15 Best Ways to Earn Passive Income in the Philippines

Times are changing— income is going down, and expenses are going up. Accordingly, more people are looking for passive income ideas, especially in the Philippines. For Filipinos looking to amplify their earnings and inch closer to financial freedom, passive income offers a promising avenue. But what exactly is passive income? 

And what are its various forms, especially in the Philippines? This guide provides insights into passive income tailored specifically for Filipinos.

What is Passive Income?

Passive income is money earned with minimal to no daily effort to maintain it. Unlike active income, where you trade time for money—like in a 9-to-5 job—passive income is typically derived from ventures that require an initial investment (either of money or time) and subsequently generate returns without constant intervention.

In simpler terms, imagine planting a seed (your initial investment) and watching it grow over time. While it may need occasional watering and tending, it largely grows by itself, providing fruits (returns) over the long term. This concept, when applied to the financial realm, is what passive income is all about.

The Kinds of Passive Income You Can Earn

When dissecting the vast world of passive income, it’s important to understand its myriad forms, especially in the Philippine context. Broadly, passive income can be classified into three categories:

• Traditional Passive Income Tools: These are your classic financial instruments. They’ve been around for a while and are well-established in the Philippine investment landscape. This category includes investments like dividend-earning stocks, treasury bonds, mutual funds, Pag-IBIG MP2, UITFs, and Variable Universal Life insurance (VUL).
• Online Passive Income Ideas: The digital age has unlocked many opportunities for Filipinos to earn passively. With the growth of internet penetration and the popularity of online platforms, avenues like affiliate marketing, selling online courses, blogging, print-on-demand businesses, and e-commerce have become increasingly viable. They often require an upfront effort, like creating content or setting up a platform, but can yield returns with minimal ongoing effort.
• Passive Rental Income Ideas: Real estate and tangible assets form the backbone of this category. While the Philippines is known for its beautiful landscapes and bustling cities, it also offers opportunities for passive income through rentals. This can be achieved via Airbnb rentals for tourists, long-term lease rentals for residents or businesses, or vehicle rentals.

Later in this article, I’ll explain different ideas under each type of passive income idea and how to start them.

How Much Passive Income Can You Earn?

The amount of passive income one can earn in the Philippines varies widely based on several factors, such as the amount of initial investment, the type of passive income idea pursued, and the risk involved. While some might generate a few thousand pesos monthly, others could rake in hundreds of thousands, if not more.

Here is a table with a few examples of passive income ideas, along with a brief description and estimated monthly earnings:

Passive Income Idea	Description	Estimated Monthly Earnings
Dividend-Earning Stocks	Invest in stocks that pay out dividends periodically.	₱1,000 – ₱15,000
Treasury Bonds	Lend money to the government in exchange for interest.	₱500 – ₱5,000
Mutual Funds	Invest in a pooled fund managed by professionals.	₱500 – ₱10,000
Pag-IBIG MP2	Invest in the government’s voluntary savings program.	₱500 – ₱5,000
UITFs	Invest in a professionally managed pooled fund.	₱500 – ₱10,000
Affiliate Marketing	Earn commissions by promoting products/services online.	₱1,000 – ₱50,000
Sell Online Courses	Create and sell courses on platforms like Udemy.	₱5,000 – ₱100,000
Airbnb Rentals	Rent out property to tourists through Airbnb.	₱10,000 – ₱100,000
Long-term Lease Rentals	Lease property to tenants for a fixed term.	₱15,000 – ₱200,000

These are just estimated figures based on typical scenarios and market conditions. Actual earnings can vary based on numerous factors, and there is always a risk involved with any investment or business venture. Always do your research and, when necessary, seek professional advice before diving into any passive income opportunity.

