Got Your 13th Month Pay? Here Are Investment Ideas Under P5,000

Let's be honest, Christmas isn't the only thing we look forward to at the end of the year. There's the 13th month pay, too! Presidential Decree 851 stipulates that all employers in the private sector must annually pay their rank-and-file employees a 13th month pay on or before Dec. 24, which should not be less than one-twelfth of the total basic salary earned by the employee.

As you wait for your 13th month pay, you're probably already thinking of all the things you can spend it on. While we find ourselves in the "treat yo self" camp, we're also believers of responsible spending and making one's hard-earned money work for oneself. Before you check out your carts this holiday season, here are some investment ideas below P5,000 that you can consider instead once you receive your 13th month pay!

Mutual Funds

Forget the idea that you must be loaded with millions to be able to invest your money. Mutual funds are suitable for newbie investors who wish to generate passive income on the side for retirement, children's education, or whatever financial goal they may have in the future. For the unknowing, a mutual fund is a firm that puts together the funds of individuals in one asset base, which is diversified into security investments by a fund manager. Stock, balanced, bond, and money market funds are four types of mutual funds in the country.

No, you won't turn into a millionaire overnight, but a mutual fund is a good way to get your feet wet in investing due to its small minimum initial investment amount that makes it feasible for the majority. In the Philippines, most mutual funds only ask for a minimum investment of P5,000 and minimum additional investments of P1,000.

Go here for the Securities and Exchange Commission's list of registered investment companies and mutual funds, as of September 2020.

Cropital

Why not consider growing your money and helping Filipino farmers at the same time? Cropital is a crowdfunding platform that's committed to improving the income and the lives of farmers by connecting them to the world. To be part of the mission, you must sign up and register on Cropital so you can choose from curated farms you're interested in. 

You can invest immediately or pledge first, with minimum investments per farm at P5,000. When a farm is fully funded, the farmers will be given the resources they require for farming to ensure their production is improved. When crops are harvested and produce is sold, those who invested will get their capital back as well as the profit shared in their Cropital virtual wallet. To learn more about this initiative, go here.

SSS Peso Fund

If you're a member of the Social Security System (SSS) and want to support your retirement, you can also check out the SSS Personal Equity and Savings Option (P.E.S.O.) Fund, a voluntary provident fund for members that is separate from the regular SSS program. The program allows members to save more of their wealth through tax-free earnings and benefits; contributions in sovereign guaranteed investments; and guaranteed earnings. 

Members' contributions will be placed in three account types, mainly retirement/disability, medical, and general purpose (education, housing, livelihood, and unemployment). Every member is allowed a minimum amount of P1,000 per contribution and it can be made anytime; P100,000 is the maximum contribution per annum.

Modified Pag-IBIG 2 (MP2) Savings Program

The MP2 is a special voluntary savings program for active Pag-IBIG Fund members who want to save more money and earn bigger tax-free dividends. The program has a five-year maturity and can earn more dividends than the Pag-IBIG Regular Savings. Moreover, members only need to make a minimum of P500 per remittance, which can be done over the counter at any Pag-IBIG Fund branch or via online payment channels like GCash, PayMaya, Coins.ph via Bayad, and the Moneygment App via Cashpinas.

Under the MP2, the Pag-IBIG Fund allocates at least 70% of its annual net income and credits it to members as dividends. It makes investments in housing finance, as well as government securities and corporate bonds. Annual dividends are government-guaranteed, and dividends shall depend on the financial performance of the fund. You may withdraw your MP2 savings fully after its five-year maturity period via Virtual Pag-IBIG or over the counter. Learn more about the MP2 Savings Program here.