13th Month Pay: What Will You Do With It?

By | November 22, 2015

13th month pay


13th Month Pay is 1/12th of the basic salary of an employee

within a calendar year.


Under PD 851, a law enacted during the time of President

Ferdinand Marcos, also known as the 13th Month Pay Law requires

all employers to pay all their rank-and-file employees a 13th

month pay not later than December 24 of every year.


Such employees are entitled to the benefit regardless of their

designation or employment status and irrespective of the method

by which their wages are paid, provided that they have worked

for at least 1 month during a calendar year.


Most people equate the 13th month pay to a Christmas bonus

since it should be given before December 24 of each year.


But what will you do with it once you receive it?


Most of you might say that at last, I will now be able to buy

that long overdue smart phone of mine.


Some of you might say that you will put it in a savings

account deposit so you may have something to lean on in case

of emergency.


All of those mentioned above makes since but If I will receive

my 13th month pay today, I will spend it on the following:

  1. Pay My Debt
  2. Invest My Money In Mutual Fund
  3. Invest My Money In Stocks
  4. Invest My Money In UITF
  5. Put My Money In Time Deposit


Pay Your Debts First

Do you have an existing debt that you pay monthly like

  • Housing loan
  • Car loan
  • SSS loan
  • Credit card loan

then upon receiving your 13th month pay, pay these debts



Refrain from borrowing more money while your old debts are

still outstanding  or you have not yet fully paid.


Dont get your debt out of control.


Invest Your Money In Mutual Funds

A Mutual Fund is an investment company that pools together

money from different investors and invests them in various

securities depending on the investment objective of the fund.


The mutual fund company issues shares to the public that

represents their holdings in the fund.


        How You Can earn from Mutual Funds?

If the NAVPS of the mutual fund you are invested in increases

or appreciates, you can sell your mutual fund shares for a profit.


In the same way, if the NAVPS of the mutual fund you are invested

in decreases or depreciates, you may realize a loss if you redeem.


Like any other investment instrument, mutual funds are best

held long-term especially for mutual funds that have investment

objectives of capital growth such as equity funds.


Invest Your Money In UITF

A Unit Investment Trust Fund (UITF) is an open-ended pooled trust

fund denominated in pesos or any acceptable currency, which

is operated and administered by a trust entity and made available

by participation.


Each UITF product is governed by a Declaration of Trust (or

Plan Rules) which contains the investment objectives of the

UITF as well as the mechanics for investing, operating and

administering the fund.


Most UITFs are considered medium to long term investments.

Clients considering to invest in UITFs must have the financial

resources to stay invested in them for a reasonable period of

time in order to maximize earnings potentials.


If the funds to be invested will be needed by the client in

the immediate future, the UITFs may not be a suitable investment

vehicle for such client.


Put Your Money In Time Deposit

A savings account or certificate of deposit (CD) held for a

fixed-term, with the understanding that the depositor can make

a withdrawal only by giving notice.


A time deposit is an interest-bearing bank deposit that has a

specified date of maturity.


Almost all Philippine banks offer these product.


Upon receiving your 13th month pay, consider the above options

to place your hard earned money.

2 thoughts on “13th Month Pay: What Will You Do With It?

  1. Eva

    In fact when someone doesn’t understand afterward its up to
    other people that they will assist, so here it takes place.


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