Category: OFW Interest

“Sigurado ako marami ka ng pera.” “Wow, dollars, pautang naman.” “Ang ginhawa na siguro ng buhay ng pamilya mo, noh?” 

How many times do you hear these from friends and relatives?

For most Filipinos, being an OFW is a promise of good life. You get to earn more than what you can earn here and you are now able to provide a better future for your family. On the other hand, not everyone is aware of the hard work and sacrifices you need to make to be able to give your family a comfortable life. In fact, below are some of the truths behind the OFW life:

1) No, OFWs are not rich. 

There will always be success stories and former OFWs who made it big either in the Philippines or abroad. Believe it or not, most OFWs are still not living the good life despite earning more and in dollars. Some even have an existing home or auto loan with banks that they are unable to pay.

Blame it on the lack of financial knowledge, poor money management, and never-ending family issues that keep majority of OFWs from becoming millionaires.

2) Setting aside money for savings is never easy. 

Did you know that only 35.8 percent of OFWs have savings? The number is increasing over the years, but it only shows that not everyone are setting aside enough money for the rainy days.

With the bills that need to be paid, a balikbayan box waiting to be filled, and everyday expenses abroad, there is little left for savings. This could be the reason why OFWs continuously work overseas to be able to finance the family’s everyday living.

3) Income is not as big as you imagined. 

You might think that since OFWs earn in dollars, it means they earn more than what you earn. That is true. Unfortunately, they get to spend in dollars too. The cost of living varies per country, but one thing is for sure: it is more expensive to live in other countries than to live in the Philippines.

Yes, OFWs earn bigger income, but the cost of living is higher, which explains why they take more than one job to make ends meet.

4) It takes time to fill up a balikbayan box. 

Contrary to popular belief, OFWs don’t spend an entire day shopping to send a box full of goodies back home (they would rather work since a no work day equates to money lost). Believe it or not, it will take time for them to complete their family’s bilin, to the point of scrimping or foregoing basic necessities for their family’s sake.

5) Multiple debts is the new normal. 

Many OFWs are swimming in a pool of debt, even to the point of borrowing money to pay for placement and documentation fees. To pay-off existing loans. some even borrow money, thereby adding another loan in the list. This is normal for most OFWs.

6) Life overseas is not as easy as it seems. 

Filipinos working overseas are not living the carefree life. Most of them have more than one job to make end meets and be able to send a bigger amount in their family back home. Many are letting go of their basic needs just to cover the expenses of their family. Even if you see them posting travel pictures on Facebook, most likely they availed of budget travel package or saved up for their much-deserved vacation for months.

In other words, being an OFW is not as easy as you think it looks. It entails a lo of hard work and sacrifice, which we all need to acknowledge.

How many years are you working abroad? In that, say two or three years, how much were you able to save? If you don’t have enough cash to last you for at least three to six months, then perhaps you are doing something wrong along the way, at least in the financial aspect.

Don’t worry. It’s not too late for you. You can still protect your hard-earned money (and have something for the rainy days) with the help of these tips:

1) Be wise with your investments. 

Admit it. You are saving up for your dream home or dream car for the family. Apart from setting aside a portion of your money for that, you also considered getting a loan to cover a big chunk of the purchase price. The problem with this is that being an OFW is not forever and there is a possibility that you might not be able to pay the amortization regularly.

This is where investments come in. Consider opening a time deposit account or try the stock market.  The more diverse your portfolio is, the better for you to grow your money.

2) Protect yourself against uncertainties. 

The future is and will always be uncertain. You will never know what could happen to you, which is why you need to prepare yourself for the worst. By worst, this could mean loss of employment, sudden sickness in the family that could deplete your savings, or even death.

This is why it is important to be prepared.

Start by creating your own emergency fund, which should be at least three to six months-worth of your current income. Getting an insurance can also be another option to prepare you for uncertainties (know more about OFW Compulsory Insurance here). Setting up a retirement fund can also help you start in case an unexpected event happens.

3) Always be wise with your spending. 

