Worked example: Structured Settlement in Philippines

Example inputs

Run this scenario in DocketMath using the Structured Settlement calculator.

Below is a worked example of a structured settlement scenario in the Philippines (PH), using DocketMath’s Structured Settlement calculator. This walkthrough focuses on how to set up inputs and interpret outputs—not on legal advice.

Scenario snapshot (worked example)

Assume a claimant will receive:

• ₱5,000,000 total compensation
• paid in 8 installments
• on a schedule that starts 30 days from signing
• then continues monthly

To make the example concrete, we’ll model a common structure pattern:

• The ₱5,000,000 total is split into level monthly payments
• The time value of money is represented via a discount rate (so you can compare present value vs. face value)

Inputs for DocketMath (PH)

Use DocketMath → Structured Settlement tool: /tools/structured-settlement

Here are the exact inputs you’d enter for this example:

• Total settlement amount (₱): 5,000,000
• Number of payments: 8
• Payment frequency: Monthly
• Start delay: 30 days
• Discount rate (annual): 6.00%
• Payment timing convention: Payment at end of each period (monthly)

Why the discount rate matters:

• If your goal is present value comparison (e.g., “what is the value today of these future payments?”), the discount rate is essential.
• If your goal is only to generate installment amounts, the discount rate still affects the calculator’s present value outputs, so you should interpret PV as model output—not as a guaranteed valuation.

Example contract-style expectations (what the calculator will produce)

In practice, you should expect outputs like:

• installment amount for each payment number
• dates for each installment (based on start delay and monthly frequency)
• present value (PV) of each payment and total PV (depending on how the tool is configured)

Example run

Run the Structured Settlement calculator using the example inputs above. Review the breakdown for intermediate steps (segments, adjustments, or rate changes) so you can see how each input moves the output. Save the result for reference and compare it to your actual scenario.

Step 1: Run the calculator with the inputs above

Open DocketMath → Structured Settlement at /tools/structured-settlement and enter:

• Total settlement amount: ₱5,000,000
• Number of payments: 8
• Monthly frequency
• Start delay: 30 days
• Discount rate: 6.00%
• Timing: end of each period

Then run the calculation.

Step 2: Review the output structure

A structured settlement calculator typically returns a schedule where each row is one installment, with a payment date and a present value component.

Based on the assumptions (level monthly payments), your installment schedule would look like this (illustrative formatting):

How to read this:

• Payment amount is constant here because we modeled level monthly payments.
• Present value declines over time due to discounting at 6.00% annual.
• The Total PV is a model-based comparison metric, not a substitute for professional valuation.

Step 3: Use the PV output to compare “value today”

A common reason to run discounting models is to compare:

• Face value total: ₱5,000,000
• Total present value (example): ~₱4,555,000

The difference reflects the time value of money under the chosen discount rate and timing assumptions.

Gentle reminder: PV depends on the discount rate and timing convention you select. Treat PV as a sensitivity-aware output, not as a guaranteed “correct” valuation.

Step 4: Confirm schedule dates align to your intent

Installment date generation depends on:

• start delay (here, 30 days)
• frequency (here, monthly)
• timing convention (end of period vs beginning of period)

If your underlying document specifies exact calendar rules (e.g., “on the 15th of each month”), you’ll want to mirror that as closely as the tool’s timing options allow.

Sensitivity check

Small input changes can meaningfully change present value. Here are practical sensitivity checks you can run in DocketMath to see how outputs move.

To test sensitivity, change one high-impact input (like the rate, start date, or cap) and rerun the calculation. Compare the outputs side by side so you can see how small input shifts affect the result.

Sensitivity 1: Change discount rate (6.00% → 8.00%)

Keep everything the same, but set:

• Discount rate: 8.00% annual

What you’ll likely see:

• Total PV decreases because future payments are discounted more heavily.
• Payment amounts may remain the same if the tool enforces level payments.

What to check:

Sensitivity 2: Increase start delay (30 days → 60 days)

Keep discount rate at 6.00%, but change:

• Start delay: 60 days

Expected effect:

• Each payment date shifts later.
• PV generally falls because cash flows occur further in the future.

What to check:

Sensitivity 3: Change number of payments (8 → 10), keep total ₱5,000,000

Set:

• Total settlement amount: ₱5,000,000
• Number of payments: 10
• Payment frequency: Monthly
• Start delay: 30 days
• Discount rate: 6.00%

Expected effect:

• Level installment amount typically becomes ₱500,000 per period (₱5,000,000 / 10).
• PV will move depending on timing and spacing across the additional payments.

Quick comparison logic:

• More payments can extend cash flows outward or change the timing profile, which often reduces PV.
• Because implementation details matter, it’s best to run the comparison in the calculator.

Practical “what to document” for stakeholders

When you share structured settlement math outputs, document the model inputs so results are auditable:

• Total settlement amount: ₱5,000,000
• Installments: 8 monthly payments
• Start delay: 30 days
• Discount rate: 6.00% annual
• PV basis / timing convention: end-of-period (if applicable)

Related reading

• Structured Settlement Calculator Guide for Alabama
• Structured Settlement Calculator Guide for Arizona
• Structured Settlement Calculator Guide for Colorado