Pros and Cons of Passive Income

Earning passive income sounds like a dream for many, especially when the concept conjures images of money rolling in while you sleep or relax on a beach. However, while there are undeniable benefits to establishing passive income streams, there are also challenges to be aware of. Here’s a balanced look at the pros and cons of passive income:

Pros

• Financial Independence: Passive income can supplement your regular earnings, helping you reach your financial goals faster. Over time, with multiple streams, it can even replace your active income, allowing you to retire early or pivot to other passions.
• Diversified Revenue Streams: Relying on a single source of income can be risky. Passive income offers multiple revenue channels, reducing the financial impact if one stream dries up.
• Flexibility: With a steady flow of passive income, you gain more flexibility in your life choices, be it in terms of work, travel, or pursuing other hobbies.
• Leveraged Time: Unlike active income, where you trade time for money, passive income frees time. Once set up, many passive income ventures require minimal oversight, giving you more leisure time for other projects.
• Potential for Exponential Growth: Some passive income streams, especially those online, have the potential for exponential growth without proportional increases in effort or investment.

Cons

• Initial Time and Money Investment: Setting up a passive income stream often requires significant upfront effort, research, or capital. It’s not always “easy money” to start.
• No Guaranteed Returns: Like any investment or business, there’s always risk. Some passive income ventures might not yield expected returns, and you might even face losses.
• Management and Maintenance: Contrary to the notion that passive income is entirely hands-off, some streams do require periodic attention and management, be it in terms of updating content, managing properties, or reviewing investments.
• Financial Barriers: Some of the most lucrative passive income sources, like real estate, require substantial capital to start.
• Saturation and Competition: With the rise of the internet, more people are vying for a piece of the passive income pie, leading to increased competition in popular niches.

15 of the Best Passive Income Ideas in the Philippines

So, let’s look at the most common passive income sources and ideas and how you can get started.

Traditional Passive Income Tools

1. Dividend-Earning Stocks

Dividend-earning stocks refer to company shares that return a portion of their profits to shareholders in the form of dividends. By investing in these stocks, you can earn a regular income apart from any capital gains.

The Philippine Stock Exchange (PSE) is the primary marketplace for buying and selling stocks in the country. You can start by opening an account with a local stock brokerage.

2. Treasury Bonds

Treasury bonds are debt securities issued by the Philippine government. When you buy a treasury bond, you’re essentially lending money to the government, and in return, you receive interest payments.

How to Get Started: The Bureau of the Treasury often announces new bond offerings. They also have partnered banks through which these can be purchased.

3. Mutual Funds

A mutual fund pools together money from multiple investors to invest in a diversified portfolio managed by professionals. Depending on the type of fund, it can invest in stocks, bonds, or other assets.

How to Get Started: There are several mutual fund companies in the Philippines. One popular platform for comparing and buying mutual funds is COL Financial.

4. Pag-IBIG MP2

The Modified Pag-IBIG II (MP2) is a voluntary savings program offering higher dividends than the regular Pag-IBIG savings. It’s a government-backed program, making it a relatively safe investment.

How to Get Started: You can enroll in the MP2 program directly through the Pag-IBIG Fund’s official website.

5. UITFs

Unit Investment Trust Funds (UITFs) are pooled funds managed by banks. Like mutual funds, they allow investors to hold a diversified portfolio, but they differ in terms of structure and regulation.

How to Get Started: Most major banks in the Philippines offer UITFs. You can start by checking the UITF offerings from banks like BDO, BPI, or Metrobank.

6. Variable Universal Life (VUL)

VUL is a life insurance product with an investment component. Part of your premiums goes toward life insurance, while the rest is invested in a fund of your choice.

How to Get Started: Various insurance companies in the Philippines offer VUL products. Companies like:

• Sun Life
• Philam Life 
• AXA Philippines

Online Passive Income Ideas

7. Affiliate Marketing

Affiliate marketing involves promoting products or services and earning a commission for every sale made through your referral link. Websites like Lazada Affiliate Program or Zalora’s Partner Program allow you to sign up and promote their products, earning a percentage for every sale.

You can also join our Iponaryo Affiliate Program and earn when you refer customers to our products and services. On top of earning passive income for yourself, you also help others become wealthy and debt-free!

8. Sell Online Courses

With the rise of e-learning, creating and selling online courses has become a popular way to share knowledge and earn. Platforms like Udemy and Teachable allow you to host and sell courses on almost any topic.