Working overseas means you have access to things you don’t normally find in the Philippines. Since you are earning more (and in dollars), you might be tempted to buy anything you could find and send it back home.

If you are serious about protecting your hard-earned money, then you need to be wise with your spending. Here’s what you can do:

• Always set aside a portion of your money according to your expenses.
• Avoid sending the biggest chunk of your money for remittance.
• Consider packed lunch instead of buying food from restaurants.
• Don’t focus on material things. Your family doesn’t need new shoes every month.
• Share a room with fellow Filipinos to save on rent (in case housing is not part of your benefits).

In other words, be disciplined with your money and spend it wisely.

4) Avoid the “I deserve this” mentality. 

You sacrificed a lot for your family, to the point of leaving them behind and work overseas. You forego your own happiness just to give them a better future. So if you see that watch you’ve been eyeing for years, it’s okay to buy them since you deserve to reward yourself for all the sacrifices you made.

Here’s the thing: sometimes, the “I deserve this” mentality could go out of control. You might end up spending too much on certain things since you deserve it for all the hard work you did. If this continues, you might find yourself going back home with little to no money on your pocket – and you surely don’t want that to happen.

The bottom line is this: working overseas is never going to be easy. Protect your money by investing on you and your family’s future and not on what will make everyone in the family happy – for now.

Working overseas is not forever. There will come a time when your contract will expire, or you’ll get sick and required to go home, or the country where you’re working will experience crisis, prompting you and the thousands of Filipinos to go home. Before that happens, you want to make sure that you are prepared – and by prepared, bear in mind that savings is not enough.

What’s your plan B? Put up your own business.

Here’s the thing: starting your own business can be tricky. Check out the most common business questions asked by OFWs and use this as a guide when you decide to start your own business too:

1) What is the best business for OFWs? 

It depends. There is no right or wrong idea when it comes to business. You can start with food carts, or sell your own tried-and-tested recipes, be an Uber or Grab driver, build your own poultry farm, or even star with a sari-sari store.

To help you determine the best business for you, it is imperative that you find out what you are most passionate about. The more you like what you’re doing, the higher the chances of sticking to your business, which equates to growth as well.

You may check this post for some business ideas you can do for additional income.

2) Can I avail of a loan even if I’m abroad? 

Yes and no.

If you are working abroad, you may still apply for a loan through a representative. This chosen representative must have a Special Power of Attorney (SPA) authorizing him/her to transact and process the loan on your behalf. This SPA must be executed and certified in the Philippine Embassy or Consulate where you are located to make it binding.

On the other hand, some lenders require physical appearance to allow you to avail of a loan. They will require you to sign certain documents as the principal lender. Still, it is best to raise this concern directly to your chosen lender to be sure.

3) What if we don’t have an asset we can use as a collateral, what can we do? 

Many lenders, especially banks, require any form of asset to guarantee the loan. It could be your land, house, car, or if allowed, the fruits of your existing business. By offering one of your assets as a collateral, it would give lenders a peace of mind, knowing that they can go after something in case you are unable to pay.

What if you don’t have any asset to offer? You can still avail of a loan by doing any of the two:

• Apply with a co-maker. A co-maker is someone who can help you pay off your loan in case of default, even if he does neither receive nor benefit from the loan. Check this link to know more about the role of a co-maker.
• Go for a non-collateral loan. This type of loan is not backed up by any form of security. Nonetheless, you might pay higher interest rate every month. Read this post  to learn more about this type of loan.

4) How much money can I borrow? 

This depends on your capacity to pay and the collateral you will offer. The higher your income and the higher the value of the assessed property, the higher the amount you can borrow.

Here’s the thing: many OFWs ask for more. For instance, if you are earning P50,000 every month and the assessed value of the property you are offering for collateral is only P300,000, then don’t expect you can get a P1 million loan. Be realistic with the loanable value, otherwise, your application can be rejected.

5) What are the requirements I need to submit? 

