Housing is a basic necessity. It’s a dream of our forefathers for every Filipino to have a roof on their head. But how can you afford it with soaring housing prices? And not all can afford a housing loan from the bank.
Republic Act 7835 created the “Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno” or PAG-IBIG Fund to serve as a Home Development Fund to serve this purpose.
It aims to provide affordable housing loans and investment opportunities to the average Filipino. What do you get from paying? Here’s a comprehensive list of benefits you can get from PAGIBIG as a remote worker or freelancer that you didn’t know about.
First, let’s talk about contribution payments. How much does it cost to enjoy PAGIBIG benefits? Luckily, it’s not as hefty compared to other government benefits.
For self-employed individuals, these are the rates.
Most likely, you will fall above 1,500 PHP. The maximum salary basis is at 5,000 PHP. With this, 200 PHP is the maximum deposit mandated. But if you want, you can opt to increase your contributions to enjoy the benefits.
Why contribute more, you ask? Your contribution to PAGIBIG is not an expense. It goes into your regular savings as an investment and is actually a good one.
Your money earns way more compared to the bank. Historically, regular savings from PAGIBIG makes roughly 4% to 8% per year. That’s more than twice the market rate. And it’s even higher than some investment vehicles.
PAGIBIG Provident Benefits
But then, you can’t withdraw your regular savings unless you qualify for the following scenarios under the PAGIBIG provident benefits.
- Membership maturity after 20 years or 240 months of contribution
- Retirement at 60 years old (optional) or 65 years old (mandatory)
- Permanent departure from the country
But there are also cases when you can withdraw because of medical reasons like:
- Total disability or insanity
- Separation from service due to health reasons
- Critical illness of the member or their immediate family member
- Withdrawable by legal heirs
Think about it as a growing fund that you can use for different purposes in the future.
But if you want a higher interest rate that you can enjoy in the medium term, you can opt for another investment option by PAGIBIG. It’s the Modified PAGIBIG 2 or PAGIBIG MP2.
PAGIBIG MP2 is an investment vehicle that will earn dividends per year based on the performance of the fund over a 5-year period. It’s like a time deposit with significantly higher interest rates.
Based on historical data, it ranges from around 4 to 8 percent. It even performed a 6.12% dividend yield despite the pandemic. It’s when almost all investment vehicles are struggling to maintain a positive percentage yield.
On top of that, it’s one of the safest investments in the Philippines because it’s 100%-backed by the government. Plus, it’s tax-free!
Here’s a sample computation for a simple monthly contribution to your MP2.
Based on the computation, you just have to deposit around 5-10k per month to get 500,000 PHP in 5 years. It might be pretty slow. But some don’t even have 500,000 PHP in their lifetime.
So if you want, it’s a safer way to grow your savings in the long term.
Multi-purpose Loan (MPL)
If you need money for emergencies like personal loans, can you get anything from PAGIBIG? You actually can by applying for a multi-purpose loan (MPL). You just need to have 24 months payment and the following requirements.
You can borrow up to 80% of your savings payable in 24 months for 10.75% interest. That’s quite affordable compared to standard loans outside.
So if you need immediate financial needs like medical needs, tuition fee increases, or additional capital for business, you can use PAGIBIG’s multi-purpose loan to your advantage.
PAGIBIG also has a type of loan for calamity-stricken areas. The calamity loan can be availed by individuals who are trying to recover from emergencies. You need at least 24 months’ of payments with the following requirements.
Take note, your area of residence should be announced to be under a state of calamity by the Office of the President or the Local Sanggunian.
You can borrow up to 80% of your savings for 5.95% per annum payable in 24 months. You have a grace period of 3 months before the start of payment.
Now for the best benefit of PAGIBIG. With your contributions, you can avail of a housing loan. And it’s not limited to purchasing a house. The loan can be availed of the following purpose.
- Purchase from Accredited PAGIBIG developer
- Purchase of Lot/Residential
- House Construction/Improvement
- Refinancing of a Loan
The loan percentage is about 5.5% per annum, subject to repricing after a year. And you can borrow as much as 6,000,000 PHP worth of loans, depending on your financial capacity. You can also use multiple housing loans as long as it doesn’t exceed 6,000,000 PHP.
If the amortization is too high, you can opt for 2 co-borrowers as well. There’s also the affordable housing loan for minimum-wage earners if you want cheaper interest and a longer payment term.
You just need to be an active member with at least a 24 months contribution with good credit standing. You should also be not over 60 years old upon application and not over 70 on the maturity of the loan.
PAGIBIG Mortgage Redemption Insurance
What if an emergency happens and you can’t pay anymore because you lost work? You can opt for PAGIBIG mortgage redemption insurance to secure your home from these cases.
The mortgage redemption insurance provides support for up to 500,000 PHP or a 20% reduction if ever you can’t pay anymore due to death and permanent disability.
Fire and Allied Perils Insurance
What do you do for emergencies you can’t control, like natural disasters? You can also avail of the Fire and Allied Perils Insurance. With the new service provider, you can enjoy protection for earthquakes, flooding, and other natural disasters for as low as 0.1686% of the appraised value.
That’s just 117 PHP for a 1,000,000 PHP loan. It also includes the following
- burial benefit of P5,000;
- rental allowance of up to P15,000 if the mortgaged home is damaged and becomes uninhabitable;
- family personal accident insurance coverage with an aggregate amount of P500,000;
- and sabotage or terrorism coverage of up to P150,000
It’s a nifty perk when you buy using a PAGIBIG loan.
PAGIBIG Loyalty Card
On top of the practical benefits above, you can also get lifestyle benefits when you enroll in PAG-IBIG’s loyalty card. With the loyalty card, you can get discounts from hundreds of establishments in the Philippines.
From beauty and wellness, transportation, education, and even restaurants. Some big fast-food chains even have occasional promos if you have one. So you’re not only saving for yourself. You can also enjoy your hard-earned money with exclusive discounts.
There you have it! What PAGIBIG benefit do you like the most? With the continuous growth of PAGIBIG, you are sure to love the services you can get. Cheer!