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Best Government Investment Options For OFWs

Updated on May 26, 2020
OFW Investments

In this blog, we will identify some of the best investment options for overseas Filipino workers (OFWs) backed by the government. If you want your finances to last even after your overseas stint, consider putting some money in these government-backed investment portfolios and savings programs.

For most land and sea-based OFW, the job order is not forever. This means maximizing every opportunity presented and making sure every peso is spent wisely for a higher return is a must. For the savvy overseas workers, they will both take care of their family’s immediate needs and put away some for future use. Whether it’s an investment or a business after repatriation, every OFW should have long-term goals to plan for their finances for a better retirement plan. 

This is the same reason why government corporations such as the Home Development Mutual Fund (more commonly known as Pag-IBIG Fund) and the Social Security System (SSS) created savings and investment programs for OFWs. If you want to make sure your money goes to something beneficial in the long run, consider investing in these government-backed programs that go beyond your usual monthly contributions.

SSS Flexi Fund

Specifically tailored for OFWs, the SSS Flexi Fund is a convenient way you can invest in your future without the pains of actively watching where your investments go. With this, you can pay them a certain amount of money any time of the year—regardless of where you are—and you’re guaranteed with returns no matter how much you invest.

How does the Flexi Fund work?

The SSS will pool all the money it can get from voluntary investors and use them to buy T-bills or short-term fixed-income treasury bills from the government. Since it is backed by the government, the returns are guaranteed and the risks are low. Once the yields are paid out, everyone who pitches in money will get their share depending on the market rates of the treasury bills.

How to benefit from the SSS Flexi Fund? 



Withdraw your account before its maturity but you will incur penalties for pre-termination

Get annual incentives for account holders who did not touch their money for a year

Receive lump sum or pension benefits in case of retirement, disability, or death

Keep in mind that this is on top of your mandatory contributions to the SSS. If you want to accelerate your savings, you can go to the SSS website, download the form, and fill it out. Along with your overseas employment certificate, you can submit your form to the SSS representative in your country of employment.

Once your account has been successfully created, you can begin with the process of voluntarily putting money there. You can choose which T-bill type will be linked to your account: 91-day, 182-day, and 364-day treasury bills.

In 2019, the following interest rates for T-bills have been posted by the Philippine Bureau of Treasury:

  • 91 day T-bills - 4.674%
  • 182 day T-bills -  5.065%
  • 364 day T-bills - 5.232% 

For comparison, the best savings accounts in the Philippines give you an interest rate of less than 2%.

SSS PERA Fund

In 2017, the SSS opened its much-awaited voluntary retirement program that amps up your gains when you finally reach your golden years.

The SSS Peso Equity Retirement Account (PERA) is a voluntary mutual fund that’s managed by the government—but there’s a catch. For this investment product, you can only get the yield of your account when you reach 55 years old.

The PERA Fund works just like any other mutual fund: you put your money in your account, pick the investment vehicle for your money, and wait for it to grow. Normal workers can only pour as much as P100,000 on their accounts. However, OFWs can greatly benefit from this because they have a cap that’s twice the size of that.

To start with your PERA Fund journey, you can go to the two accredited administrators of the program, namely Banco de Oro (BDO) and Bank of the Philippine Islands (BPI). Ask about their PERA Fund account and they will assist you in opening one. 

How to open a PERA Fund account? 

Step 1: Visit your administrator of choice between BDO and BPI to open your account

Step 2: Give your complete information and provide all required documents 

Step 3: Once all requirements are submitted, your PERA account will be activated.

Once you’ve created your account, as an OFW you can fund it as long as you don’t exceed P200,000 per account. Funds allocated in a PERA account are further invested in mutual funds, stock markets, insurance products, various types of government securities, etc. Depending on your risk tolerance or appetite, you can diversify and open up to five PERA accounts per administrator. 

List of PERA funds you can choose from: 

  1. BDO PERA Short Term Fund
  2. BDO PERA Bond Index Fund
  3. BDO PERA Equity Index Fund
  4. BPI PERA Money Market Fund
  5. BPI PERA Equity Fund
  6. BPI PERA Corporate Income Fund
  7. BPI PERA Government Fund

To open a PERA FUND account, you can open your account using the following documents:

  • Marriage certificate (for spouse opening your account)
  • Birth certificate (for child opening your account)
  • Notarized letter of authority granting your spouse or child to open a PERA Fund account on your behalf
  • Overseas employment certificate
  • Proof of income

Tax benefits of PERA

  • Earnings on PERA investment are free from tax
  • Withdrawals and distributions are exempted from tax
  • Distributions to beneficiaries are free from estate tax

Aside from the tax-free benefits when you reach 55 years old, you are also subject to 5 percent tax credit for maximum advantages.

Pag-IBIG Fund MP2 Program

Your Pag-IBIG Fund contributions can come in handy when you finally want to get your own home. However, you can make the most out of your account thereby investing in a five-year vehicle of the fund called the Modified Pag-IBIG II (MP2) Program.

Unlike your normal contribution which is made mandatory, the MP2 serves as a more advanced savings program that will last for five years. Think of it as a time-deposit account but with better yield. What’s better about this is that the returns are guaranteed and you can be sure that you will get something when your account matures.

On average, an MP2 account grows by 7.5 percent annually, which is compounded. For instance, if you invest 500 PHP per month, you can up to 36,266.14 PHP by the end of five years—and the dividends are tax-free! You can either pay monthly or just make a one-time investment and just wait for your money to grow.

To start with your Pag-IBIG MP2 investment, go to the agency’s website and look for the MP2 section. Once you’ve enrolled your account number for the program, you can choose how much money you want to put in your MP2 account every month for the next five years. When your account matures, you can either pull out your cash along with the interest or keep the money and wait for another five years for better yields. 
For the OFWs in the US, PERA is similar to 401k in the US. It offers tax advantages as an incentive to save money for retirement. If you are sending money to the Philippines for investment, here are our top tips to find the best ways to send money to the Philippines.

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