This one will depend on the lender. Each lender has its own set of requirements, which you need to comply with in order to proceed with your loan application. This includes:

• Duly accomplished application form provided by the lender
• At least one government-issued ID
• Latest Employment Contract, Certificate of Employment, or POEA Contract for land-based workers or Seaman’s Book for seafarers, whichever is applicable
• At least three months-worth of payslip or any other proof of income
• Marriage contract, if married

Make sure to ask your chosen lender about the requirements needed for your loan application. Submit them completely to speed up the processing of your loan application.

6) Can I use the Business Loan for other purpose? 

Ideally, no. The purpose of business loan is to help you with working capital, in case you are just starting out, or to finance business expansion or to provide additional working capital for those with existing business.

There are specific loan products available according to your needs. Take advantage of those products since lenders treat them differently.

7) I have an existing business. Can I still apply for a business loan? 

Yes. In fact, business loans recognize the possibility of expansion or the need for additional working capital. Even if you have an existing business, you may still apply for a business loan as long as you meet the requirements.

Got more questions? Let us know in the comments section below.

What comes to your mind when you hear the term, “investment?” Oftentimes, most OFWs would think of it as property since the value appreciates. This explains why many OFWs save to purchase their dream home, no matter how small it would be.

Here’s the thing: if you want to buy your dream house, you need to have enough cash to pay for the monthly amortization. Unfortunately, your contract abroad lasts for two years (or three) with a risk of non-renewal. To make sure you can purchase your home, you need to start growing your money and one way to help you with this is by investing in the stock market.

Don’t fret. Here’s every OFW guide on how to invest in the stock market: 

1) Read up and learn everything about the stock market. 

Most people will say this: “I can’t understand how the stock market works.” Fine, but are you making enough effort to at least understand what stocks are?

There are tons of materials available online – articles, Youtube videos, and even blogs dedicated to the stock market. Read up and educate yourself about how it works, techniques and strategies to employ, and the best stocks to buy. Don’t be afraid to ask questions too, because the more informed you are, the better the return will be.

Don’t just limit yourself with learning how the stock market works. Keep in mind that everything is related in the financial and economic world. Keep yourself updated about what’s happening in the Philippines because this could affect the prices of every share.

2) Set aside your budget. 

As a rule, the higher your investment is, the higher the return will be. Nonetheless, you need to consider your earnings since you can’t put all your money in stocks.

You can start with as little as P5,000 and add money eventually to grow your investment. The important thing is you should be able to set aside a budget that you are comfortable with. Just make sure you won’t invest all, otherwise, you might not have enough cash for the rainy days.

3) Choose the right stocks. 

Most people will tell you to invest in blue chip stocks or stocks of big, well-established, and financially-sound companies. In other words, companies that stood the test of time and have been in existence for decades. This includes PLDT, Ayala Corporation, SM Prime, Globe, and San Miguel among others. These companies often give considerate amount of dividends and you are sure that no matter what happens, they will always be standing tall.

Does this mean you shouldn’t invest in non-blue chip stocks? Not necessarily. If you are willing to play it out and want to earn something extra, they are worth the risk. Look into the company’s stocks’ history to help you determine when is the right time to invest and how much you should shell out.

4) Always deal with a licensed firm or broker. 

You cannot directly deposit your investment with Philippine Stock Exchange itself. There are brokers or licensed and legitimate firms that will help you in the trading process. Before you start with your stock market investment, make sure you deal with licensed firms only. Don’t easily believe people who promise higher return in just one week since there is a chance that you are dealing with a fraudster.

Check out this list of licensed online brokers by the PSE. Their online facilities allows you to check, buy and sell stocks, and manipulate your investments even if you are working abroad.

5) Treat the stock market as your business. 

Starting your own business can be difficult and challenging, especially if you are abroad. If you can’t establish your business now, then the stock market can be a good option because it allows you to invest in existing companies.

Think of it as a partnership. You invest in a company and in return, you get dividends. If the price of the stocks increase compared to how much you initially bought it, you get something from it and the earnings are all yours.

So, are you ready to make that investment?

We know how important your hard-earned money is. This is why we always encourage you to save and invest as much as you can because you can never work overseas forever. Aside from savings account, one of the most popular products used by many is Time Deposit.

The question now is this: is time deposit worth it or you’re better off with other investment products? Read on to find out.

