Category Archives: Finance
Home-ownership is a major aspiration for most working Filipinos and their families. However, the majority of people who dream of owning property seldom have enough cash to immediately pay for a house in full. This is why many turn to housing loans for their property purchase.
In the Philippines, it comes down to either turning to the Home Development Mutual Fund (or the Pag-IBIG Fund) or a private lender, mostly commercial or universal banks, for the needed loan.
As you search on printed classifieds or online listings for your future home, it is ideal to know the differences between the two housing loan types available to you, as it not only affects what size of home you can buy and when you can buy it, it also affects your finances for the foreseeable future.
|• Pag-IBIG member for at least 24 months
• Must have completed at least 24 monthly Pag-IBIG contributions (can be paid in a lump sum)
• Must be no more than 60 years of age at time of loan application
• Have no existing loans that are in arears
• Have no existing Pag-IBIG loans that have been cancelled, foreclosed, or bought back.• Be legally able to acquire and encumber real property
|• Borrower must be between the ages of 21 and 65 years old
• Must have tenure of at least two years with present company of employment, or
• Have at least three years’ worth of profitable operation if running a business or practicing profession
• Must meet the minimum monthly gross income set by lending bank (commonly ranges between Php30,000 and Php40,000) per month
When considering applying for a housing loan, the first that comes to mind for most working Filipinos is the Pag-IBIG loan. As it should be, since all full-time employees in the country are required to make monthly Pag-IBIG contributions, and not taking out a loan when needed would make those contributions seem for naught.
The biggest advantage for borrowers when opting for a Pag-IBIG loan is that the requirements are comparatively not as stringent as that of private lending institutions, letting almost anyone who is a member apply. Simply making timely contributions, not being 60 years of age, and having other existing loans, or at least those not in arears, all but guarantees approval for a Pag-IBIG loan.
|• Maximum of Php6 million (can be sum of multiple loans)
• Subject to other qualifiers like the member’s actual need and capacity to pay• Loan amount must not result in a monthly amortization that is 35% of borrower’s total gross salary
|• The minimum offered by banks differ with each, with some like the Bank of the Philippine Islands (BPI) offering as much as 80% of the total price of the property being purchased, as long as the loan does not exceed Php5million.
• The amount can also differ depending on where the property for sale is located, as is the case with banks like Philippine National Bank (PNB), whose loans differ between properties in and outside of Metro Manila.
While a Pag-IBIG loan is more accommodating for low-income borrowers, bank loans have stricter qualifications because they in turn are a more viable option for home-seekers who have pricier properties in mind. Private mortgages like those of BPI’s can cover as much as 80 percent of the total price of a property, as long as the loan does not exceed Php5 million.
In contrast, the Pag-IBIG Fund offers a current maximum of Php6 million via its End-User home financing program, or as a sum of numerous loans as the primary borrower or as a co-signer. Additionally, one does not need to be a depositor or member of the private bank to apply for a loan, or for that matter, make monthly contributions.
|Interest Rate||On June 1, 2015, the Pag-IBIG Fund decreased their interest rates to encourage more members to make use of housing loans:
6.5% – 3-year fixing period
7.27% – 5 years
8.035% – 10 years
8.585% – 20 years
9.05% – 25 years
10% – 30 years
*On July 2016, Pag-IBIG announced their lowest rate ever of 5.5 % per annum
|Some banks, like BDO and Metrobank, offer as low as 5.50% of interest for the first year, which is then subject to re-pricing:
6.25–6.50% – 3-year fixing period
6.88% – 5 years
8–8.5 % – 6–10 years
11.5–12.5% – 16–20 years
|Loan Terms||Often set a median of 15 years, but with a maximum of 30 years.||Generally between 20 and 25 years, but again varies with each bank, and sometimes on the purpose of the loan. PNB, for example, offers maximum loan terms of 20 years for loans used for the purchase of a house and lot, townhouse, condo unit, or for the construction of a house; and only 10 years for loans used for buying a vacant lot or for home improvement.|
Interest and loan terms are significant aspects of home loans, and for many it tends to be the decisive factors of considering what type, and how much, of a loan to apply for. Generally, Pag-IBIG housing loans are more favorable with regard to loan terms, as it provides borrowers a lengthier time to pay versus private bank loans.
While Pag-IBIG housing loans also involve less miscellaneous and processing fees, private bank loans may be the better option when it comes to saving money in the long run. Private loans’ interest rates, due to the constant competition between lenders, have the potential to decrease during the loan period. This is on top of the rates already being competitive at the onset of the loan.
