The Philippine government seems to take Filipino freelancers seriously. I am referring to freelancers who are BIR-certified, self-employed individuals who regularly remit payments to the PAG-IBIG fund.
I just passed the first two steps in my application for a housing loan through PAG-IBIG. It is with gratitude that I look back at the advice given to me by Ms. Jennifer M. at this forum - save and invest freelancing money at every opportunity.
For these first two steps I was required to submit invoices of my financial transactions through Upwork, the Certificate of Earnings Report, the reservation fee, bank statements, two valid identification cards, the Annual Income Tax Return, recently-paid for Quarterly ITR and Monthly Percentage Tax Return, the Certificate of Registration (as a Self-Employed individual) and a proof of billing in the form of an internet connection bill.
Since day 01, I haven't printed any of the invoices that Upwork issues. This time, I tried to tally in all invoices sent via email with the current records that I have. These business records have previously been extracted from my Reports page on a weekly basis.
I am grateful to Upwork's engineering team for consistently maintaining my records well. For more than a year that I have been freelancing without any of the invoices printed, I finally got to sit for the task and found all records complete and intact. I, however, noticed that the word "Upwork" was printed only as "work" in invoices dated September 10, 2015 until April 13, 2016. The current invoices have the full "Upwork" label when printed in black and white.
The only limitations I have is that I have been paying for my PAG-IBIG dues under the voluntary contributions category. The marketing staff member who entertained my questions advised me to resolve this issue as soon as possible. So my next few steps will be to make use of all my existing Upwork-related business documents and synthesizing these reports into one complete Financial Statement of Business and have it audited properly by a Certified Public Accountant. I also need to accomplish my Membership Status Verification Slip. Additional required documents that I need to submit include five (5) pieces of 1 x 1 I.D. pictures, a proof showing my latest premium payments made to the Home Development Mutual Fund (HDMF) for at least two years, my Tax Payer's identification card, and a certified true copy of the latest ITR with documentary stamps attached.
I just invested my freelancing money as my reservation fee for my housing loan. But I think that the take-home message of this post is not whether or not I get to have my dream house for my family. I fully understand how it is to be sad because I tend to expect for things to happen. I also understand that I must not take my clients for granted just so I may have my dreams come true.
I would rather think that this post is about the Philippine government recognizing me, a business individual who works from home (and at internet cafes), a woman often marginalized by the society, a mother who is given an opportunity to earn without leaving my family, and myself as a freelancer.
I can still recall the experience I have had with my tax penalties. But I don't remember the pain inherent in the experience anymore.
I see a country which is able to advance economically.
I see a global platform.
I am grateful.
It is like I am holding a suitcase on my left hand while I wave my round trip plane ticket on my right hand and announcing to everybody that I am about to board a plane bound for Japan and everyone who hears my announcement is offering something like a neck pillow, a set of Japanese chop sticks, a week-long hotel accommodations in Tokyo, a free dinner of pink salmon. That is how I see the third phase of my housing loan application.
I just finished submitting all required documents. I got the Membership Status Verification Slip in a matter of thirty minutes free of charge. I am glad to have requested for the consolidation of all my records last July, 2016. I also had to change my membership status from employed to self-employed online. At last, I have a PAG-IBIG identification number now. I had a total of 93 contributions and my last contribution is for the current month. I feel excited over the fact that I have unclaimed dividends that added some substance to my cumulative balance. Dividends seem to appear at my HDMF premium payment sheet every last day of the year. I also noticed that my shares as a self-employed individual began to appear under the employee column while zeros were placed under the employer column.
What serves as my Certificate of Employment as far as PAG-IBIG housing loan application is concerned is my Certificate of Registration as a Self-Employed Individual (the one issued by the Bureau of Internal Revenue) accompanied by my Certificate of Earnings Report (derived from my Reports page here at Upwork). The latter was easy to produce. For reasons unknown to me, my COR suddenly disappeared from my files prompting me to request for a replacement which required me to produce a notarized affidavit of loss, fully accomplished Payment Form (BIR Form 0605) with a bank receipt amounting to Php 1,000.00 (as a penalty for losing my COR) and BIR Form 1905 (so I could update my registration information). I got my second copy of the COR on the same day that I submitted all required documents.
In order to save time, I tried to request for a certified true copy of my latest annual income tax return (ITR) while I was waiting for my COR copy to be released. I learned that I had to make a letter of request addressed to the administrative assistant of the Collection Division of the BIR together with the original copy and photocopy of the said document and pay a certification fee of Php 100.00 plus documentary stamps worth Php 15.00. I was surprised that the said document was personally handed to me during the unholy hour of lunch break by no less than the Chief Executive Officer of the revenue district herself! The entire process was fast and I could glean from how these powerful women acted on my request that they also wanted me to have my 4% discount which, by the way, can be availed by any buyer of a house and lot unit 30 days after the reservation date.