But first, what is a time deposit? 

By definition, a time deposit is a type of investment product that allows you to earn interest over a fixed period or term, usually 30, 60, 90, 120, 180, or 380 days and  often higher than your typical savings account. Unlike savings account, you cannot withdraw money from the time deposit. Nonetheless, you are free to withdraw the money, either the entire amount or just the interest earned at the end of the term or renew it for another term (also referred to as roll-over) for higher earnings.

Aside from that, here are other things you need to know about time deposits:

• Interest rate is higher because the pre-specified length of time allowed banks to use the money for re-lending or re-investment.
• Maximum length for time deposit is 360 days, although some lenders introduced longer time deposits, some for up to six years.
• The higher the amount deposited, the higher the interest rate.
• Apart from peso, you can also open a Time Deposit account in other currency like dollar.
• Covered under the Philippine Deposit Insurance Corporation (PDIC) for up to P500,000

Pros and Cons of Getting a Time Deposit 

Pros

• Fixed and higher interest rate for the rest of the term.
• One of the safest types of investment, which is less risky than stocks or property. You can leave it for the rest of the term and you are assured of return and earnings.
• Easy to set up and maintain.
• Interest is paid either by check or deposited straight to your account. You also have the option to re-invest the funds for accumulated earnings and interest.
• You can dictate the term, depending on what is most convenient for you

Cons

• Funds cannot be withdraws until the end of the term. In case of early termination, you will be asked to pay a Pre-Termination Fee.
• In case you availed of interest payment, interest rate might be affected, often lower than the supposed rate offered.
• Since the interest rate is fixed, you won’t be able to benefit from the increase in interest rates.
• Time deposits are not exempt from taxes. 20% final withholding tax on the interest earned and documentary stamp tax will be deducted.

Is time deposit the right one for you? 

The answer is it depends on your financial goals. If you are thinking long-term, say for retirement and you want something less risky, then time deposit can be a good option compared to stocks. You can just withdraw the interest earned and let your money grow. Still, don’t expect bigger return since the rate is dependent on the time deposit amount. If you want to earn more in a short period, then there are other options to consider.

Nonetheless, time deposit can be a good investment, especially if you have cash to spare that you won’t need yet. This could add diversity in your financial portfolio and more importantly, you are sure that your money is safe, sound, and earning.

When it comes to savings account, you will always go for the basic Peso deposit account. That’s okay. It is easier and more convenient to open. At the same time, your family needs peso and making money transfer in a peso account is less hassle for them.

Time and again, we always remind you not to limit yourself to savings account. Despite its convenience, it will not yield higher returns, which could come in handy in case of rainy days. Aside from your usual peso savings account, it is time to consider having a foreign currency deposit account and here’s why:

1) No dormancy fee

Most savings account have no maintaining balance. Still, you are required to make a deposit at least once a year to maintain the account itself.

That is the beauty of having a foreign currency deposit account. It doesn’t matter how long you haven’t made any deposits. Even if it’s two years or eight, no dormancy fee will be charged.

2) Withdraw in peso or dollar

Do you want to preserve your dollar (especially now that the dollar-to-peso exchange rate is high)? Then you can withdraw a portion of your money in peso. There is an option to withdraw in dollar too.

The beauty of having a dollar savings account is that you can make it work for you, especially now (as of this writing) that the dollar-to-peso exchange rate is higher. By the time you or your family withdrew money, you already earned something from it.

3) Diversified savings 

Aside from the “extra” you will earn from the exchange rate, your foreign deposit account will also earn dollars in interest as well. More importantly, this will provide diversity in your savings account and not just limit yourself with peso savings. Keep in mind that dollar is still among the most stable currencies, which you can use anywhere in the world and having one can be beneficial for your financial portfolio.

4) There are tax benefits

Yes, you can never get away from tax, but your foreign currency deposit account can (although not 100% since there is still final withholding tax). All foreign currency deposits, including interest and other earnings from such deposit is  exempt from tax, which is good news. This means more savings for you as well.

