Pag-IBIG Fund: What is it, Benefits and Eligibility

Pag-IBIG Fund is one of the mandatory contributions that’s being deducted monthly from any Philippine employee, so don’t be surprised if you get this deduction from your very first pay.

If you are wondering what this is and want to learn more about this then you’ve come to the right place.

In this article, we’ll understand what this Pag-IBIG Fund is and what are the benefits for you as a paying member. Let’s also check how you can maximize this Fund and what you can get as a paying member.

What is Pag-IBIG Fund?

Pag-IBIG Fund also known as The Home Development Mutual Fund (HDMF) of the Philippines is a national savings program that offers affordable house financing to Filipinos. The Fund was established on June 11, 1978.

The fund is more popular as Pag-IBIG Fund so we will refer to it as Pag-IBIG Fund in this article. Pag-IBIG stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno.

Based on its acronym, you’ll notice that it works like a bank but this Fund actually earns you more annually compared to your regular savings in a bank through dividends.

Pag-IBIG fund is mainly known for its housing loan program but it also offers other services to its members and we can go through them in this article.

Who can be a member of the Pag-IBIG Fund?

The Pag-IBIG fund is open to all Filipinos. It is normally mandatory for employees and if it’s your very first job, your employer may submit the membership form for you. They will automatically deduct it from your monthly pay.

The Fund is also open to self-employed individuals or business people, OFW, Private households, Barangay officials, Government Employees, etc.

How much is the monthly contribution?

The monthly contribution for Pag-IBIG fund members is P200.00.

If you are a private employee, you will notice that you will only be deducted P100.00 monthly because the P200.00 monthly fee will be divided between you and your employer. So the employer’s share is P100.00 monthly.

If you are going to pay this as a self-employed individual then you have to pay the full P200.00 as your monthly contribution.

Pag-IBIG Fund Interest Rates

As mentioned above your monthly contribution is actually your monthly savings. It’s like you are saving in the bank but you get to earn more than what the bank offers as interest to your savings account.

Here’s the historical interest rate of Pag-IBIG savings:

Year	Pag-IBIG Regular Savings Dividend
2022	6.53%
2021	5.50%
2020	5.62%
2019	6.73%
2018	6.91%
2017	7.61%
2016	6.93%
2015	4.84%
2014	4.08%
2013	4.17%
2012	4.13%

This table shows how much you can earn annually and you’ll notice that this is way better earning compared to your savings in the bank that normally earns .05% per annum.

When can I withdraw my Pag-IBIG Contribution?

The regular Pag-IBIG monthly savings will not be withdrawn anytime you want like your savings account.

You can withdraw your Pag-IBIG contributions under certain conditions. Here are the common scenarios for Pag-IBIG contribution withdrawals:

1. Membership Maturity – you can withdraw your total accumulated savings when your Pag-IBIG membership matures. This happens after a minimum of 20 years of contributions that is a total of 240 monthly contributions.
2. After Retirement– you can withdraw your contribution after retirement at age 60 (optional retirement age) or at 65 (mandatory retirement age)
3. Permanent Departure from the Philippines – foreign nationals who have contributed to Pag-IBIG can withdraw their contribution upon permanent departure from the Philippines.
4. Total Disability or Insanity – in cases of total disability or insanity, you can withdraw your TAV regardless of the number of contributions made.
5. Critical Illness or Terminal Illness – in some cases, members who are diagnosed with critical or terminal illnesses may be eligible to withdraw their Pag-IBIG savings. You can also be eligible to withdraw due to the critical illness of any of your immediate family members, as certified by a licensed physician.
6. Death Benefit – in the event of a member’s death, the beneficiaries can claim the deceased member’s Pag-IBIG savings.

It’s important to note that the specific requirements and procedures for Pag-IBIG contribution withdrawal can change over time, so it’s advisable to check with the Pag-IBIG Fund office or visit their official website for the most up-to-date information and guidance on how to proceed with your withdrawal request.

The application process and eligibility criteria may also vary depending on the circumstances, so it’s essential to understand the specific rules that apply to your situation.

Benefits of Pag-IBIG Fund Savings or Membership

Being a member of Pag-IBIG has several benefits that you may not be aware of. Most people would think that Pag-IBIG is only for taking a housing loan and that if you’re not interested in taking a loan then it won’t have any benefit for you.

This has been my thought before, nobody really explained all this to any of us when we get employed. I thought that Pag-IBIG would be of no use to me because I don’t have any plans of getting a loan. Then I learned about all the benefits of being a Pag-IBIG member.

So I just want to share these with you as well.

Savings and Dividend Earnings

As a Pag-IBIG member, your monthly contributions earn dividends. This is a very good way of growing your savings over time.

