Income Investing: 13 Best Income Generating Assets in the Philippines

Last Updated – Nov 5, 2023 @ 12:54 pm

In case you haven’t noticed, inflation is rising at a frightening rate. The increasing costs of fuel, food, and other bills have pushed more people to find new sources of income to supplement their household earnings and provide a safety net for tough times. 

One of the best ways you can build your wealth is through income investing.

Whether you’re still in your first year as an investor, or you’re already a seasoned one, following an income investing strategy has the power to transform your life if you do it right.

Ready to start your journey in investing? We’ve gathered everything you need to know about it below.

What are Income Generating Assets?

An income-generating asset is an asset that generates cash flow or an investment that can be used to create revenue. These can be physical assets like real estate properties and businesses, or they can be financial assets like bonds, stocks, and mutual funds.

The various types of income-generating assets have different cash flow structures, but its major goal is to provide regular payments to investors through cash flow, or a combination of cash flow and growth.

What is Income Investing??

Income investing is the process of finding assets that generate a steady stream of passive income. These assets are used to fund your goals and needs, and help you reach your financial goals faster.

Before we dive deeper into income investing, it is important to note that income investing is not the same as growth investing. The difference between the two requires you to think differently about your assets.

While income investors focus on building cash flow, growth investors specialize in growing their assets.

Most growth investors have a more conservative approach to investing, with a heavy emphasis on a lengthy strategy that can take years to reach financial freedom. Of course, growth investing and income investing can be done simultaneously.

Related: How to Invest your Money

Pros & Cons of Income Investing

Want to see if income investing is right for you? Take a look at its pros and cons below.


Gains regardless of market condition

Today’s market is extremely volatile. This may make you think that it’s not the right time to start income investing.

However, you can still gain money from this investment strategy whatever the market condition is.

Gains from income investing are not fully dependent on the market condition. This is because most income investors go with essential areas of the economy such as utilities and real estate.

Various ways to invest

Income investing offers different avenues to invest. You can invest in stocks, real estate, and bonds, just to name a few.

This gives you a variety of options to suit your financial goals and risk appetite. It also allows you to go for investment avenues that genuinely interest you. 

Reduces investment portfolio volatility

Because income investing calls for more diverse assets, you’ll see lower portfolio volatility since it is not heavily reliant on a single area.

This allows you to sleep better at night since you won’t have to worry about losing much of your money.

Great for supplementing major income source

If you’re already receiving income from working a full-time job, you can use income investing to supplement your current earnings.

After some time, you can fully rely on it for your income. This can help you achieve financial freedom faster. 

Huge potential for long-term capital stock growth 

If you choose to invest in income assets that are also growth assets, you may be able to see a huge jump in your capital stock years from now.

This is great since it can help you support yourself throughout your golden years.


Monthly income is not consistent

Income can vary from month to month when you invest in income assets. This is due to the nature of how these assets generate cash flow.

You may have a very good month with a lot of cash flow, and a bad month with little to no cash flow. Because of this, you need to have a Plan B if your income drops, especially if you’re still starting out.

Lower or more sensitive interest and tax

Some income investments may be sensitive to interest rates. This can affect the cash flow you get from your investment.

Moreover, there are also investments that require a huge tax, such as real estate assets. Considering this, you need to be careful in choosing your income investments and factor in these additional costs that can impact your ability to earn money. 

May need to go with high-risk/additional work for high returns

When it comes to income investing, not all assets generate high yields immediately. To compensate for this and generate more cash flow, you might need to go to high-risk assets.

If not, you may need to do more work, or need more expertise. This may be a deal breaker if you’re only working with limited resources and time.

Can be difficult for beginners

Income investing can be a challenge for newbies since it requires a different mindset.

When you follow an income investing strategy, you need to be extra patient since the goal is to build cash flow, not to sell an asset right away.

Considering this, you may not be able to achieve your desired income after your first months. It needs time to grow and build to be able to fully cover your monthly income. 

Lack of control

Some income investors have no control over the income they receive. This can be a problem if you put a lump sum of cash in a fixed-income investment.

Considering this, you might have to wait several years before you see any returns.

Some investments do not have high liquidity 

There are income investment assets that are not as liquid as other investments. They may have a longer lock-in period and have certain restrictions or limitations that make it difficult to sell or trade them.

This can be a problem if you need money right away.

Thankfully, there are ways to balance the liquidity of your investments. You just need to follow certain strategies to make it work.

Best Income Generating Assets to Invest in the Philippines

We’ve rounded up the best income-generating assets you can try below.

1. Real Estate

Real estate refers to any property that is used for housing, business operations, or other commercial or industrial purposes.

Because of its versatility, real estate is considered one of the most lucrative income-generating assets you can invest in if you’re looking for cash flow.

Real Estate also has a secondary benefit in its ability to provide capital appreciation. 

How it generates income:

Real estate assets are incredibly versatile when it comes to generating income. You can either rent the property to other people or use it for businesses – either for a storefront or for an office space.

Additionally, if you have a real estate property located in a residential or commercial area, its value will appreciate over time without you even lifting a finger. 

