The Parable of Talents is about the three servants way in handling the talents given unto them by
their master. The first and second servant are able to raise the money into two folds, however,
the third servant do not know the right thing to do with the talents he received. Afraid, he hid the
talents in secret and gives it back to his master on the day he arrived.
Sometimes, our gifts and talents are taken away from us because we do not use it for the greater
good of mankind. We are all stewards in this Earth, thus, we must learn to cherish each and
everything we have and use the talents given unto us in creating a more perpetual harmonious
life.
Before anything else, I encouraged everyone to please cooperated and participate actively in class as
you will be graded according to your performance.
Before we begin our with our lesson, first, Let us play a game. The game is called 4 pics 1 word. This is
guessing game, where you are going to identify the right word/s being described with the help of 4
pictures presented. Later, I will call somebody in the class to answer. Is it clear? Okay! lets start.
Mr. Khu, are you here in the meeting? What is your answer?
ans. money
“Correct!”
Mr. Khu, how would you define money? What is money for you?
That was a very nice answer. Thank you.
What about the next item, Mr. Olesco? What is your answer?
ans. bank
Very good!
Mr. Olesco you ever been inside a bank?
That good to hear. We see that you already has experienced making transaction inside a bank.
That’s alright. Someday, maybe you will and would have plenty of money or savings in your
bank account.
And the last, Ms. Abanilla? What is your answer?
Very good! That was great answer!
Now, class what did you observe? Ms. Magdaraog?
“Sir we use our money to buy our basic needs and other commodities, and also save money in
the bank.”
That’s correct!
We, human beings have basic needs and wants to survive. We use money as payment for these
things, and the rest were save in the bank. Aside from these, there are also other certain charges,
fees, and other form of payments we needed to make as individuals living in the society.
Discuss
In this morning, we are going to tackle about the significant role of Insurance and Taxes, on how
they influence the economy and our well-being.
Ms. Turla, kindly read the definition of Insurance.
Insurance customer paying a company a monthly fee to protect himself/herself from the
risk of financial loss. In other words, insurance is a certain amount a person paying a company
or institution to insure himself/herself of financial loss in future caused of specific
problem/circumstances that might rises. There are many forms of insurance such as life
insurance, health insurance, car insurance and others. Insurance is a contract whereby one
undertakes for a consideration to indemnify another against loss, damage, or liability
arising from an unknown or contingent event.
Here are some of most common insurance among employees are;
What is the purpose of :
•
The Social Security System (SSS) administers social security protection to workers
in the private sector. Social security provides replacement income for workers in times
of death, disability, sickness, maternity and old age. On September 1, 1957, the Social
Security Act of 1954 was implemented.
its mission is to promote social justice and provide meaningful protection to members and their
families against the hazards of disability, sickness, maternity, old age, death and other
contingencies resulting in loss of income or financial burden.
•
Created by Commonwealth Act No. 186 and Republic Act No. 8291 (GSIS Act of 1997),
GSIS is a social insurance institution that provides a defined benefit scheme under the
law. It insures its members against the occurrence of certain contingencies in exchange
for their monthly premium contributions.
SSS is a social insurance program that aims to provide protection to it
Compulsory and Voluntary coverage members and beneficiaries ,
while GSIS serves as the counterpart social insurance program for those who work in
government. SSS members can avail of maternity, sickness, disability, retirement, funeral
and death benefits.
Third
•
The birth of the Home Development Mutual Fund (HDMF), more popularly known as the
Pag-IBIG Fund, was an answer to the need for a national savings program and an
affordable shelter financing for the Filipino worker. The Fund was established on 11
June 1978 by virtue of Presidential Decree No. Its original purpose was solely as a
provident fund to encourage savings among Filipinos.
•
The Pag-IBIG Loyalty Card Plus allows you to enjoy exclusive discounts and rewards on
your grocery purchases, tuition fee, hospital bills, fuel expenses, restaurant bills and
many more from our more than 300 partner-establishments nationwide. Multi-Purpose
Loan (MPL) proceeds, MP2 Savings dividends, and other benefits.
•
Created by Commonwealth Act No. 186 and Republic Act No. 8291 (GSIS Act of 1997),
GSIS is a social insurance institution that provides a defined benefit scheme under the
law. It insures its members against the occurrence of certain contingencies in exchange
for their monthly premium contributions.