Pag-IBIG fund is also government owned so you have more security for your hard-earned money.

Housing Loan Eligibility

Pag-IBIG members can apply for housing loans to purchase a home, construct or renovate a property, or refinance an existing mortgage.

This makes owning a home possible for every Filipino even for minimum wage earners, because pag-IBIG can provide loans to all members as long as they have the capacity to pay. So, on your part, you have to make sure you are on top of your budget to be able to have an extra amount each month to pay your housing loan.

Also, the interest rates for Pag-IBIG housing loans are often lower than those offered by private lenders.

Short-Term Loans

Pag-IBIG is not just about housing loans like most of us think. The members can also avail of short-term loans, such as the Multi-Purpose Loan (MPL) and Calamity Loan, to address immediate financial needs.

The Pag-IBIG Multi-purpose Loan (MPL) is offered to members who may be in need of a fund due to an emergency. With MPL you can have the opportunity to access up to 80% of your Pag-IBIG Regular Savings.

Another loan you can avail of is the Calamity loan, you can avail of this loan if you experience disasters that will affect your family and if your area is declared under a state of calamity. This loan will help you and your family get back to your normal life as you fight these inevitable disasters.

Provident Savings

Pag-IBIG contributions form part of your provident savings, which can be withdrawn upon retirement, separation from employment, or after reaching a certain age. This provides financial security in the long run.

So imagine saving a small amount of money monthly but it will give you peace of mind knowing that you will have something in the future because we never know what the future brings.

That’s why it’s always good to have this kind of savings because you can’t withdraw it anytime you want.

Membership Loyalty Card (Pag-IBIG Loyalty Card)

Members can apply for a Pag-IBIG Loyalty Card, which can be used for various transactions and discounts, including pharmacy purchases, healthcare services, and more.

Pag-IBIG tied up with different banks to be able to offer this, so if you are a fan of discount cards then you can inquire about this in your nearest pag-IBIG office.

MP2 (Modified Pag-IBIG II) Savings

This is one of the benefits that I really love and have explored recently.

MP2 is another savings program you can start with Pag-IBIG that will also earn you more interest but it’s withdrawable in 5 years’ time so you can use it to be able to save more for your 5-year goal plans.

You can learn more about this in our guide to MP2.

How to become a member of Pag-IBIG?

To start your pag-IBIG membership, you can visit the nearest Pag-IBIG office and submit necessary requirements.

Pag-IBIG requirements:

Here are some of the requirements you may need to bring depending on your type of employment:

For Self-Paying (Waived Company)

• Certificate of Employment & Compensation
• Latest Payslip
• Company ID

For Self-Employed

• Latest Income Tax Return (ITR) with Financial Statement of the previous year certified by a CPA
• Certificate of Remittance/ESAV (for old members)
• Two 1×1 ID pictures
• SEC or DTI Registration (should be under the member’s name)
• Business Permit or Mayor’s Permit

For Overseas Filipino Workers (OFW) (For Reactivating Members only)

• Latest Contract of Employment
• Passport or any valid ID
• Latest and valid Contract of Employment (with POEA original stamp)
• Certificate of Remittance or ESAV
• Passport or any Valid ID/POEA license
• Two 1×1 ID pictures
• Special Power of Attorney (SPA), in case a representative shall submit the documents and pay the member’s contributions

For Self-Employed Professionals

• PRC/BAR License
• Latest ITR (previous year)
• Certificate of Remittance or ESAV (for old members)
• Two 1×1 ID pictures

For Unemployed Spouse (For Non-Working Spouse)

• Written consent from member-working spouse
• Certificate of Employment and Compensation of member-working spouse
• Affidavit of Unemployment

For Member-Spouse With Business:

• Latest Income Tax Return (ITR)
• Written consent from member-employed/working spouse
• Certificate of Employment and Compensation of member-working spouse (notarized)
• Affidavit of Unemployment
• Two 1×1 ID pictures

If member-spouse has own business

• Latest ITR (previous year)
• Business Permit or Mayor’s Permit
• SEC or DTI Registration

Conclusion

So there you have it, we have explored the intricacies of the Pag-IBIG Fund, and I hope you are able to understand more about the Pag-IBIG fund you are paying monthly. You can also read our guide on how you can pay your Pag-IBIG contribution so you won’t miss any of your payments.

For many, the deduction of monthly contributions may be a routine part of their employment, but understanding the benefits and potential of this fund is crucial.

The Pag-IBIG Fund is not just a deduction; it is an opportunity for financial growth, security, and prosperity.

By maximizing the benefits of your Pag-IBIG membership, you can pave the way for a brighter and more financially secure future.

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