Utilizing either a housing loan from Pag-IBIG or from a private bank remains the most efficient way to become a homeowner, but with a financial decision as significant as buying property, a lot of considerations must be made. While understanding the pros and cons of Pag-IBIG and bank loans through research is beneficial, it is still recommended to consult with loan officers and real estate professionals to reach the most informed decision possible.
Sources: PagIBIGfund.gov.ph, BDO.com.ph, BPIHousingLoans.com, PNB.com.ph, RCBCSavings.com, SecurityBank.com
N.B.: This is a guest contribution from Lamudi.com.ph.
Working freelance can be an envious idea for fixed-time employees. The idea of being on top of your schedule without the need of dragging yourself up every morning to get yourself at the office on time or squeezing yourself on a bus every afternoon rush seems to be a perfect thing. What is even more exciting about this job is that you could schedule your own break, and oversee your house needs while working in your pajamas. You could even take two, three or more jobs at a time if you can, which is very unlikely for a regular job that eats up your time. It is no wonder that more and more regular employees quit their jobs to work freelance.
These are all too good to be true. There is no perfect world as they say. Though what had been mentioned are the good points of working freelance, before you immediately decide to quit your job, weigh the pros and cons of each. One disadvantage is that you will miss the benefits provided to regular employees like the health care benefit.
Paying for your own health care plan should not be taken for granted. If you had previously used the health card provided by your employer in one of the reputable hospitals in the country, you must have an idea on how much you saved. Can you imagine losing that privilege and pay medical bills out of your pocket?
If you don’t want to spend all your earnings from your freelance job better get a healthcare plan. It is not as expensive or as difficult as you think. Here is a list of some of the health insurance providers in the country that you might want to consider.
The following may not be the complete list of the members of the two organizations. This is the list of the members that offer health insurance plan for individual or family members. Some offer group or corporate plans but I have a great feeling that one of these may have what you look for a health care plan. (All price quoted are based on a 30 year old male or female. Premiums differ per age.)
PHILHEALTH (as low as Php 200/month)
This is the government subsidized health care provider. It is more affordable compared to other private plans but does not offer comprehensive package as others do. Check for the benefit coverage it offers so you’ll see if you’d need additional private health care plan.
- It provides room and board subsidy, laboratory exam, and professional fees for confinement of more than 24 hours.
- It also provides out-patient benefits
- It offers special benefit package like treatments for TB, SARS, H1N1 and other special illnesses.
- Some cases classified as non-cost-effective as defined by PhilHealth are subject to approval like optometric services, non prescription drugs and services, fifth obstetrical deliveries and the like.
Blue Cross (as low as Php530/month)
Blue Cross is a member of Association of Health Maintenance Organizations of the Philippines Inc. (AHMOPI) providing medical and travel insurance. The following are good points to consider why to choose this health provider
- It provides maximum coverage limit of up to Php 3,000,000.00 and fully reimbursable on eligible medical bills depending on your insurance coverage
- It allows flexibility by letting you choose your own hospital, clinic or doctor.
- It offers comprehensive coverage
- Medical benefits are extended even when you travel
- 24/7 customer assistance is available for emergency needs
MEDICARD (as low as Php650/month)
This is the HMO usually provided by employers due to low cost of premium. Not too many may be aware that they also offer individual or family health care plan. Make sure to keep a list of the accredited hospital because they will reimburse you only 80% of the expenses not exceeding Php 5,000 if you’d been to non-accredited hospital in emergency cases. The following are the other benefits they offer:
- Hospital confinement
- Out-patient care
- Preventive Health care
- Emergency Care
- Dental Benefits
INSULAR HEALTH CARE (as low as Php1150/month)
This company is part of Insular Life Assurance Inc which has been in business for more than 100 years. It is formerly known as I-Care. Here is the list why you would like to consider this provider
- It offers competitive rate. For the exact premium rate, you might want to check directly with the company because that depends on every individual. To give you an idea, dental benefit costs only Php 336/member/year
- It has built-in life insurance. Being a member of the Insular Life Group, each policyholder is entitled of life insurance benefit depending on the coverage and on the schedule of benefits.
- It does not require PhilHealth membership. They pay 100% of the eligible medical charges.
- Reimburses up to Php 1,000.00 of the prescribed medicines.
- Offers convenience because they are hospital-based.
- They do not require pre-enrollment medical examination.
- Provides free annual physical examination.
SUN LIFE PHILIPPINES(as low as Php1250/month)
Sun Life is not a member of AHMOPI but under direct regulation of the Insurance Commission. Among all the insurance companies operating in the Philippines, it was ranked number 1 in 2013. One of the protections they offer is the Sun First Aid. Here is the list why you will choose this product.
- It has a money back feature that is unique from other insurance policies. They will give back 50% to 75% of the premiums paid after ten years whether the policy holder had been hospitalized or not.
