Overseas Filipino Workers (OFWs) are considered the Philippines’ modern-day heroes because of their significant contributions to the growth of the economy. The country benefits from the generous remittances sent by OFWs. In 2019, remittances accounted for 9.3% of the gross domestic product and 7.8% of the gross national income.
Despite their contribution to the economy and their own families, though, OFWs struggle to build their own retirement fund. Many OFWs find saving for the future while supporting their loved ones difficult. In fact, statistics show that only 1 in every 3 OFWs set aside funds to save from their cash remittances.
Fortunately, there are several investment opportunities available where they can put their hard-earned money to work and make their dreams of a secure future a reality.
OFWs can now participate in stocks in the Philippine Stock Exchange (PSE) even when they’re abroad. Some stockbrokers can accommodate OFWs and help them set up an account. Investing in the stock market may seem intimidating and risky for new investors. However, buying stocks from companies with a long-term horizon can help you mitigate the risk and survive the market volatility.
Moreover, buying and selling stocks can be done online, and you can add funds into your account via electronic transfers and remittance services, making it more convenient and easy for OFWs.
Before you dip your toes in the stock market, know that growing your money in stocks requires some patience to learn how to play the market and see your capital grow. The more you understand how the market works, the better you can plan things.
- Mutual Funds and UITFs
Mutual funds and Unit Investment Trust Funds (UITFs) work identically. Investors participate in funds and then earn a profit based on their performance. The main difference between the two is investors buy shares with mutual funds, while units with UITFs. Another key distinction is that banks manage UITFs, while professional fund managers grow your money with mutual funds.
Investing in mutual funds and UITFs doesn’t require too much work since a professional can take care of the business. If you already have a Philippine bank account, you can ask for assistance from them to open a UITF investment account.
You can also check your bank’s website for alternative options to open one without the need to visit your branch. On the other hand, there are mutual fund companies that can help OFWs get started with it, such as COL Financial.
If you’re looking for something low to moderate-risk investment options than stocks but have relatively higher interest rates than cash deposit accounts, consider bond investments. They serve as excellent alternatives to time deposits.
This type of investment is provided by large corporations and the government (retail treasury bonds) to raise funds by pooling investments from investors. Bonds have fixed maturity dates. Check the website or ask your Philippine-based bank if they sell bonds that you can invest in.
- VUL insurance + investment
A Variable Universal Life Insurance (VUL) investment is a type of cash-value life insurance plan that sets aside a portion of the premium to be invested, which can earn high returns. With a VUL insurance, you get to hit two birds with one stone—life insurance and investment. This is ideal for OFWs who have no life insurance yet and are shopping around for one.
You can look into traditional life insurance plans or consider playing in the global market with Dollar Protect Plus insurance. It comes with an investment plan, and OFWs don’t have to convert into pesos since it’s a U.S. dollar-denominated savings.
OFWs are eligible for a VUL plan as long as their application is signed in the Philippines.
- Pag-IBIG MP2 Savings
OFWs are eligible to apply for the Modified Pag-IBIG Savings II (MP2) program in addition to their regular Pag-IBIG savings. It’s a five-year voluntary savings plan that offers great annual dividends earnings with rates higher than time deposits. What’s also good about MP2 is that it’s tax-free and supported by the government.
OFWs interested in opening an MP2 account can do so online. Your relatives can pay on your behalf at any Pag-IBIG branch, or you can do it yourself at their overseas remittance partners.
- Real Estate
Often, OFWs turn to real estate investments like house and lot, land, or condominium units. It might be because of the satisfaction of calling the property theirs or having a visual representation of their sacrifices. A survey shows that around 80% of OFWs in the UAE are considering buying a property in the Philippines.
Investing in the property market is one of the fastest and safest ways to boost their wealth. They can either have the property rented out or sell in when the value appreciation is up.
Business investments can build enough cash flow that can match or exceed your OFW income. It’s one of the best options if you’re thinking about returning home and sustaining your family here.
You can put up your own business in the Philippines while you’re working abroad by entrusting it with your spouse or a reliable family member. Starting a business isn’t as challenging as before since you can run a business entirely online these days. Alternatively, you can consider franchising a food business from an established brand.
These days, investing isn’t as out-of-reach as it used to be for Overseas Filipino Workers. You can now grow your hard-earned money through accessible ways like the ones above and build something for themselves and a comfortable future.
Remember to consider your investment objectives, risk tolerance, and diversify your investments to manage them properly. Schedule an appointment with our Bancassurance Sales Executives to get started on your investing journey today.