July 18, 2024

The beginner’s guide on SSS PESO fund gives general information about this offering from Social Security System (SSS). But how does the money grow? When you start investing, how do you earn passive income? In what ways can you make the most out of your savings?

These are the questions that would be answered in this article. Specifically, there will be estimates and comparisons of different saving strategies.

Guaranteed earnings from SSS P.E.S.O fund

P.E.S.O gives guaranteed earnings, one of its many benefits as a provident fund. That means that your earnings are predictable and backed up by the government.

When you start contributing, your money is allocated into various accounts: retirement/disability account (65%), medical account (25%), and general purpose account (10%).

Rate of return of PESO Fund

Each of these accounts earn different rate of returns. It is due to the fact that SSS will invest them different. The retirement/disability account is invested in 5-year treasury bonds while both medical and general purpose accounts are in relatively shorter 364-day treasury bills.

What this means is that there are three varying returns when you save over a long period of time because the accounts earn differently. And this is something that is put into consideration when making the estimates.


So the estimates are approximation of the growth of your savings. The time horizon that is assumed is 20 years. It is chosen because the earnings are guaranteed. If they are not, then a shorter time horizon is selected, which is usually five years.

Fees are also not included as these are not really clear or completely disclosed from any of the materials released by SSS.

Lastly, all earnings are tax-free.

It’s also worth noting that these are just estimates. They are not actual returns. Also, the rate of return may change without prior notice. The only goal for making projections is for illustration and comparison purposes only.

SSS P.E.S.O fund saving strategies

  1. Saving the minimum.
  2. Save every monthly.
  3. Saving semi-annually.
  4. Save every year.
  5. Saving one-time big time.

Saving the minimum

The minimum capital to start the fund is 1,000 pesos. Let’s assume that you just went ahead and opened an account by putting up the initial capital. And somehow, you miss putting more into it or life just happened.

In which case, the estimate is focused on how much the initial capital would’ve grown. Imagine that the money will be deposited for the next 20 years.

In the table, you will also see a comparison. The other columns are for a savings of 2,000 pesos.

1 1,000 1,025 2,000 2,049
2 1,050 2,100
3 1,076 2,152
4 1,103 2,206
5 1,130 2,260
10 1,279 2,558
15 1,449 2,898
20 1,644 3,287

As you can see, a savings of 1,000 pesos grows to 1,644 pesos in two decades. that’s about 64.4% increase than when it is set aside in a piggy bank. The same story happens when you save 2,000 pesos. After a long period of time, it’s going to grow to 3,287 pesos.

What this illustrates is that even after the initial capital was somehow “forgotten”, it still earns. Its earnings may be modest but the money does grow.

For comparison, if you put the money in a savings account in the bank, it’s going to be only 1,051.21 pesos for a saving of 1,000 pesos and 2,102.41 pesos for 2,000 pesos capital after 20 years, which is only an increase of 5.12%.

Saving monthly

Of course, most of us would want to save up and earn more. One strategy is to set aside a little bit each month. But how much extra earning can you gain if you indeed contribute to SSS PESO Fund every month?

To answer this, let’s look at the math.

Say that you can set aside 1,000 pesos or 2,000 at the end of each month. That’s 12,000 pesos or 24,000 pesos at the end of year. In 20 years time, the amount would balloon to 240,000 pesos or 480,000 pesos.

By then, how much would’ve your money grown if you contributed to the fund?

1 12,000 12,137 24,000 24,274
2 24,000 24,577 48,000 49,154
3 36,000 37,329 72,000 74,658
4 48,000 50,402 96,000 100,803
5 60,000 63,803 120,000 127,606
10 120,000 136,069 240,000 272,138
15 180,000 218,024 360,000 436,049
20 240,000 311,082 480,000 622,164

As you can see the money earns in 20 years. The total savings of 240,000 pesos becomes 311,082 pesos and 480,000 pesos becomes 622,124 pesos.

There are three things that can be noted. By contributing every month, you can increase the net savings at the end of two decades. Not only that, you can earn more when you put into the PESO fund.

Lastly, by setting aside a little each month, you can expect to see your money actually accumulate and enjoy compound interest in the process.

Saving semi-annually

You may also want to see how the growth of the fund goes when you save every six months instead of every monthly. In which case, the numbers would be different.

Let’s assume that you can save at least 6,000 or 12,000 pesos semi-annually. And you can do this for consistently for 20 years. You also choose to invest in the Social Security System P.E.S.O fund instead of opening a bank account for this purpose.

That’s 12,000 or 24,000 every year. The table below shows the projection.

1 12,000 12,074 24,000 24,148
2 24,000 24,448 48,000 48,896
3 36,000 37,131 72,000 74,261
4 48,000 50,130 96,000 100,259
5 60,000 63,454 120,000 126,908
10 120,000 135,270 240,000 270,540
15 180,000 216,652 360,000 433,304
20 240,000 308,984 480,000 617,968

By comparison, you can actually save technically the same amount as that of the monthly strategy. However, the returns are way lower when you do it in a semi-annual basis.

Still, your money may still have the opportunity to earn. The 240,000 pesos you saved at the end of 20 years becomes 308,984 pesos and 480,000 becomes 617,968 pesos.

This strategy actually works for people who may expect to get a windfall at the every half of the year. This could range from interest, dividends, gifts, incentives, perks or bonuses received from work or business.

Saving annually

Now what if you can only save once a year? A lot of Filipinos may expect to receive something at the end of at the start of the year such as 13th months pay and Christmas bonuses.

So if you don’t have any other plans for your money or you are building up your funds to make a big purchase somewhere down the road, then saving annually can also be a strategy.

In this estimate, we will assume that you can save at least 12,000 pesos or 24,000 pesos.

1 12,000 12,000 24,000 24,000
2 24,000 24,296 48,000 48,592
3 36,000 36,896 72,000 73,793
4 48,000 49,809 96,000 99,618
5 60,000 63,042 120,000 126,084
10 120,000 134,329 240,000 268,658
15 180,000 215,036 360,000 430,072
20 240,000 306,517 480,000 613,035

As you can see from saving every year, your money grows to 306,517 pesos and 613,035 pesos respectively.

Saving one-time big time

What happens when you save one-time big time?

For any discretionary income that you might want to save up, then maybe investing big-time and let it accumulate for 20 years might be a good strategy for you.

In which case, we assume that you can set aside 100,000 pesos, the maximum amount that you can save in Social Security System (SSS) P.E.S.O. fund.

For comparison, we’re going to see the growth of a one-time investment of 200,000.

1 100,000 103,000 200,000 206,000
2 106,090 212,180
3 109,273 218,545
4 112,551 225,102
5 115,927 231,855
10 134,392 268,783
15 155,797 311,593
20 180,611 361,222

For a one-time investment of 100,000 pesos, your savings may grow to 180,611 pesos and for 200,000 pesos, it could become 361,222 pesos at the end of 20 years.


Whichever strategy you may end up going, what’s important is to get started. If you can also consistently save a bit periodically, then that would help you build your investments even more quickly.

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