- It offers financial assistance in case of hospitalization. There is cash benefit directly given to the policyholder when confined, if hospitalization exceeds 30days, or if surgery was performed.
- It also offers benefits like those you will find in life insurance policies like, life insurance coverage, waiver of premium in case of disability, and accident rider.
In choosing a health care insurance, it is advisable to choose one that is regulated by the AHMOPI or by the Insurance Commission (IC) itself. AHMOPI is the body that regulates HMO providers in the country. Getting one from a regulated insurance company adds another level of protection to your insurance. The organization will act as mediator between the policy holder and the insurance provider in case of disputes or any irregularities in providing the benefits.
When choosing a health insurance there should always be a perfect mix of quality and quantity. Although you are paying very cheaply in your health insurance make sure that it qualifies to all your bare requirements, such as availability of accredited hospitals or clinics in your area, treatments that you deemed important for your condition and if it will save you from all the headache of following up in your reimbursements because when it comes to health, money can be scarce. So we better make wise decisions!
Editor’s Note: Saving money is good but equipping yourself with the right skills on how to make money especially from a passive income is better. Though I advocate for saving money as much a we can, I’m also promoting the importance of creating multiple streams of income. With the kind of career I have, the risk of being job-less is really high. This is because there’s no such thing as absolute income security in freelancing. You may have lots of clients now but you never knew what will happen tomorrow and the day after that. It’s always better to be prepared and have back-up income sources.
I’ve been really interested to learn how to buy stocks and earn from it. A fellow blogger tried to convince me like a few years ago to attend a seminar about it but I was not in the money-making frame of mind during that time. Now, I regret what I did. I should have attended that training and by now I would have been an expert in buying stocks.
Below is a guest article submission from Eddie Miller, the Chief Editor of BinaryPedia, the world’s leading binary options website.
What is passive income? What are the advantages of passive income? And how does someone make passive income? These are some of the questions that we aim to answer through this article.
Passive Income is a type of income that you make in addition to your day job, where money flows in with very minimal efforts on your part. Some people say that a freelance job is a type of passive income but it is not so, because a passive income job makes money even when you sleep! Unless any of your investments make money through that, they are probably not passive income. The stock market is a goldmine for people looking to earn a passive income. Through this article, we hope to make you better understand the concept behind earning your passive income through the stock market.
Stock market as a means
The stock market is a very viable option to earn a passive income. More and more people have been turning to the stock market so that they can earn an extra incentive on the side. Essentially, the stocks, which are basically the public’s invite to become shareholders in the company are issued when a company goes from being private sector to public sector. Here any member of the general public can buy shares in the stocks of a company.
In return, the company will issue dividends based on the annual income of the company, after retaining expenses. Therefore, the profit earned by the company will be shared among all the stockholders of a company depending on the percentage of stocks bought by each person individually. This means that your stock will be earning a certain amount of dividend every time that the profits of a company are declared. This, as mentioned, is a truly wonderful way to earn a passive income.
Note of Caution
It is also important to note that there might be times when your stocks will not earn dividends because the company might not always be earning a high profit. Also your earning will be highly variable and unstable because of the difference in earning for the company. Make sure to register your share before the record date of any dividend paying share that you might buy, as you might miss out on you dividend for a particular period if you register too late.
Now you know all there is to know about earning a passive income by buying stocks which pay dividends. You should know that like with any other investment, a certain amount of research must be done prior to your investment. Entering any such deal with a blind eye has a heavy potential for loss. The internet will usually help you decide if the company you are investing in has a high profit margin or if they are facing any hiccups. It should also give you an idea of the dividend percentage of the issuing company.
There are many online tutorials and tips that will help you with the same.
About the Guest Author
This post is written by Eddie Miller, a blogger, technologist, trader and the Man Behind BinaryPedia.com.
Photo above is used under Creative Commons License. Credit.
Note from the blog’s owner: Since I’m using both credit cards, I am allowing a guest post from www.businesscreditcards.com to be featured here in my blog. If you are planning to apply for a credit card account and would like to check which company is better, you may read first Eliza’s review about HSBC and Metrobank credit cards. – Empress Of Drac
Photo Credit: 401(K) 2012
Choosing the right credit card can be a bit tedious. Credit cards nowadays have so many features that vary from bank to bank, from provider to provider. Interest rates, rewards, special offers, and spending limits are just a few of the factors that a consumer should consider when they start searching for the perfect credit card that fits their financial needs. There’s a lot a stake with a credit card: choosing the right one can have a huge impact on your savings and spending habits.
I’d like to discuss credit cards available from two banks in particular, HSBC and Metrobank, each of which have tempting features for every type of customer. Let’s take a look at what each bank has to offer.