One of the common misconceptions is that you need a lot of money to get started in real estate.

However, this isn’t always the case. For example, you can rent out a property and list it on Airbnb, or you can buy foreclosed properties and flip or renovate it so you can sell them for a higher price.  

Interested to learn more about real estate? Check out our in-depth guide here

2. Dividend Stocks

Dividend stocks are issued by a publicly-listed company to its shareholders. This investment type has become more popular over the years due to its ability to provide regular income to investors.

Dividend stocks are popular with income investors since they are easy to buy, and you can choose from a wide array of companies listed in the stock market to invest in. 

There are two types of stocks – common and preferred. For common stocks, a company’s board of directors decides stock dividends each quarter.

Meanwhile, preferred stocks are pre-determined and give out fixed payments for a specified period. Preferred stockholders also get their dividends first compared to common shareholders.

Common stocks are riskier compared to preferred stocks, although the higher risk is associated with higher returns.

If you want to have consistency in your income through dividend stocks, it is integral to invest in blue-chip stocks, which are from large, well-known companies that have been around for a long time.

In the Philippine Stock Market, the top gainers (as of 2022) include :

  • Aboitiz Equity Ventures (3.16%)
  • Aboitiz Power Corp. (4.81%)
  • DMCI Holdings (5.34%)
  • Filinvest Land (5.43%)
  • First Gen Corp (4.36%)
  • Globe Telecom (4.71%)
  • LT Group (14.35%)
  • Metrobank (4.43%)

How it generates income:

The most common way to generate income from a dividend stock is through its dividends.

Dividend stocks usually pay out dividends to their shareholders every quarter. If you own more shares, you’ll get more dividends.

Related: Value Investing: Tools, Techniques, & Strategies

3. Private Equity Investing

Private equity investing refers to the ownership of shares in a private business that is not sold publicly in the stock market.

This capital can be used by companies to expand, fund new technology, improve their working capital, solidify their balance sheet, or make acquisitions, among many others. 

How it generates income:

Private equity is an investment strategy you can use to generate passive income. As expected, your income is tied to the ability of a particular company.

To get more income, you will need to look for companies that have huge potential. 

The easiest way to invest in this income-generating asset is by buying shares of a Private Equity Exchange Traded Fund.

However, you’d need to pay for a company to manage your investment for you, which is something you may not have to deal with when you go for a direct private equity investment.

Depending on the brokerage firm you use, you may also need to pay a fee each time you buy or sell shares. 

To know more about private equity investing, read this in-depth guide. 

4. REITs

Real Estate Investment Trusts are a good avenue to consider if you want to generate regular income through real estate without having to buy a property yourself.

A REIT portfolio consists of various real estate properties, including apartments, commercial buildings, offices, storage facilities, hospitals, warehouses, and retail stores.

How it generates income:

REITs are considered passive income, since the company managing them does all the work for you, including the acquisition and management of your real estate assets.

REITs make income by collecting rent. Your role is to sit back and wait for your paycheck to arrive.

Want to know more about REITs? Check out this guide. Here, we also discuss the best REITs in the Philippines. 

5. High-Yield Savings Accounts

Nowadays, there are tons of banks and other financial institutions that reward you for your savings compared to usual checking accounts and even some time deposits.

All you have to do is set up an account, and the bank will pay you the interest rate they offer. 

While you can always go with traditional banks such as BDO or BPI, it is recommended to check digital banks since they usually offer higher returns.

For example, both Sea Bank and Maya currently offers 6% interest per annum. Meanwhile, Tonik Bank offers 4.5% interest per annum on their Group Stashes. 

How it generates income:

When you open a savings account, the bank will pay you interest based on the money you leave in that account.

The bank may lend your money to other people, but they usually charge a higher interest rate compared to what you receive as a High-Yield Savings Account holder. 

Check out our guide on the best savings account you can open here

6. Buying or Starting a Business

Starting a business can be beyond challenging, but it can provide you with a very strong income stream if you’re successful at it.

If you don’t have the money to start or buy a business on your own, you can borrow money from banks or other lending institutions. Here’s our guide on the best business loans you can apply for. 

There are different types of businesses you can start, some of which you will be able to sell later depending on their success.

Doing this will allow you to get back the capital you invested, as well as earn a huge profit. You can use this money to start or buy a new business. 

How it generates income:

Businesses will generate revenue through the sales of the products or services they offer.

You can either sell your products and services directly to consumers, sell your business totally, or let a new partner or investor do the work for you.

Can’t think of a business idea? This guide will inspire you. 

7. Websites

Building a website can be an excellent income-generating asset.

However, you need to thoroughly plan the type of website you want to build, as well as your marketing and content strategy. You must also take into consideration building a strong online presence. 

How it generates income:

The first thing you will need to do is to build an awesome website that people will want to visit. Then, you need to get traffic to that website.

Finally, you can make money through Google AdSense, sponsored content, collaborations, merchandise, affiliate marketing, and/or selling products online. You can also sell your website. 

8. Money Market Mutual Funds

Money market funds are a kind of mutual investment fund that invests in near-term instruments such as high-credit-rating, debt-based securities with a short-term maturity, cash, and cash equivalent securities.

