What is Pag-IBIG Home Development Mutual Fund

Pag-IBIG Fund, officially named as the Philippine Home Development Mutual Fund (HDMF), is the prime government agency in charge of two things:  generation of savings and provision of affordable home or shelter financing to Filipino workers, both in the public and in the private sectors. It offers low and middle-income families access to short-term loans and low-cost housing programs so they can resolve short-term cash needs and realize the Filipino dream for a decent shelter.

Also Read: What is SSS? Social Security System Philippines

It was originally founded as a provident fund in June 1978 by virtue of Presidential Decree No. 1530 to encourage savings among Filipinos. It later evolved into a mandatory membership program before becoming a wide-reaching institution that covers savings and housing needs, among others. In this guide, we looked into the very core of Pag-IBIG Fund—from the agency’s history to the membership, benefits, and programs and services—and everything else that its establishment has done for the Filipino workers. 

What is Pag-IBIG

Pag-IBIG refers to Pag-IBIG Fund, officially known as the Philippine Home Development Mutual Fund (HDMF)—a government agency in the Philippines known for its role in the government’s national savings and housing programs for Filipino workers. 

Pag-IBIG is also an acronym that stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno—the four societal sectors at the very core of the agency which are essential in carrying out its mandate of providing its members with adequate housing through an effective savings scheme.

History of Pag-IBIG

Pag-IBIG started out as a provident fund managed by National Home Mortgage Finance Corporation (NHMFC) in 1978, when then-President Ferdinand E. Marcos signed the Presidential Decree No. 1530 in the midst of Martial Law to encourage savings among Filipinos. Needless to say, the program received a lot of opposition which detractors tagged as oppressive duplicate of the functions of Social Security System and Government Service Insurance System.

In 1980, the fund was made independent of the NHMFC and mandatory for all, with the signing of the improved law—Presidential Decree No. 1752. The law also established the government as trustee qnd guarantor for HDMF and set the mandatory 1-3% of contribution of no more than P3,000 per month salary base. It was later discontinued, before it resumed as a voluntary program under EO No. 90. Later, then-President Fidel V. Ramos signed the Republic Act 7742, resuming the mandatory nature of the agency. 

Through the years, the Pag-IBIG Fund has embarked on a successful bid in the financial market, enabling it to become a premier and globally competitive provident financial institution and a strong partner in realizing the Filipino workers’ dreams. It also introduced more special housing partnerships, rent-to-own programs, and other programs and projects, effectively addressing the needs of its members, particularly those at the bottom economic level, for affordable ways to homeownership.

In 2009, the new HDMF Law of 2009 (Republic Act No. 9679) was signed into law, effectively strengthening Pag-IBIG Fund capacity and authority, resulting in more resources for member dividends and home financing.

Mission, Vision, Corporate Values, and Objectives

Mission

Pag-IBIG’s mission has always been to generate more savings and accessible housing funds while practicing integrity, sound financial principles, and social responsibility for all Filipino workers.

Vision

As an agency, Pag-IBIG has always had a clear vision: To have every Filipino saving for decent shelter via Pag-IBIG Fund.

Corporate Values

Some of the core values that Pag-IBIG Fund strives to embody include: 

• Professionalism
• Integrity
• Excellence
• Service

Quality Policy

Pag-IBIG strives to sustain quality service by exercising the following quality policies:

• Committing to international standards in improving the rules and regulations of their Quality Management system they comply with.
• Enduring appropriate risk management measures to minimize risks and maximize opportunities
• Protect the confidentiality, privacy, integrity, and availability of member information
• Develop new ones and enhance existing services to cater to the growing needs of the members
• Maintain a productive and safe work environment for all employees
• Uphold transparency and accountability within the agency

Objectives

The Pag-IBIG Fund has been operating with the following goals and objectives:

• To offer low-cost and socialized house and lot packages or condominium units either for rent or for sale to low income Pag-IBIG members who cannot afford the existing housing packages in the market.
• To enable Pag-IBIG Fund to use its funds to offer decent and affordable condominium units as well as house and lot packages for sale to eligible Pag-IBIG Fund members.
• To stimulate competition that will bring about better housing packages in terms of price and development.
• To help solve the housing backlog problems by generating higher demands for housing through the provision of affordable condominium units and house and lot packages.
• To distribute nationwide economic opportunities generated from housing production equally while stimulating stable economic development.
• To provide an opportunity for Local Government Units (LGUs) to comply with R.A. 7279 (Urban Development and Housing Act of 1992) by identifying and providing land for socialized housing.
• To simplify and facilitate the processing of end-user financing for eligible Pag-IBIG Fund members.
• To develop further a sense of ownership, pride and confidence among members of the Fund, knowing fully well that the projects being constructed are direct investments made from their savings with Pag-IBIG Fund.
• To generate more membership to Pag-IBIG Fund.
• To develop and dispose of acquired properties of the Fund.

Benefits of Pag-IBIG Fund

Some benefits that members of Pag-IBIG may enjoy from their membership include:

• Housing Loan

This is, perhaps, the most popular program benefit that the Pag-IBIG Fund offers to its members. To offer affordable financing with lower interest rates for the housing needs of their eligible members, HDMF forges partnerships with local Real Estate Developers and arranges affordable loans of up to ₱6 Million to real estate buyers who are Pag-IBIG members.

• Short Term Loan

Just like the Government Service Insurance System (GSIS) and Social Security System (SSS), the HDMF also offers financial assistance to qualified members by granting short-term loans. To date, there are two types of loans that Pag-IBIG members are entitled to:

• Multi-Purpose Loan (MPL)

The Multi-Purpose Loan (MPL) program is a Pag-IBIG initiative meant to provide financial assistance to members who have made at least twenty-four membership savings with at least one contribution within the last six months. The loan can be used for either house repair, minor home improvement, home enhancement, tuition or educational expenses, health and wellness, livelihood; or other purposes. 

For members who have withdrawn their contributions due to membership maturity: The estimated date of the updated 24 contributions shall be the first month that the member is qualified to withdraw his MS due to membership maturity. 

If a member has an existing Pag-IBIG Housing Loan, multi-purpose, or calamity loan: The account must not be in default as of date of application. 

• Calamity Loan

For members affected by unforeseen calamities: Members are allowed to borrow up to 80% of their Total Accumulated Value (TAV) with an interest rate of 5.95% per annum, subject to the terms and conditions of the program. The Calamity Loan can be applied for in cases of flood, fire, tropical cyclones/ typhoons, volcanic eruption and other similar cases. Payment period starts on the 4th month following their check date.

• Provident Savings

Membership contributions made to Pag-IBIG fund becomes the member’s individual savings, which can be withdrawn upon reaching the maturity date. These contributions, along with their employer’s share, are also entitled to earn a dividend. All that money, called Total Accumulated Value (contributions plus dividend) can be withdrawn when it reaches maturity or 240 months of contributions for members who are at least 45 years old. Unlike the money in a bank regular savings where the interest rate is given, member’s earnings in the fund are not readily foreseen as this process is essentially equivalent to participating in a group investment scheme where member earnings depend on the overall performance of the investment.

• Pag-IBIG MPII

Launched In 2010, Pag-IBIG MPII, Modified Pag-IBIG II, or simply MP2 is a government-backed five-year voluntary savings program that offers a tax-free annual dividend higher than those of the mandatory, regular membership. Just like for provident savings, the dividend varies and is determined according to the fund’s financial performance. It has a minimal requirement of ₱500.00 and without any maximum capital ceiling through various payment channels or via salary deduction through employer arrangement.

Pag-IBIG Membership Qualifications

In 2009, Republic Act No. 9679, otherwise known as Home Development Mutual Fund Law of 2009, expanded the Pag-IBIG coverage requiring mandatory membership of all employees with an income or salary of at least ₱1,000.00. It also covers overseas Filipino workers (OFWs), Filipino immigrants, Filipinos naturalized in other countries, and permanent Filipino residents abroad.