9. Sell Books

Self-publishing has made it easier for authors to get their works out to the public. Through platforms like Amazon Kindle Direct Publishing (KDP), you can publish and sell your ebooks to a global audience.

If you don’t know how to write books, you can choose to resell books instead. We have a reseller program that you can take advantage of too. To start reselling Chinkee Tan books, check this page out.

10. Blogging

Starting a blog about a niche you’re passionate about can lead to various monetization methods, from ad revenue to sponsored posts. WordPress is a widely used platform for starting a blog. As your audience grows, you can integrate affiliate links and offer digital products.

11. Create a Print-on-demand Business

Print-on-demand allows you to sell custom designs on products like t-shirts, mugs, and more without holding inventory. Websites like Printful and Merch by Amazon offer print-on-demand services where you can upload your designs, and they handle the printing and shipping for you.

12. Sell High-demand Products Online

E-commerce is booming, and there’s no better time to start an online store. Platforms like Shopify or Shopee Mall make it easier than ever to list and sell products, whether you’re dropshipping or selling your products.

Passive Rental Income Ideas

13. Airbnb Rentals

The rise of platforms like Airbnb has revolutionized the way travelers find accommodations. Instead of traditional hotels, many tourists and even locals prefer the unique and homely experience that Airbnb listings provide. 

If you have a spare room or an unused property, listing it on Airbnb can be a great way to generate additional income. Plus, with the Philippines being a popular tourist destination, there’s always demand for quality accommodations, especially in key cities and tourist spots.

14. Long-term Lease Rentals

Real estate has always been a favorite when it comes to passive income generation. Purchasing properties and renting them out on long-term leases can provide a stable monthly income. 

Sites like Lamudi or Property24 can help you gauge market prices and trends. Plus, long-term leases often require less management than short-term rentals, giving you more peace of mind.

15. Vehicle Rentals

With the evolving transportation scene in the Philippines, vehicle rentals have become a lucrative passive income avenue. Whether it’s cars, vans, or even motorbikes, there’s a demand for vehicle rentals for locals and tourists. 

Platforms like Rentpad can help you list your vehicle for rent. Additionally, collaborating with local tour operators or businesses can also boost your rental visibility.

Frequently Asked Questions

Can passive income be “passive”?

While the idea of “passive” income suggests earning without active involvement, in reality, most passive income streams require an initial investment of time, effort, or capital. 

For example, setting up a blog or creating an online course demands significant upfront work. Even rental properties, although considered passive, require maintenance, tenant management, and occasional problem-solving. 

However, once these ventures are established and running smoothly, they can generate income with minimal ongoing effort. The key is to set up systems and, where possible, automate or delegate tasks to truly make the income “passive.”

How much passive income can I make in the Philippines?

The amount of passive income in the Philippines varies widely based on the chosen investment or activity. For instance:

• Real Estate: Rental income depends on the property’s location, size, and condition. A condo in a prime location like Makati or BGC can fetch a high rental fee compared to properties in less urbanized areas.
• Online Ventures: Earnings from blogging, affiliate marketing, or selling courses can range from a few thousand pesos to hundreds of thousands, depending on the niche, audience size, and monetization strategy.
• Financial Investments: Dividend-earning stocks, UITFs, and other financial tools have returns based on market performance, the amount invested, and the investment duration.

It’s essential to research, consult with experts, and regularly review and adjust your strategies to maximize your passive income potential in the Philippines.

Final Thoughts

Pursuing passive income offers exciting possibilities for Filipinos. While it’s tempting to dream of income streams that require minimal effort, it’s essential to approach each venture with a combination of enthusiasm and pragmatism. The groundwork, dedication, and initial investments you make today have the potential to yield fruitful results in the future.

Remember that there’s no one-size-fits-all formula. What works for one person might not work for another, and the journey to sustainable passive income is often paved with lessons learned, adjustments made, and resilience tested.

By staying informed, being adaptable, and aligning passive income strategies with personal goals and values, you can pave the way for a more financially secure and independent future. After all, passive income is not just about financial gains but also about achieving a balance that allows for more freedom, flexibility, and opportunities to enjoy life’s other pursuits.