5) Easier remittance transactions

Coursing remittances on remittance companies instead of banks are more popular and favorable because of the benefits. Nonetheless, money transfer will be easier if you deposit directly to your foreign currency account through telegraphic transfer. This could cut the processing time, making money reach your family faster.

Before you open a foreign currency deposit account, evaluate first the need and importance of having one. This could be a good move if you plan to use it for retirement, but if the account will be utilized for everyday expenses, then it is more convenient to use a peso savings account.

If you plan to open one, BDO, BPI, Metrobank, Security Bank, and other commercial banks offer Third Currency products.

Time and again, people will always tell you, “Mag-invest ka! Sayang kinikita mo.” That’s true. Earning in dollars allows you to save more than what you can save here, which is why you need to take advantage of the opportunity.

You might say that you have no idea what investments are or how the stock market works. You’re not even sure if you are equipped to invest. You might even ask how and where to start investing. It’s a good thing you stumbled upon this post because this will give you a guide to make you start investing.

1) Always start with a short and long-term goals. 

When do you plan to get a new car? How about a new house for your family? How soon do you want to start with your mini grocery business?

Whatever it is, the first step in investing is to set your goals, both short-term and long-term goals. This will serve as your guide in choosing what type of investment you should go for. At the same time, you have a timeframe that will act as your guide on what to accomplish on the specified date.

2) Explore your investment options. 

Now that you established your goals, it is time to look into the different investment options you can try. Most OFWs invest in a house or car first, only to end up swimming in pool of debt because they are unable to keep up with the monthly amortization.

The opportunities are limitless. You can start with mutual funds or UITF if you prefer earning a little while being safe. These are managed by bank experts so you get to grow your money without risking too much. Stock market or government bonds are also excellent choices to grow your money. If budget already allows, real estate or putting up your own business can help a lot, although this should be your last resort because of the risks involved.

The point is educate yourself about the investments available before you say yes to one. Check out this post to learn about the different investment options available for OFWs.

3) Set budget aside, depending on how much you are willing to risk. 

You have your eyes set on a particular investment option and that’s good. The next step is to set aside a portion of your monthly income to be able to fund your investment and taking into consideration the remittance and daily expenses you have to pay for. Stick to it and you will reap the rewards of your investment in no time.

Bonus: This Financial Planner from the Bangko Sentral ng Pilipinas can be helpful in establishing your budget. You may access it here.

4) Be financially literate. 

The good thing about investing today is that there are tons of information available online that allows you to better understand investment. Read up and educate yourself about various ways to grow your money.

Still, don’t limit it there. While you’re back home, consider attending financial education seminars for you to be better equipped about investments, especially when it comes to risks. The more educated you are, the better you will be in making decisions and identifying what is best for you.

5) Stop spending and start investing. 

Most OFWs have the habit of spending money on material things so that they can send something back home. Even if the items cost less than how much they are priced here, you are still throwing away the potential of growing your money.

To start investing, you need to stop spending. Splurge once in a while, but don’t allocate your entire monthly salary for remittance and pasalubong. Your money won’t grow if you won’t start sowing them.

It doesn’t matter if you invested hundreds of thousands or P5,000. What matters most is that you start early using the investment option that suits you best. After all, every peso counts in every OFW’s life. Be ahead of the rest.

As an OFW, you have the privilege to earn in dollars and earn more than what you can earn here. Still, don’t be complacent. With the rising expenses back home and in the country where you work, it’s not surprising if your monthly salary is unable to cover all of your expenses (including shopping, perhaps). At this point, you might want to consider looking for an extra work for extra income.

Yes, it is possible. The good news is there are tons of business ideas available that allows you to earn additional money. This includes: 

1) Buy and Sell 

You have two options here: you can try buying and selling goods from the Philippines to the country you are in or ship and sell items to from where you are to the Philippines.

The good thing about this business venture is that the possibilities are endless. The market for local products is big because Filipinos will always love the taste of “home.” It could range from native delicacies to toiletries or even food products. If you are on a vacation, fill your suitcase with local goods then sell it as soon as you’re abroad.

