Filipinos know the importance of working hard and earning an honest day’s pay. But aside from actively hustling for that dough, another savings hack worth considering is earning passive income, as it helps you earn without expending too much time and effort.
Let CIMB Bank Philippines, the Best Digital Bank in the Philippines according to The Asian Banker, guide you in understanding what passive income is and help you set up your own passive income stream.
What is passive income?
“Passive income is money you earn from sources other than your primary job or business,” said Dennis De Silva, Vice President for Finance at CIMB Bank Philippines and a banking and finance professional for 20 years. “Unlike your job or business, where income is dependent on the number of hours you worked, customers served, or merchandise sold, passive income allows you to earn cash with less day-to-day engagement.
“Passive income does not necessarily mean being lazy with your money – it's about being intentional with time,” he said. “It is not about making money while sleeping or creating and growing it without doing anything. The truth is it takes clarity and discipline.”
Some common sources of passive income are high interest savings accounts, earnings from rental properties, stock dividends, and other projects where you are not actively involved in the generation of revenue. They help in allowing you to make money in the background as you go on with your usual day-to-day life.
Why is it worth having a passive income source?
“One day, our strength will fade but our dreams will still ask for more. Passive income isn’t just a personal finance strategy – it's an act of self-respect. It’s a way of saying, ‘I don’t want to trade all my time to survive.’ Passive income isn’t about becoming rich overnight – it's about giving options to your future self,” shared De Silva.
He underscored the importance of having a passive income source as a way of futureproofing not just your finances, but your life as well. He says that every peso you set aside today and put to work, whether in a savings product, a time deposit, or a modest investment, becomes a small vote for freedom tomorrow.
Ultimately, earning passive income can help you develop peace of mind even if you’re not actively working, as your passive earnings can be used for other expenses and reduce financial stress. It can also help you create a financial safety net in case of emergencies.
“As your money compounds quietly, it one day buys you something priceless: breathing room. It's not just about how much you make, but what you choose to preserve. That’s why setting up a passive income source is worth it. Not just for the money, but what it makes possible,” he said.
