Passive income in the Philippines: what is realistic

Passive income is money that comes in without your daily work. In practice, every source needs money up front, work up front, or both, and none is free of risk. These are the common sources in the Philippines:

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Government-backed options

Pag-IBIG MP2 is a 5-year savings programme. Its rate is declared each year after the year ends. The declared MP2 rates were 6.00% for 2021, 7.03% for 2022, 7.05% for 2023, 7.10% for 2024 and 7.12% for 2025 (Pag-IBIG Fund). Past rates do not predict future ones. You can choose to have the dividends paid out every year, which turns MP2 into a yearly income. See Pag-IBIG MP2.

Retail Treasury Bonds pay a rate fixed for each issue until they mature. RTB-32, offered in 2026, is a dated example: it pays interest every quarter (RTB-32 FAQ). Each issue has its own rate, term and payment terms. See Retail Treasury Bonds.

Market options

• Dividend stocks pay part of company profits to shareholders, when the board declares it. See dividend stocks.
• REITs own rented buildings and must pay out at least 90% of their distributable income each year as dividends (RA 9856, Sec. 7), but the amount moves with their income. See REITs.
• Funds spread your money across many investments. Some pay out income; others add it to the fund’s value. See mutual funds.

Rental property and small business

These are the least passive. A rental needs a large sum or a loan, then tenants to find, repairs to pay for and rent to collect, often through a relative or an agent if you are abroad. A small business needs your time for years before it might run without you.

Returning OFWs who are OWWA members can get help to start a business from OWWA’s reintegration programme: entrepreneurship training, a business loan through LANDBANK, and cash aid for members who were repatriated, displaced or in distress (OWWA Citizen’s Charter 2026). See OWWA reintegration.

Scams that promise passive income

Some investment scams are pitched as passive income. The SEC lists these red flags (SEC advisory, September 2020):

• No SEC permit to sell investments. Being registered as a company is not enough.
• Returns that sound too good to be true, or that are “guaranteed”, or that promise to double your money.
• Earnings tied to recruiting other people.
• Offers made only on social media, with “PM me for details”.
• Payment to a personal account instead of the company’s.

Investment fraud, including Ponzi schemes, is unlawful under the Financial Products and Services Consumer Protection Act (RA 11765, Secs. 3(f) and 11). The SEC has warned that people who promote or recruit for unregistered investments, including influencers and endorsers, can be criminally liable too (SEC advisory, 21 May 2024). Before you invest, search the SEC’s advisories page for the company’s name.

For all the ways to save and invest, see the investing guide.

This page explains common sources of passive income. It does not recommend any investment, promises no income, and past rates do not predict future ones.