepared to be broke for months while sales are still low (expected for the first few years until you become established), and customers are still building. A year’s worth of income may not be enough to cover the expenses so an OFW loan assistance may be needed.
6. Obtain licenses and permits.
Before you can legally run your business, secure first a Business permit from the city mayor’s office. A Mayor’s permit is required to register your business with the Bureau of Internal Revenue (BIR) and obtain a Tax Identification Number. Be early when planning to obtain your licenses and check online for their requirements to finish the process within one day.
Your Road to Riches
By investing your money or by starting a small business, you will be able to work full-time and earn money on the side until you have enough customer base to pack your bags and come home to the Philippines. After all, the economy of Asia’s rising tiger is getting better each day. It won’t be long before corruption and crime dwindle down to a fizzle.
Kash has been with Loansolutions.ph in marketing and business development roles since 2014. Now based overseas, she is a happy purveyor of financial literacy for OFWs and their families.