My next stop was the bank statement reflecting all my Upwork earnings. I, finally, had the chance to visit the branch where my former employer opened a payroll account for me. Words cannot fully capture how I felt when I stepped inside the Philippine Stocks Exchange Centre. I finally got to see those figures they call "stocks" blinking on a LED board like how certain destinations or routes get to be advertised at specific locations of the airport. Certainly, my former employer and his comrades (for they are ONE TRIBE) have a flair for business (and everything related to stocks and bonds). Focusing on the meat of my visit to the centre, I felt elated when the bank teller left me to decide for myself the number of months that I need to see on my bank statement. Other banks could offer me only at least three months of bank transactions but with Union Bank, it is different. So I asked if I could be given a bank statement dating to as far back as September, 2015 since that was when I first started earning (although I registered as early as July, 2015). His response was positive and I had the document in less than thirty minutes and free of charge.
As for the post-dated checks, I had to make sure that I have a landline number and a sound (?) savings reputation at the bank where I made my checking account. When asked about my account preference, I opted for the one with the lowest maintaining balance (Php 5,000.00) at zero interest. I might use these checks for the payment of my monthly amortization once the housing project proposal get to be approved. The most difficult part, I guess, was having to transfer cash to the said account since I had to consider the maximum amount to be withdrawn per day and with specific ATM machines, there seems to be quite a pattern of deviations when it comes to this. When funds for the full equity have been made available, I drafted the check and submitted this to the office of the developer processing my housing loan application.
The last document to be accomplished was the Financial Statement of Business. The preparation of this document was not easy. I had to submit hard copies of all six booklets of invoices that I issued to my clients, the Cash Disbursement Journal, The Cash Receipt Journal, a transaction report reflecting gross and net earnings since I started as a self-employed individual up to the current month, all ITRs and monthly percentage tax returns, invoices reflecting service fee deductions issued by Upwork and all other invoices (or receipts) for taxes, bills, utilities and premiums (SSS, PhilHealth and PAG-IBIG) that I paid for. Two accountants have been hired to do the job - one prepared my income statement, balance sheet and the other one was a Certified Public Accountant (CPA) who audited and signed my Financial Statement of Business. The preparation of the Income Statement and Balance Sheet costs Php 2,500.00 while the auditing of the financial statement costs Php 3,000.00. Unfortunately, I did not have any chances of meeting these intellectuals personally. The agency has an administrative officer who receives work from clients distributes the tasks to all accountants. After having a phone interview with the accountant who prepared my Financial Statement of Business, I waited for the CPA to audit the document. The CPA believed that all proofs of evidence that I presented were sufficient enough and appropriate for him to be able to provide a basis for his audit opinion based on the Philippine Standards on Auditing. Finally, I got to reconcile the fact that foreign exchange rate risks do indeed fall under the category called "LOSSES" but in the Income Statement it is labelled as "DEPRECIATION". Overall, I seem to have passed the auditing process and I am glad that a CPA finally got to have a look at my records. Do I need to mention that his name is Jesus?
I am most grateful to the only family I have and to the entire Upwork community, most especially to my clients who provide me with intellectually-stimulating projects while exercising extreme leniency when it comes to deadlines, for staying by me at these times. I would rather say that the third phase of my housing loan application made me see that even without the external manifestations of a human shelter yet, I have a home and for this fact, I am most grateful.
The waiting period officially begins today.
Can there really be housing benefits for Filipino freelancers?
There is just ONE MORE amazing thing that occurred as regards my housing loan application. When I asked for the Official Receipt (which is usually given as a replacement of the acknowledgment receipt that comes with the check) three days after my payment transaction, I was asked by the administrative staff member to request for a copy of the Amended Reservation Agreement.
When I finally had a copy of the Amended RA, I realized that the 4% discount was taken in by the Developer. It appeared in the document that I paid for the full amount. But in reality, they gave me a cash gift (which I used to fund my checking account)!
I noticed, too, that my first reaction was to ask about the 0.06 difference, instead of celebrating the blessing. I felt ashamed when I realized how good the company has been to me. I hope that they will continue to nourish my family's dream of owning a "roof over our head" despite my short-sightedness and limitations.
Way to go, Cumberland (am I violating the ToS for mentioning the name of my "benefactor"?).
When the clock strikes 12:00 am later, my countdown for when we will officially be migrating to our new house and lot will begin.
According to the Marketing Specialist I have talked with, the full payment of the equity does not guarantee that I and my family will be able to transfer to the new house and lot that we are aiming for in the blink of an eye. There is one more condition that is prerequisite to the speedy processing of our housing loan. It looks like the house must be 100% or fully contsructed first. Right now, the construction is about 70% done. This is not inclusive of all fixtures yet.
Also, she made mention of the fact that my ITRs and monthly percentage tax returns must always be accomplished even beyond 2018 which is the termination date of the house equity payments.
Otherwise, I will have to bring Plan B into full force.
Meanwhile, I and my family are having a vacation in this little room and saving whatever amount we can. Whew!
So, there seems to be a glimmer of hope with the coming of the new year. And yes, to every Filipino freelancer.
@Romlen W wrote:
Well-written and super informative. I just have to ask, how many months have you been working as an online freelancer when you applied for a housing loan? Thank you.
The most basic thing to consider is the number of years or the length of time one Pag-IBIG Member has contributed to the Fund. I have been contributing to the Fund since 2003. Does that make any sense?