The Kasyafi planning library
Financial Terms, in Plain Language
Understand APR, liquidity, minimum payments, emergency funds, MP2 and other terms through short explanations, peso examples and links to practical tools.
By Kasyafi · Reviewed September 4, 2026 · Fictional examples for planning
- APR
- Annual percentage rate expresses a borrowing rate on a yearly basis. A 36% nominal APR corresponds to 3% per month before compounding; fees and the lender’s calculation method can change total cost.Explore apr
- Amortization
- Paying a loan through scheduled installments that generally include principal and interest. A ₱5,000 payment is not necessarily a ₱5,000 reduction in debt.Explore amortization
- Outstanding Balance
- The unpaid amount at the time you check. New charges and payments after the last statement can make it different from the statement balance.Explore outstanding balance
- Statement Balance
- The balance recorded at a billing-cycle close. If the statement says ₱12,000 and you later spend ₱2,000, the current balance may be ₱14,000 even though that statement remains ₱12,000.Explore statement balance
- Minimum Payment
- The least payment required for a billing period under the creditor’s terms. It does not necessarily stop interest or clear the balance quickly.Explore minimum payment
- Debt-to-Income Ratio
- Debt payments divided by income over the same period. ₱6,000 divided by ₱30,000 is 20%. Kasyafi’s public checkup uses take-home pay; a lender may use gross income and a different definition.Explore debt-to-income ratio
- Emergency Fund
- Accessible savings reserved for an urgent, necessary disruption. ₱60,000 against ₱20,000 in essential monthly outgoings is three months of coverage.Explore emergency fund
- Sinking Fund
- Money accumulated for a known expense. Saving ₱1,000 each month for a ₱12,000 annual renewal spreads the cost across the year.Explore sinking fund
- Net Worth
- Assets minus liabilities at a point in time. ₱200,000 in assets less ₱80,000 owed gives ₱120,000 net worth. It does not tell you how much cash is accessible today.Explore net worth
- Liquidity
- How readily an asset can become usable cash, considering delay, restrictions and possible loss. A valuable property can still be poor funding for a bill due tomorrow.Explore liquidity
- Compound Interest
- Interest calculated on principal and accumulated interest. At an illustrative 5% compounded yearly, ₱10,000 becomes ₱10,500 after a year and ₱11,025 after two, before fees and taxes.Explore compound interest
- MP2
- Modified Pag-IBIG II, a voluntary savings program separate from regular Pag-IBIG savings. Read the program’s maturity and withdrawal rules; declared dividends are not a promise of future returns.Explore mp2
- Monthly Salary Credit
- A compensation base used in the SSS contribution and benefit framework. It is drawn from the applicable schedule, so it is not simply another name for your take-home pay.Explore monthly salary credit
- Withholding Tax
- Tax deducted and remitted by the payer under applicable rules. Payroll withholding may be reconciled through the employer’s annual calculation.Explore withholding tax
- Taxable Income
- Income included in the tax base after applicable exclusions and deductions. Gross earnings and taxable compensation can differ; classification matters.Explore taxable income
- Safe-to-Spend
- Kasyafi’s estimate of discretionary cash after protecting entered obligations and a buffer over a defined horizon. A ₱20,000 account balance may leave only ₱2,000 safe to spend.Explore safe-to-spend
- Cash Flow
- Money entering and leaving over time. ₱40,000 of monthly income does not cover a bill on the 10th if the cash only arrives on the 15th.Explore cash flow
- Principal
- The borrowed amount still subject to repayment, or the initial capital invested. It is distinct from interest and fees.Explore principal
- Interest
- A borrowing cost or an amount earned on eligible savings. At a simple illustrative monthly rate of 2%, a ₱10,000 balance incurs ₱200 before payments and fees.Explore interest
- Maturity
- The point when an instrument reaches its stated term and the applicable payment or access rules take effect. A maturity date is not a guarantee of a projected return.Explore maturity
- Dividend
- An amount distributed under an institution’s or company’s rules. An MP2 dividend declaration describes a particular period; historical declarations do not establish the next period’s rate.Explore dividend
Use definitions to ask better questions
These are planning explanations, not replacements for your agreement, payroll rules or an institution’s official definitions. Ask which period, rate, balance and fees a number includes before comparing it with another product.
The government-program entries point to Kasyafi’s sourced guides and the official reference hub for verification dates. Illustrative rates in examples are assumptions, not current product offers.
Continue with the next useful step
Financial Checkup
How financially stable are you right now? Check your cash flow, emergency coverage and debt burden, then find a practical next step. Free and anonymous.
Worked money examples
Follow five fictional Philippine cash-flow decisions.
Your Personal CFO
A practical guide to forecasts, decisions and financial reviews.
references
Explore the related guide and its worked examples.
Read our calculation methodology and official references. Report an error through Contact.