GSIS covers all government workers irrespective of their employment status
•
Except for the members of the judiciary and constitutional commissions who shall have
life insurance only, all members of the GSIS shall have life insurance, retirement and all
other social security protection provided under RA No. 8291.
•
What types of insurance do people use and what are the benefits in having insurance?
SSS, GSIS, Pag-IBIG Fund are only few type insurance a person can have.
How does one pay for insurance?
On average, Philippine health insurance can start anywhere between Php1,400 to
Php60,000 annually, depending on which provider you sign up with. The cost of health
insurance in the Philippines also depends on several factors. In the Philippines, private
insurance is usually bought by self-employed or freelance workers, or companies
that provide private options to their employees. Premiums are fully paid by the
insured. Immediate family members can also be on the plan, but this may come at an
additional cost.
Identify whether a privilge or obligned?
insurance is more likely a previlage to further to encourage Filipinos of their future in any
given circumstances.
tax is cumpolsory required by law and, is mandated by the government.
extended mandatory health insurance coverage by Philippine Health Insurance Corp.
(PhilHealth) to all Filipinos aged 60 or older regardless of social or economic status.
Doubles the number of senior citizens covered by PhilHealth to around 6 million in in the
time of former President Benigno Aquino
“Next, is Tax. Mr. Serato, kindly read the definition of Tax.”
Tax a charge usually of money imposed by authority on persons or property for public
purposes.
used of revenue for public social services. This tax or money collected become a fund for
government public services especially in making projects such as construction of roads,
buildings establishment many more.
•
Who administers tax laws in the Philippines?
•
– The Bureau of Internal Revenue
The 2 BASIC TYPES OF TAX
National taxes
Local government taxes
•
•
National taxes are those that we pay to the government through the Bureau of Internal
Revenue. (Republic Act No. 8424 otherwise known as the Tax Reform Act of 1997) This
include: Capital Gains Tax, Income Tax, Percentage Tax, Value Added Tax,
Withholding Tax on Compensation, Excise Tax
•
The import and export tariffs levied by the Bureau of Customs under Republic Act No.
1937 otherwise known as the Tariff and Customs Code of the Philippines (as amended)
can also be considered as national government taxes or duties.
•
Capital Gains Tax – is a tax imposed on the gains presumed to have been realized by the
seller from the sale, exchange, or other disposition of capital assets located in the
Philippines, including pacto de retro sales and other forms of conditional sale.
•
Income Tax – is a tax on all yearly profits arising from property, profession, trades or
offices or as a tax on a person’s income, emoluments, profits and the like. Self-employed
individuals and corporate taxpayers pay quarterly income taxes from 1st quarter to 3rd
quarter. And instead of filing quarterly income tax on the fourth quarter, they file and pay
their annual income tax return for the taxable year. Individual income tax is based on
graduated schedule of tax rate, while corporate income tax in based on a fixed rate
prescribe by the tax law or special law.
•
Percentage Tax – is a business tax imposed on persons or entities who sell or lease
goods, properties or services in the course of trade or business whose gross annual sales
or receipts do not exceed the amount required to register as VAT-registered taxpayers.
Percentage taxes are usually based on a fixed rate. They are usually paid monthly by
businesses or professionals. However, some special industries and transactions pay
percentage tax on a quarterly basis.
•
Value Added Tax – is a business tax imposed and collected from the seller in the course
of trade or business on every sale of properties (real or personal) lease of goods or
properties (real or personal) or vendors of services. It is an indirect tax, thus, it can be
passed on to the buyer, causing this to increase the prices of most goods and services
bought and paid by consumers. VAT returns are usually filed and paid monthly and
quarterly.
Withholding Tax on Compensation – is the tax withheld from individuals receiving purely
compensation income. This tax is what employers withheld in their employees’ compensation
income and remit to the government through the BIR or authorized accrediting agent.
•
Expanded Withholding Tax – is a kind of withholding tax which is prescribed only for
certain payors and is creditable against the income tax due of the payee for the taxable
quarter year. Examples of the expanded withholding taxes are those that are withheld on
rental income and professional income.
•
Final Withholding Tax – is a kind of withholding tax which is prescribed only for
certain payors and is not creditable against the income tax due of the payee for the
taxable year. Income Tax withheld constitutes the full and final payment of the Income
Tax due from the payee on the said income. An example of final withholding tax is the
tax withheld by banks on the interest income earned on bank deposits.