What you get from a credit card from HSBC?
HSBC is a bank operating on a worldwide scale. As such, it has a lot to offer for potential credit card owners. As part of a special introduction deal, people who sign up for a credit card through HSBC will enjoy a 3 month period without any interest incurred on purchases. After the initial 3 months have passed, cardholders will be responsible for a 17.9% APR variable on the subsequent balances from their purchases. There’s no annual fee for having a credit card with HSBC, so that’s good news.
HSBC offers a number of incentives that will appeal to the web-savvy consumer. A person with an HSBC credit card can view their balance and payment history online, making managing finances online easy and safe. Cardholders can even transfer balances between accounts with HSBC for nearly two years if they need to move money around. The bank also offers special holiday deals for its cardholders, including discounts at select stores and with certain online services, and even more discounts when you travel internationally.
What you get from a credit card from Metrobank?
Metrobank also has enticing features for their credit cards. Unlike the HSBC credit cards, Metrobank offers a variety of credit cards that suit specific lifestyles and financial habits. I’m going to examine the Metrobank Classic/Gold cards, as they appear to be among the more popular cards the bank offers to its customers.
The Metrobank Classic/Gold cards require an annual fee (Php1, 400 for Classic, Php2, 500 for Gold), but that fee is waived for the first year. Metrobank charges a monthly finance fee of 3.5% of the balance on the cards, and the cards require a minimum gross annual income which changes depending on whether you get the Classic or Gold model. Cardholders can view their payment history and pay balances through Metrobank mobile apps and online banking services.
The upside to the Metrobank Classic/Gold cards is that both operate with a built-in rewards system. Specifically, cardholders get one point for every Php20 spent, and they can use those points on anything from travel to dining out. Cardholders can spend their Metrobank card points to get cheaper flights, hotel prices, and meals at any number of destinations. It’s definitely a great card for traveling consumers!
Which is better?
It’s hard to say which card is better, as both have their own pros and cons. HSBC credit cards don’t have an annual fee and their interest’s rates are fairly low, but it doesn’t seem like they have a well-established rewards system. Metrobank cards have higher fees and tighter restrictions, but they have a great rewards system, particularly for people who want to travel and spend their money on luxury items.
Which card looks more enticing to you?
About the Guest Author
This is a guest post by Rick Murphy, a finance expert writer.
If you are frantically looking for money saving ideas on Google and reading this article intently, this means finally realization has dawn on you and you are planning to create a strong savings plan. No matter why you like to save, for an emergency requirement or for a lavish holiday or for debt help, a strong saving certainly will help you restore your peace of mind and make you feel relieved. If you are looking for some easy ways of cutting your cost, the following points can help you out. Save more and ensure your financial freedom in the best possible way.
Save on grocery
You can save a lot, provided you start planning your meals for a week, beforehand. Start shopping in bulk and store stuffs in order to avoid wastage. Most of the grocery stores distribute weekly fliers, which clearly show the sale items and special items for the week. You can arrange for your family meal quite easily with least cost, by taking advantage of these discounted goods. Be methodical and disciplined and save thousands on your yearly grocery expenses.
If you are passionate about latest hairstyles and invest a lot to get your hair trimmed and stylized from a fancy salon and grooming services, then bills must burning a hole in your pocket. In order to reduce these unnecessary expenses, discard those expensive salons and start going to a beauty school. Beauty schools generally charge much lower rates for their services and offer quality service to the customers. Only the experienced students about to finish their degree course are allowed to serve the customers. These kids provide services like a professional but charge almost half of a professional’s fees.
Save the spare changes
In most cases, people just ignore the value of spared changes and keep them here and there casually. However, if you are a little organized and save those changes in a change jar, it can add value to your savings. Wait for at least six months and once the jar is filled, trade the coins in for cash. Make sure you save these amounts for a secure future.
Instead of wasting money on buying clothes from shopping mall or branded store, start visiting the consignment stores near to your locality. Consignment stores usually contain used clothes. Thanks to the consignment shops you can now wear clothes of renowned designers and at the same time save up to 80 percent on your clothing budget.
As soon as you get away with the addiction of drinking coffee or soda, you will be able to save both your health and money. Rather consider buying water filter, which is worth paying for.
If you use a thermostat, make sure you buy a programmable thermostat, which has the flexibility of regulating the temperature of your home time to time. By switching it on and off at the specific time, you can minimize the expense that you incur by leaving the thermostat on all day. Using this system will help you save more on your utility bills and energy bills.
Keep the aforementioned points in mind and save more to secure a better financial future.
About the Guest Author
Rick Murphy is a contributory writer associated with debtconsolidationcare.com. He holds his expertise in the Debt industry and has made significant contributions through his various articles.