Saving while you work abroad: a plain order to follow

The order, in short

1. Keep a cash buffer. Money you can reach in days if your contract ends early or a bill lands at home. It comes first because everything else on this list is harder to get out quickly.
2. Keep SSS, Pag-IBIG and PhilHealth paid. These are the base of your pension, your housing and your health cover at home. Gaps are hard to fill later.
3. Add voluntary savings the government runs, such as Pag-IBIG MP2 or a PERA account, once the first two are steady.
4. Plan for your end-of-service pay. In the Gulf and some other countries, a lump sum comes when your contract ends. Decide what it is for before it arrives.

This is a general order, not advice for your situation. Your contract, your family and your debts change what makes sense.

Your emergency fund first

There is no official number of months. Count the months you would need to cover if your pay stopped: your costs abroad, the money you send home, and one-off costs such as a flight home. Keep it where you can reach it within days. The emergency fund calculator works out a target from your own figures.

If you come home repatriated, displaced or in distress, OWWA gives members a livelihood cash grant of PHP 5,000 to PHP 20,000, depending on your membership (OWWA Citizen’s Charter 2026, item 10). It helps, but it is not a fund to live on. See OWWA reintegration.

Keep your Philippine contributions going

SSS is compulsory for OFWs who are not over 60. Land-based OFWs pay the whole contribution themselves, under SSS Circular 2024-010:

Rate

15% of your salary credit

Monthly salary credit

PHP 8,000 to 35,000

Monthly contribution

PHP 1,200.00 to 5,250.00

You pay January to September by 31 December of the same year, and October to December by 31 January of the following year (SSS land-based OFW page). See how land-based OFWs pay SSS. The SSS guide for OFWs covers the pension and benefits.

Pag-IBIG and PhilHealth have their own rules for members abroad. See the Pag-IBIG guide and the PhilHealth guide.

Amounts are in Philippine pesos. If you pay from abroad, your bank or app converts at its own rate on the day.

Voluntary savings the government runs

Pag-IBIG MP2 is a voluntary savings account for Pag-IBIG members. It runs for 5 years from your first payment, and each payment is at least PHP 500 (Pag-IBIG Circular No. 487). The return is declared each year. Past rates on Pag-IBIG’s MP2 page:

2021

6.00%

2022

7.03%

2023

7.05%

2024

7.10%

2025

7.12%

Past rates do not tell you what future rates will be. Read the MP2 guide before you open one.

PERA (Personal Equity and Retirement Account) is a retirement account under RA 9505. The BSP’s PERA FAQ (as of 31 August 2023) gives:

• a yearly tax credit limit of PHP 400,000 for overseas Filipinos, against PHP 200,000 for people employed in the Philippines (you can put in more, but the excess earns no credit),
• a 5% tax credit on what you put in, and
• tax-free withdrawal from age 55 after at least 5 years of contributions.

See how PERA works.

Neither MP2 nor PERA is right for everyone, and we do not recommend one over the other.

Your end-of-service pay and foreign pension

Many host countries pay a lump sum when your contract ends, or keep a pension account for you. What to check before you leave:

• Your contract. What it says about end-of-service pay, and which law it follows.
• Which wage counts. In the UAE, gratuity is worked out on your basic wage, without allowances (Article 51(2)). Other countries’ laws may use a different wage, so check which one yours uses and find that line on your payslip.
• Unpaid days. In the UAE, unpaid absence is not counted as service (Article 51(4)).
• Any pension or savings account in the country, and how to claim it once you have left.

In the UAE, a full-time private-sector worker with a year or more of service gets 21 days of basic wage for each of the first 5 years and 30 days for each year after, up to two years’ wage (Federal Decree-Law No. 33 of 2021, Article 51). The UAE gratuity calculator works it out line by line.

Working in Saudi Arabia? See the Saudi end of service calculator.

Sending money home without losing it to fees

Every transfer has two costs: the fee you see, and the exchange-rate margin, which is the gap between the rate you are given and the market rate on the day. A transfer with no fee can still cost you through a weaker rate. Compare the amount that arrives in pesos, not the fee alone. See sending money home for a worked example.

Country guides

We are writing a guide for each of these countries: the United Arab Emirates, Saudi Arabia, Hong Kong, Singapore, Qatar, Kuwait, Japan, Taiwan, Italy, the United States, Canada and the United Kingdom. Each one covers how OFWs there pay SSS, Pag-IBIG and PhilHealth, the local end-of-service or pension rules, the Philippine Embassy or Migrant Workers Office contacts, and the time difference for calls home. Until yours is up, the OFW guides and the SSS guide for OFWs cover what applies in every country.

How much you will need

The OFW retirement calculator estimates what you would need to retire in the Philippines, in pesos and in the currency you earn. It gives an estimate only. For the bigger picture, see planning your retirement. For papers and OWWA, see the OFW guides, and if you need to borrow, the government OFW loans.