Regular Membership Qualifications

Regular Membership to the fund is exclusive to all Filipino citizens who satisfy any of the following criteria:

• A private employee, whether permanent, temporary, or provisional who is not over sixty years old;
• A household helper or domestic worker earning at least ₱1,000.00 a month, including a driver, gardener, cook, governess, and other similar occupations;
• A Filipino seafarer upon the signing of the standard contract of employment between the seafarer and the manning agency, which acts as the employer together with the foreign ship owner;
• A self-employed person below sixty (60) years old, who engages in any trade, business or occupation, with a monthly income of at least ₱1,000.00;
• An expatriate below sixty (60) years old and is compulsorily covered by the Social Security System (SSS), regardless of citizenship, nature and duration of employment, and the manner by which the compensation is paid. In the absence of an explicit exemption from SSS coverage, the said expatriate, upon assumption of office, shall be covered by the Fund.
• All employees who are subject to mandatory coverage by the Government Service Insurance System (GSIS), regardless of their status of appointment, including members of the judiciary and constitutional commissions;
• Uniformed members of the Armed Forces of the Philippines (AFP), the Bureau of Fire Protection (BFP), the Bureau of Jail Management and Penology (BJMP), and the Philippine National Police (PNP);
• Filipinos employed by foreign-based employers, whether they are deployed locally or abroad or a combination thereof.

Voluntary membership Qualifications

Membership is also extended to individuals who are at least 18 years old but not more than 65 years old under their voluntary membership program, provided that they comply with the following set of rules and regulations for Pag-IBIG members including the amount of contribution and schedule of payment. In addition, they shall be subject to the eligibility requirements in the event of availment of loans and other programs/benefits offered by the Fund

The following shall be allowed to apply for voluntary membership:

• Non-working spouses who devote full-time to managing the household and family affairs, provided that the employed spouse is a registered Pag-IBIG member and consents to the Fund membership of the non-working spouse;
• Filipino employees of foreign government or international organization, or their wholly-owned instrumentality based in the Philippines, in the absence of an administrative agreement with the Fund;
• Employees of an employer who is granted a waiver or suspension of coverage by the Fund under RA 9679;
• Leaders and members of religious groups;
• A member—pensioner, investor, or any other individual with passive income or allowances—separated from employment, local or abroad, or ceased to be self-employed but would like to continue paying his/her personal contribution. 
• Public officials or employees who are not covered by the GSIS such as Barangay Officials, including Barangay Chairman, Barangay Council Members, Chairmen of the Barangay Sangguniang Kabataan, and Barangay Secretaries and Treasurers;
• Such other earning individuals/groups as determined by the Board rules and regulations.

Requirements for Pag-IBIG Membership

Here are the requirements when applying for a Pag-IBIG membership:

• Filled up Members Registration Form (MRF)
• Present original or photocopy of a valid government iD or any of the following:
  • Philippine Passport 
  • NRIC 
  • EPass 
  • SPass 
  • Work Permit

Application Procedures for Pag-IBIG Membership

To become a Pag-IBIG member, you must:

• Visit the Virtual Pag-IBIG portal at the Pag-IBIG Fund website.
• Click the “Create Account” button. 
• Choose how to create your account from the following options:
  • Via your Pag-IBIG Loyalty Card Plus; 
  • Via Online Activation; or. 
  • Via Account Creation for Overseas Filipino Workers (OFWs)

Pag-IBIG Programs and Services

Some Pag-IBIG programs and services available to members include:

• Membership and Savings Program
  • Membership ID (MID)
  • Regular Savings
  • MP2 (Modified Pag-IBIG 2)
  • Membership for Overseas Filipino Workers (OFWs)
• Housing Loan
  • Pag-IBIG Housing Loan
  • Pag-IBIG Home Equity Appreciation Loan (HEAL)
  • Affordable Housing Loan for Minimum-Wage Earners
  • Home Saver Programs
  • Acquired Assets
• Short-Term Loans
  • Multi-Purpose Loan
  • Calamity Loan
• Other Services
  • Pag-IBIG Savings Claim
  • Loyalty Card Plus
  • Virtual Pag-IBIG
• e-Services
  • Membership
    • Membership Registration
    • Kasambahay Membership Registration
  • Housing
    • Housing Loan Payment Viewer
    • Housing Loan Online Application
    • Developer’s Online Housing Loan Application
    • Application for Housing Loan Interest Repricing
  • Other Services
    • Online PaymentFacilities
    • MP2 Savings Enrollment
    • Electronic Submission of Remittance Schedule (eSRS)

Pag-IBIG Frequently Asked Questions

Here are some common questions and answers related to Pag-IBIG Fund.

1. Who should register with the Pag-IBIG Fund as members?

According to Republic Act No. 9679, membership to the Pag-IBIG Fund shall be mandatory for the following:

• All employees, workers, professionals, officers and companies who are compulsorily covered by the SSS and GSIS
• Uniformed members of the Armed Forces of the Philippines (AFP), the Bureau of Fire Protection (BFP), the Bureau of Jail Management and Penology (BJMP), and the Philippine National Police (PNP);
• All members of the judiciary and constitutional commissions
• Overseas Filipino Workers (OFWs)
• Filipinos employed by foreign-based employers, whether deployed locally or abroad.

2. How much is the Pag-IBIG contribution?

The minimum initial monthly contribution is ₱200.00.

3. What are the benefits of being a member of the Pag-IBIG Fund?

All Pag-IBIG members may enjoy the following benefits:

• Total Accumulated Value (TAV) or Savings
• Annual dividends earned from the net income of the Fund at yearend.
• Portable membership savings
• Short-term loans
• Housing loan of up to ₱6 Million

4. When can a Pag-IBIG member registered under the Mandatory Coverage (Pag-IBIG 1), withdraw his/her contributions?

A member may claim his Total Accumulated Value (TAV) after 20 years of membership with the Fund or after having made a total of 240 monthly contributions.

A member may also withdraw his savings before the 20-year maturity under these valid grounds:

• Retirement
• Permanent departure from the country
• Permanent or total physical disability
• Insanity
• Death of the member
• Termination from service by reason of health
• Optional withdrawal after 10 or 15 years of continuous contributions

5. What proof should I present on applying for OEC?

• Valid Pag-IBIG Fund receipt or
• Receipt made to Pag-IBIG-accredited collecting agent / bank.

Note: Members must present receipt of latest monthly contribution matching the month they need the OEC for. (e.g Pag-IBIG member will get OEC for the month of July, he/she must present a receipt paid for the month of July).

Summary

Compared to other government-mandated benefits, Pag-IBIG Fund doesn’t seem important enough to merit religious payment of contributions. However, it is still yet another attempt from the Philippine government to make things easier for the Filipino workers, especially those who are working farther away, in one of the many countries which offer better compensation packages.

Pag-IBIG offers easy registration, minimal requirements, and easy-to-apply loan programs and other services in an attempt to be helpful to Filipino workers and keep up with its mandate.

Contact Information

In case you have more questions or concerns related to Pag-IBIG Fund, you may reach out to them via the following:

Pag-IBIG Fund (Home Development Mutual Fund)

Corporate Office Address: Petron Mega Plaza, # 358 Sen. Gil J. Puyat Avenue, Makati City

Pag-IBIG Mailing Address: 2nd Flr, JELP Business Solution Center, 409 Shaw Boulevard, Brgy. Addition Hills, Mandaluyong City, Philippines

Phone Number: (02) 8-422-3000

Pag-IBIG Fund 24/7 Hotline: 8-724-4244 (8-Pag-IBIG)

Email Address: contactus@pagibigfund.gov.ph

Pag-IBIG Official Website: http://www.pagibigfund.gov.ph