•
Withholding Tax on Government Money Payments is the withholding tax withheld by
government offices and instrumentalities, including government-owned or -controlled
corporations and local government units, before making any payments to private
individuals, corporations, partnerships and/or associations.
•
Excise Tax is a tax on the production, sale or consumption of a commodity in a country.
It applies to goods manufactured or produced in the Philippines for domestic sale or
consumption or for any other disposition; and to imported goods.
Local government taxation in the Philippines are based on Republic Act 7160 or otherwise
known as the Local Government Code of 1991. This include: Tax on Transfer of Real
Property Ownership, Tax on Business of Printing and Publication, Franchise Tax,
Professional Tax, Tax on Business, Fees for Sealing and Licensing of Weights and
Measures, and Community Tax.
•
These taxes, fees or charges are imposed by the local government units, such as
provinces, cities, municipalities, and barangays, who have been given the power to levy
such taxes by the code.
•
Tax on Transfer of Real Property Ownership – tax imposed on the sale, donation,
barter, or on any other mode of transferring ownership or title of real property.
•
Tax on Business of Printing and Publication – tax on the business of persons engaged
in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates,
receipts, pamphlets, and others of similar nature.
•
Franchise Tax – tax on businesses enjoying a franchise, at the rate not exceeding fifty
percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar
year based on the incoming receipt, or realized, within its territorial jurisdiction.
•
Professional Tax – an annual professional tax on each person engaged in the exercise or
practice of his profession requiring government examination.
•
Tax on Business – taxes imposed by cities, municipalities on businesses before they will
be issued a business license or permit to start operations based on the schedule of rates
prescribed by the local government code, as amended. Take note that the rates may vary
among cities and municipalities. This is usually what businesses pay to get their Business
Mayor’s Permit.
•
Fees for Sealing and Licensing of Weights and Measures – fees for the sealing and
licensing of weights and measures at such reasonable rates as shall be prescribed by the
sangguniang bayan of the municipality or city.
•
Community Tax – tax levied by cities or municipalities to every inhabitant of the
Philippines eighteen (18) years of age or over who has been regularly employed on a
wage or salary basis for at least thirty (30) consecutive working days during any calendar
year, or who is engaged in business or occupation, or who owns real property with an
aggregate assessed value of One thousand pesos (P1,000.00) or more, or who is required
by law to file an income tax return. Community tax is also imposed on every corporation
no matter how created or organized, whether domestic or resident foreign, engaged in or
doing business in the Philippines.
The primary vehicle that the government uses to finance itself is taxation.Taxes may be imposed on
transactions, institutions, property, meals, and other things, but in the final analysis they are paid by
individuals or households. In the real world, governments intervene in the economy
through taxation (or subsidies), provision of public goods, and regulation
What is tax revenue used for?
Tax revenues are used for public services and the operation of the government, as
well as for Social Security and Medicare.
Taxes are funds used by the government to finance basic vital to the lives of citizens
and economic growth.
•
Notes
•
How much is tax in PH?
•
Income of residents in Philippines is taxed progressively up to 32%. Resident citizens are taxed
on all their net income derived from sources within and without the Philippines.
•
How much tax is deducted from business Philippines?
•
The regular corporate income tax (RCIT) is 30% on net taxable income. There is a minimum
corporate income tax (MCIT) equivalent to 2% of gross income, which applies beginning on the
fourth year of commercial operation.
What is the difference between sales tax and property tax? where do each belong?
To deeper understand more about how taxation of money flow in economy, refer to the
illustration presented.
PICTURE OF TAX/MONEY FLOW CYCLE IN ECONOMY
Here, you can see interconnectedness to different sectors in society, each one is important. A
single problem can cause huge impact to our economy, like a chain reaction everything is
connected to everything else, or more likely a domino effect.
Over the years, humans have evolved in response to their changing environment. Our admirable
adaptation is one great characteristic of human nature, it what makes us continue to live and survive
throughout time.
A sort of conclusion, insurance ito ang halaga na nilaan mo sa isang insurance company na
pwedeng pagkunan sakaling merong mangyaring hindi maganda o sa hinaharap. Tax, ito naman
ang buwis na kailangang bayaran sa pagsasagawa o pagproseso ng ilang aktibidad meron nito. Ang
buwis, ay ang nagsisilbing pundo ng gobyerno sa paggawa ng istraktura at mga serbisyo para sa
mamamayan ng bansa.
Do you now understand the difference of insurance from tax?
