PAGIBIG. Definition and Benefits

One of the factors that Filipinos should focus on when preparing for a stable future is taking part in an investment, particularly through insurance. PAG-IBIG Fund, a social insurance for all employees, seeks to provide a national insurance program for low-cost housing meant for Filipino workers.

What is PAG-IBIG?

Home Development Mutual Fund, or mostly known as PAG-IBIG Fund (Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industrya, at Govyerno), is created by virtue of Presidential Decree No. 1530 on June 11, 1978, wherein Former President Gloria Macapagal Arroyo signed the HDMF Law of 2009 on July 21, 2009. This insurance program aims to provide its members with a better quality through affordable shelter-costs. PAG-IBIG membership is compulsary for all employees harnessed in these four facets of Philippine society: the financial institutions, industrial sector, the government, and the Filipino people. With this, PAG-IBIG seeks to address two of the nation's basic concerns—the generation of savings and provision of shelter for Filipino workers.

What are the benefits of PAG-IBIG?

Provident Savings Program

Included in the goals of PAG-IBIG is to “motivate the employed and other earning groups to save, with contributory support of the employers, through an integrated nationwide provident savings system”, From the word itself, “provident”, this program oughts to carefully save for the future in the financial aspect. Contributions made by members, together with the employer counterpart, are credited to his Total Accumulated Value (TAV). If a member contributes 2% of his monthly compensation, s/he doubles his/her savings immediately, with the addition of the employer counterpart contribution. On the other hand, if s/he contributes 1% of his monthly compensation, it triples his savings while the employer remains at 2%. With this, members' contributions are deduced from the gross income ahead to computation of the income tax. Additionally, the savings of each members earn annual dividends, which are tax-free; the dividend rate varies depending on the net income of the Fund at the end of the year.

Short Term Loans

Short-term loan programs aim to provide financial assistance to PAG-IBIG members, given that the the member to acquire such a benefit is active, and have already made at least 24 monthly contributions. Members may avail any of the two short-loan programs: First, the Multi-Purpose Loan Program, conceptualized and implemented to give immediate help regarding medical and educational purposes, minor home improvement, livelihood, purchase of appliance, medical, and other related needs. The other one, which is the Calamity Loan Program, is given to members who have been recently affected by calamities, as declared by the Office of The President or the Sangguniang Bayan, given that they will avail the loan within ninety (90) days. Should another calamity occur in the same area, a member may renew his/her calamity loan anytime; outstanding balances in his/her existing loan, including garnered interests, penalties, and charges, will be deducted from the proceeds of the new loan.

Access to Housing Programs

PAG-IBIG members can avail a housing loan under either the End-User Financing Program, or the Magaang Pabahay, Disenteng Buhay Program. In general, both covers the development and construction of low cost housing units in Metro Manila and highly urbanized cities, and socialized housing units in the provinces (as stated by PAG-IBIG). Both programs provide an affordable and socialized house and lot packages or condominium units, which could be for rent or for sale to low-income PAG-IBIG members who cannot afford the housing packages available in the market. With this, members can improve their sense of ownership and confidence, knowing full-well that their hardworks are direct investments made from their savings within the institution.

Aside from these, the institution also offers the PAG-IBIG Overseas Program, which is meant to give overseas Filipinos the opportunity to save for their future while investing to a housing loan as much as Php 500,000, wherein interest rates range from 9%-17% annually, depending on the loaned amount. A members can withdraw the total of his/her savings after 20 years of membership, and after accumulating the sum of 240 monthly contributions. However, a member who have retired, permanently departured from the country, and with total disability also allow members to withdraw his/her savings. For more information regarding PAG-IBIG Fund, you can check their website on or send them an electronic mail at You can also call their local number at 724-4244.

Mark Hugh Neri

Looking for financial planning workshop or for life and/or health insurance with investment options? Got questions related to personal finance? Feel free to message me at Money Gizmo (see link below)

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