Filipinos are known for their hardworking nature, and many are constantly looking for ways to supplement their earnings. While having a full-time job can provide a stable source of income, it may not always be enough to cover all expenses or save up for long-term goals. This is where passive income streams come in, providing an opportunity to earn money on the side without sacrificing too much time or effort.
Passive income refers to earnings that are generated with minimal effort, and it can come from a variety of sources such as investments, rental properties, or online businesses. With the rise of the internet and the gig economy, there are now more opportunities for Filipinos to earn passive income than ever before. However, it's important to note that earning passive income still requires a significant amount of upfront effort and dedication.
In this blog post, we will explore the top best sources of passive income for Filipinos who are looking to earn more money. Please note that I am not a financial advisor or an expert in the finance industry in the Philippines. This blog post is for information purpose only and based on my personal research. But by the end of this post, I hope readers will have a better understanding of the different options available and be able to choose a passive income stream that suits their interests, skills, and financial goals.
1. Real Estate - Investing in real estate is one of the most popular passive income streams in the Philippines. You can buy rental properties, condominium units, or invest in real estate investment trusts (REITs) to earn a steady stream of rental income and capital gains. According to the Bangko Sentral ng Pilipinas (BSP), the residential real estate sector in the Philippines has been growing steadily over the years, with a 10.8% increase in residential real estate loans in 2020 compared to 2019. REITs have also become a popular investment vehicle for Filipinos, with the launch of the country's first-ever REIT in 2020.
HOW:
- Educate yourself on real estate investing by reading books, attending seminars or workshops, or seeking advice from experienced real estate investors.
- Determine your investment goals and budget.
- Research potential rental properties, condominium units, or REITs.
- Conduct due diligence by inspecting the property, checking for any legal or financial issues, and estimating rental income and expenses.
- If buying a property, secure financing and negotiate a favorable deal.
- If investing in REITs, research and choose a reputable REIT that aligns with your investment goals.
- Hire a property manager or manage the property yourself to ensure smooth operation and maximum rental income.
2. Dividend Stocks - Many companies in the Philippines pay out dividends to their shareholders, providing a reliable source of passive income over the long term. According to a report by the Philippine Stock Exchange (PSE), the total cash dividends paid out by listed companies in 2020 amounted to PHP 185.38 billion, a 22.2% increase from the previous year. The report also revealed that dividend-paying companies outperformed non-dividend paying companies in terms of stock price performance.
HOW:
- Open a brokerage account with a reputable stockbroker.
- Conduct research on dividend-paying companies and their stock performance.
- Invest in dividend-paying stocks that align with your investment goals and risk tolerance.
- Monitor your portfolio regularly to ensure its performance and make necessary adjustments.
- Mutual Funds and UITFs:
- Choose a reputable bank or financial institution that offers mutual funds and UITFs.
- Determine your investment goals and risk tolerance.
- Choose a mutual fund or UITF that aligns with your investment goals and risk tolerance.
- Invest a fixed amount regularly or lump sum.
- Monitor your investment regularly and make necessary adjustments as needed.
3. Mutual Funds and Unit Investment Trust Funds (UITFs) - Investing in mutual funds and UITFs is an easy and convenient way to earn passive income in the Philippines. You can invest in a diversified portfolio of stocks and bonds managed by professional fund managers, who will handle the buying and selling of investments on your behalf. According to a report by the Investment Company Association of the Philippines (ICAP), the net asset value of mutual funds and UITFs in the Philippines reached PHP 2.55 trillion in 2020, a 12.1% increase from the previous year.
HOW:
- Choose a reputable bank or financial institution that offers mutual funds and UITFs.
- Determine your investment goals and risk tolerance.
- Choose a mutual fund or UITF that aligns with your investment goals and risk tolerance.
- Invest a fixed amount regularly or lump sum.
- Monitor your investment regularly and make necessary adjustments as needed.
4. Bonds - Investing in bonds is another popular passive income stream in the Philippines. You can invest in government or corporate bonds, which pay regular interest payments over a specified period. According to the Bureau of the Treasury, the Philippine government raised PHP 1.36 trillion from its bond issuances in 2020, a 39% increase from the previous year.
HOW:
- Determine your investment goals and risk tolerance.
- Research government or corporate bonds and their interest rates and terms.
- Choose a bond that aligns with your investment goals and risk tolerance.