On the other hand, there is also a big market back home where Filipinos want to buy something from abroad that is not available here then send it back home.  In short, you sideline as a shopper. Maximize the opportunity and put up your online store or Facebook page to make it easier for your potential customers to contact you.

2) Freelancer

Are you thinking of making use of your downtime? If you have time, consider working freelance like being a babysitter, chaffeur or driver, or an English tutor. If you can bake or cook, use those skills and offer your services at an affordable price. It will definitely give you additional income while working abroad.

3) Be a Blogger 

Did you know that blogging can give you a lot of income opportunities? It will take time, but with the right tools and techniques, you can make money from blogging.

The key here is to choose a topic you are passionate about, say your life as an OFW. This will make it easier for you to write and reach your target audience. Just make sure to update it regularly.

4) Cellphone Loading Station 

Believe it or not, more OFW prefer communicating with their loved ones through call and text. It is easier, faster, accessible, and more convenient than waiting for a decent Internet connection. At the same time, some services such as transferring funds or mobile entertainment requires load. Since there most Filipinos own a cellphone, take advantage of that by putting up your own loading station. It won’t make you a millionaire, but it will definitely help in giving you additional income.

5) Room Rental 

Do you have extra space in your house or unit? You might want to try renting the space – or even a bedspace – to fellow OFWs who are in need of a decent place to stay. This could give you additional income, which you can use for equally important expenses or to help you set up your emergency fund.

These business ideas may not yield millions during the first six months, but it will definitely help you a lot in boosting your savings or giving you something extra in case something happened. Just be patient and committed and who knows, the income you will get from these “small businesses” could lead to something bigger, saying getting your own franchise of a food cart or even in real estate.

Sending money to their respective families in the Philippines will always be part of being an Overseas Filipino Worker. In fact, this is among the biggest considerations why you sought greener pastures. With hundreds of thousands of OFWs, it’s no surprise that banks decided to offer services specifically for OFWs, which includes remittance facility.

Let’s say you don’t have sufficient requirements that will meet the criteria set forth by banks to open an account. You seek help from money transfer companies who require less rigid requirements to be able to send money back home.

Here’s the question: which is better when it comes to money transfer – banks with tried and tested reputation or remittance providers who are more convenient and affordable? Read on to find out.

1) Banks need more information. 

Did you know that not all banks have online wire transfer services? If you plan to remit money through wire transfer, you may be asked to fill out forms to facilitate every transaction. An ID is also required to validate your identity. You can skip this if you opt for remittance providers.

2) An account is required to allow remittances through banks. 

Various banks have Savings Account facilities specifically for OFWs. You can use this account not just for savings but also to transfer money in the Philippines. On the other hand, you cannot avail of this service from banks if you don’t have an account with them. At the same time, banks only transfer to other banks as the receiving end.

Bank transfer is safer, but if you don’t have an account with them, you will have to look into other options such as MoneyGram, Xoom, or Western Union. They allow you to remit money back home even without any form of membership.

3) Remittance providers send money faster than banks. 

If your family back home is in need of money and you want to send it immediately, then you might consider remittance providers. Bank wire transfers take longer to reach the recipient. Alternatively, there are remittance providers like Western Union that allow the recipient to receive the money in minutes.

4) When it comes to smaller transactions, remittance providers are more beneficial. 

If you need to send small amount of money overseas, then remittance providers like Xoom and Western Union can be your best option. You can also avail of bank’s remittance facilities (if you have an account with them), although the exchange rate may be higher.

What if you need to send large amount of money back home? Bank transfer can be an option since it is safer. Nonetheless, you might also want to consider Forex companies since they offer favorable exchange rates at limited to zero costs. At the same time, the higher amount you send, the better the exchange rate will be.

5) Remittance providers have lower exchange rate. 

Remittance providers can be more convenient; however, the exchange rate is generally lower compared to banks.

With these factors in mind, what do you think is the best way to send money back home? The answer is it depends on your needs. If you have an account with a bank that offers remittance facility, then maximize it. If you want to send money transfer, then remittance providers can be your best option, although the remittance fees and currency conversion costs are generally higher.