With these funds, you can enjoy high liquidity coupled with a low-risk level. 

How it generates income:

Money market funds comprise a diverse pool of securities. The income earned on the securities is passed on to shareholders like you. 

Below are some of the top Money Market Funds in the Philippines:

  • First Metro Save and Learn Money Market Fund, Inc.
  • Philequity Dollar Income Fund Inc.
  • Sun Life Prosperity Dollar Abundance Fund, Inc. 
  • ALFM Money Market Fund, Inc.

9. CDs (Certificate of Deposit)

CDs are a low-risk way to invest your money. It is a type of savings account where you agree not to withdraw your funds for a certain amount of time, usually six months to five years.

This type of time deposit gives you predictable income through interest. Generally, the longer you keep your money, the higher interest you can gain from it. 

LTNCD and Time Deposit accounts 

A Long-Term Negotiable Certificate of Deposit is a type of long-term investment instrument that promises higher returns compared to short-term time deposits and regular savings accounts.

This is a more liquid investment compared to regular CDs since holders can sell it if they need liquidity. Usually, the only restriction to early withdrawal is forfeiture of interest. 

Security Bank offers this type of investment instrument, with a minimum investment of PHP 50,000.00 and increments of PHP 10,000.00 thereafter, 4% interest p.a., and a tenor of 5 years and 6 months. 

Time Deposit accounts work the same way. These are simply interest-bearing accounts with a pre-set date of maturity where you can get your money back plus interest.

Take a look at the best time deposit accounts you can open in the Philippines here

How it generates income:

These investment avenues earn money just like a regular savings account. Interest is added to your principal.

You can either get the interest quarterly or at the maturity period of your account. 

10. Peer-to-Peer Lending

Peer-to-peer lending is a relatively new way to invest and grow your money. It involves lending money to small businesses through an online platform.

You may also lend your money to people who need to borrow money for different purposes, such as home improvement, medical expenses, business expansion, and so on. 

Some of the most reliable P2P lending platforms in the Philippines include Blend Ph, SeedIn, Acudeen, Lend PH, and Kiva. Know more about P2P lending here

How it generates income:

When you sign up as a lender for a Peer-to-peer lending platform, you can gain money from the interest earned from the money you lend. 

11. Annuities

This is a contract between you and an institution that uses your money to generate income for you. You can buy an annuity with a single payment, or a series of payments.

Generally, this is a great way to earn for retirement but it can also be used for income investing. 

In the Philippines, the most popular way to invest in annuities is through insurance companies. 

Another way to do this is through the Personal Equity and Retirement Account or PERA, a voluntary retirement investment program that is comparable to the United States 401(k) and IRA.

PERA also lets you earn tax incentives from the money you invested. You can contribute to this fund until you reach 55 years old. 

How it generates income:

Annuities pay you a fixed-interval income in the future or immediately.

You can make a profit based on how the insurance firm or institution of your choice invests your capital in bonds or other investment avenues. 

12. Bonds (Government & Corporate)

Bonds are an investment that you can use to make money in the long term. The interest rates are usually relatively low, but they can be extremely beneficial for your retirement fund if you hold it for a long time. 

That said, it’s still possible to live off your income from bonds if you have a solid portfolio with decent yields. 

How it generates income:

Generally, no income is earned by just owning bonds. Your only goal is to sell them at a higher price so that you can make a profit.

13. Crypto DeFi 

DeFi, short for decentralized finances, is a term that refers to financial services on public blockchains such as Ethereum. You can take advantage of DeFi by engaging in the following:

  • Lending crypto and earning interest
  • Getting loans without filing tons of paperwork
  • Trading crypto assets without the help of any brokerage
  • Buying derivatives
  • Saving for your future

Crypto DeFi is global, open to all, and peer-to-peer. Therefore, there is no need for a third party. 

How it generates income:

The simplest way you can earn money through this investment avenue is to deposit your cryptocurrency which will pay you an APV or Annual Percentage Yield.

This works similar to when you deposit money in a bank and it pays you interest. 

With most DeFi platforms, you can deposit various coins and tokens, but not traditional currencies. This is why you first have to buy crypto with cash.

You can deposit Ethereum (ERC-20), Ether (ETH), or stablecoins such as USDT. You can’t deposit Bitcoin, but you can try the Ethereum version of Bitcoin, wBTC. Before depositing, make sure to assess the returns offered by the assets you are interested in.

About MJ de Castro

MJ de Castro is the lead personal finance columnist at Grit PH.

MJ started her career as a writer for her local government’s City Information Office. Later on, she became a news anchor on PTV Davao del Norte.

Wanting to break free from the shackles of her 9-to-5 career to live by the beach, she pursued remote work. Over the years, she has developed a wide specialization on health, financial literacy, entrepreneurship, branding, and travel.

Now, she juggles writing professionally, her business centering on women’s menstrual health, and surfing.

Education: Ateneo de Davao University (AB Mass Communication)
Focus: Personal Finance, Personal Development, Entrepreneurship, & Marketing

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