- Invest in the bond and receive regular interest payments over the bond term.
- Monitor your investment regularly and make necessary adjustments as needed.
5. Peer-to-Peer Lending - Lending money to individuals or businesses through online platforms like FundKo or Blend PH can provide an attractive interest rate and a relatively low risk of default. According to a report by the Securities and Exchange Commission (SEC), the total amount of peer-to-peer lending transactions in the Philippines reached PHP 8.53 billion in 2020, a 144% increase from the previous year.
HOW:
- Choose a reputable P2P lending platform.
- Determine your investment goals and risk tolerance.
- Research potential borrowers and their creditworthiness.
- Invest in loans that align with your investment goals and risk tolerance.
- Monitor your investment regularly and make necessary adjustments as needed.
6. E-Commerce - Selling products online through platforms like Lazada, Shopee, or Amazon can provide a passive income stream, especially if you use dropshipping or affiliate marketing. According to a report by iPrice Group, the e-commerce industry in the Philippines grew by 57% in 2020, with Lazada and Shopee being the top e-commerce platforms in the country. The report also revealed that the pandemic has accelerated the growth of e-commerce in the Philippines, as more consumers have turned to online shopping.
HOW:
- Choose a reputable e-commerce platform to sell your products.
- Research the market and choose products that have high demand and potential profit margin.
- Determine your marketing and advertising strategies.
- Launch your online store and promote your products.
- Monitor your sales and make necessary adjustments to improve performance.
7. Rental Businesses - Aside from real estate, you can also earn passive income by renting out equipment, vehicles, or even storage spaces. According to a report by the Department of Trade and Industry, the equipment rental industry in the Philippines has been growing steadily over the years, with a 15.4% increase in revenue in 2019 compared to the previous year.
HOW:
- Determine the type of rental business you want to pursue.
- Research the market demand and potential profit margin.
- Invest in equipment, vehicles, or storage spaces to rent out.
- Advertise your rental business and acquire clients.
- Monitor your rental income and make necessary adjustments to improve performance.
8. Online Courses and Digital Products - Creating and selling online courses, ebooks, or digital products can provide a passive income stream with minimal overhead costs. According to a report by Statista, the e-learning market in the Philippines is expected to reach USD 728 million by 2026, driven by the increasing demand for distance education and upskilling.
HOW:
- Determine your area of expertise and the type of digital product you want to create.
- Create high-quality content and package it into an online course or digital product.
- Choose a reputable platform to sell your product, such as Udemy, Skillshare, or Amazon.
- Promote your product through social media, email marketing, or paid advertising.
- Monitor your sales and make necessary adjustments to improve performance.
9. Royalties - If you're a creative person, you can earn passive income by licensing your music, videos, or books. According to a report by the Intellectual Property Office of the Philippines, the total number of registered copyrights in the Philippines reached 35,290 in 2019, with music being the most registered type of copyright.
HOW:
- Create original creative work, such as music, videos, or books.
- Register your work with the Intellectual Property Office of the Philippines.
- License your work to businesses or individuals for a fee.
- Monitor your royalties and make necessary adjustments to improve performance.
10. Cryptocurrency - Investing in cryptocurrencies like Bitcoin, Ethereum, or Dogecoin can provide a potential source of passive income, although it comes with a higher risk. According to a report by Chainalysis, the Philippines is one of the fastest-growing markets for cryptocurrency adoption in Southeast Asia, with a 14% increase in cryptocurrency adoption in 2020 compared to the previous year.
HOW:
- Educate yourself on cryptocurrency investing by reading books, attending seminars or workshops, or seeking advice from experienced investors.
- Determine your investment goals and risk tolerance.
- Research potential cryptocurrencies and their performance and potential risks.
- Open a cryptocurrency trading account with a reputable exchange.
- Invest in cryptocurrencies that align with your investment goals and risk tolerance.
In conclusion, there are various passive income streams that Filipinos can explore to supplement their earnings. These opportunities range from investing in the stock market, real estate, and cryptocurrencies to creating online courses or e-books. The key to earning a passive income is to find a suitable opportunity that aligns with your interests, skills, and financial goals.
It's worth noting that earning passive income requires a significant amount of effort and dedication upfront. However, once you have established your income streams, they can generate a steady stream of income with minimal effort. With the growing opportunities available in the Philippines, there has never been a better time for Filipinos to start earning passive income and achieve financial stability.