A guide to Pag-IBIG benefits

A guide to Pag-IBIG benefits

Pag-IBIG or the Home Development Mutual Fund is a mandatory membership for employees in the Philippines. This includes Filipinos employed by foreign businesses based overseas notwithstanding their place of work whether in the country or abroad.


Members enjoy benefits in the form of loans and savings programs. They can claim the different types of loans at the same time, as long as they don’t exceed their capacity to pay. They also enjoy tax-free, government-guaranteed annual dividends.


Here’s a quick guide on Pag-IBIG benefits:


Provident Savings Program


A member’s monthly contribution is shared with the employer. The percentage paid by the employee depends on how much their contribution is. The member’s monthly payment and total annual dividend earnings make up for the Total Accumulated Savings (TAV).


Members can claim their Provident Savings Pag-IBIG I contributions after 20 years, only after they’ve made the 240 contributions. They can also claim their savings in the event of the following:

  • Retirement
  • Disability
  • Insanity
  • Termination from work because of health issues
  • Permanent departure from the country
  • Death


If the Pag-IBIG member dies before they could claim their Pag-IBIG I contributions, the benefits shall be given to their legal heirs. Said benefits include their TAV and a P6,000 death benefit.


The minimum monthly contribution for this Provident Savings is P200. For those who would like a higher TAV, they can pay up to P2,000. The higher the monthly contribution and dividends are, the more savings can be acquired.


Another type of Provident Savings is the Modified Pag-IBIG II (MP2). This voluntary five-year savings program requires a minimum monthly contribution of P500. The dividends in the MP2 have a higher earning rate than the regular Provident Savings program.


Housing loans


The Pag-IBIG End-user Home Financing Program is the most popular program benefit. The housing loan enables members to finance the purchase or construction of a home. It also covers home improvements and refinancing current loans.


The member can apply for a loan of up to P6,000,000 that is payable within 30 years with an interest rate of 5.5% per annum. To quality for this loan, the member must at least have 24 monthly contributions, have the necessary documents, and pass the background and credit checks.


The amount a member can borrow depends on their monthly contributions as can be seen by the table below:


Monthly contribution

Loan amount


P500,000 and below


P500,000 to P600,000


P600,000 – P700,000


P700,000 – P750,000


P800,000 – P900,000


P900,000 – P1,000,000


P1,000,000 – P1,100,000


P1,100,000 – P1,200,000


P1,200,000 – P1,300,000


P1,300,000 – P1,400,000


P1,400,000 – P1,500,000


P1,500,000 – P1,600,000


P1,600,000 – P1,700,000


P1,700,000 – P1,800,000


P1,800,000 – P1,900,000


P1,900,000 – P2,000,000


P2,000,000 – P2,100,000


P3,000,000 – P3,100,000


P4,500,000 – P4,100,000


P5,000,000 – P5,100,000


P5,900,00 – P6,000,000


The loan rates for this home loan program that amounts up to P6,000,000 carry an interest rate of 5.375% for each year.


Another type of loan is the Affordable Housing Program. This is for members in the lower-income bracket. Members can borrow as much as P750,000 for a 30-year repayment period. For loans of P580,000 and below, the Pag-IBIG Fund offers an interest rate of 3% annually.


To qualify for this loan, members should have made at least 24 monthly contributions, are not older than 65 years old, and have a gross monthly income of at least P17,500. They should also not have any previous Pag-IBIG Fund housing loans that were foreclosed, defaulted or cancelled.


Short-term loans


The two types of short-term loans under the Pag-IBIG Fund are the Calamity Loan and the Multi-purpose Loan. As the name suggests, the Calamity Loan is for members who were affected by flood, fire, volcanic eruption, and the like. Members can borrow up to 80% of their TAV. It is payable within 24 months and has a grace period of three months. It charges an interest rate of 5.95% per annum.


The Multi-purpose Loan, on the other hand, can be used for personal reasons like financing a small business, paying for medical bills, home improvement, travel expenses, and more. Just like the Calamity Loan, members can get up to 80% of their TAV and is payable within 24 months. However, there is no grace period for this loan and it has a higher interest rate of 10.75% per annum.


Pag-IBIG Loyalty Card benefits


With a Pag-IBIG Loyalty Card, members can enjoy numerous discounts, promos, rewards, and more when they shop at selected stores. Check out the full list of participating businesses and their offers here.


Help your employees know more about their Pag-IBIG benefits today. For more advice on employee mandated benefits, get in touch with FilePino by calling today at +1.806.553.6552 (USA) or +63.917.892.2337 (Philippines).