Very good! Now, let’s move on to our next lesson. But before that, I want you to analyze the
image presented unto you. Then, someone from the class will share his/her own thoughts about
the picture.
Okay! Ms. Francisco, kindly share to us your thoughts or idea on the given picture.
ans.The image represents lack of attention to personal resources arounds you
Very good!
Moreover, the image conveys an individual personal mindset on how he values the things around
him/her. Everything is essential, they have their own purpose. And it’s up to us to discover its
uniqueness and meaning in our lives.
All these being said, at this point we are going to tackle about Tips on being Financially Stable.
The following tips are anchored on the Five Principles of Money Management.
Ms. Luba, kindly read the Five Principles of Money Management.
“Yes Sir” The Five Principles of Money Management is Earn, Save and Invest, Protect, Spend,
and Borrow.”
Thank you Ms. Luba.
So, the Five Principles of Money Management include;
•
Earn
This pertains to the Salary or income of a person in his/her work. It is best for somebody
to have plenty of sources of income. It means greater savings and capital.
Understand your pay and benefits (This will help you manage your finances.)
•
Save and Invest
Or the Investments to a company or firm. Making investment means greater earnings or
fund in doing businesses and other financial matters.
Set goals and start small (Step by step, know your strengths and limitations and awareness of
possible danger like fraud or scam, be alert! )
•
Protect
Emergency savings and adequate insurance are huge help in times of need, where you
can get or used your money or account to emergency situation and other circumstances or
condition that arises.
Have Savings and insurance, earlier we already discussed the benefits of having insurance. In
savings accounts, always have a considerable amount of money, this is considered an important
way on being financially stable.
•
Spend
Shop around and compare prices/products (Canvas)
This pertains to our expenses, to buy products or services we spend. It is inevitable, we need
resources in order to survive. But always remember to Know your card limit. Spend wisely, that
is why most people look for products/services with cheaper prices compared to others, more
preferably with the same best quality.
•
Borrow
Build credit, but understand interest (It is a must to understand the interest or return of
money to the person owned. See to it that you are able to give back the amount and ends are
meet. )
Or the Money owned to someone. People in need borrow money from somebody because they
do not have any or has only small amount of money and cannot afford their needs.
You already know the tips on being financially stable. Now, I want to hear from Ms. Olitan,
Ms. Olitan are you here in the meeeting? Where are you in this particular time?/Where you
currently living right now? That is good to hear. Being an independent woman. I want to how
you manage your finances. Ms, Olitan, how do you budget your allowance/money? What
personal tip or can you share to us? Can you share to us atleast 1 personal tip in handling money?
That was very nice, Thank you Ms. Olitan! Class, lets give Ms. Olitan a virtual clap. Okay, thank
you.
In addition, for an individual to be financially stable he/she must have a financial goal.
Financial goal refers to_____
example
Moreover, it is classified into three; namely
Short-term (under a year)
Mid-term (1-5 years)
Long-term (more than 5 yrs)
The following are the Steps to consider in making financial plan/goal.
1.Determine completion time
2.Total amount needed
3.Monthly goal
financial goal is a well-devised plan in specific period of time
steps
1duration time alloted for the specificed goals/plans
2amount more preferably knowing the exact amount. Much better if the budget has excess amount,
which could be use to other financial goals/plan you have in mind. More budget means lesser problem
and more goals achieved
3monthly goal you have also to analyze your development and withholdings for a month,
recommended. Budget savings still suffice? Resources is it available? Time allotted is it clearly meet? the
overall financial plan to see if it is manage properly.
Development= Process=Needs Time
development is a process, and process needs time
Sa loob ng sampung taon (10 years) kinakailangan mo magtabi ng 291.66 halaga na pera kada buwan
para mabayaran ang down payment sa iyong dream house.
315,000 remaining balance
20 years = 240 months
315,000/240= 1312.5 per month is the amount needed to save for the next 20 years
30 YEARS ang aabot para sa sarili mong dream house.
e.g.,
You want to save up a down payment for a house over the next 10 years.
Assume 350,000 purchase price, requiring 10% down payment (35,000)
10 years=120 months
35,000/120 e=291.66
Save 291.66 per month in order to reach this goal within 10 years.
For the 315,000 remaining balance,
20 years = 240 months
315,000/240= 1312.5 per month is the amount needed to save for the next 20 years.
Total:
35,000+315,000= 350,000 (30 years)