Pag-IBIG Regular Savings: What You Need to Know

The Pag-IBIG regular savings is one of the most overlooked investment vehicles by Filipinos. Most people think that the mandatory contribution is simply a requirement in order to be able to get a housing loan. But do you know that the monthly 100-peso mandatory Pag-IBIG contribution deducted from your monthly salary is actually held in a savings program which are earning dividends annually?

Surprised? I was too. In fact, I only found out about it last year. If I had known at an earlier time, I would have added more than the minimum 100-peso monthly contribution.

Let’s get to know more about the program, shall we?

Who is mandated to contribute?

If you are employed in the Philippines and your employer is registered with Pag-IBIG, you are mandated to contribute to the Pag-IBIG Regular Savings program. The monthly contributions are deducted from your salary, and your employer is required to match your contributions.

Can anyone contribute voluntarily to the Pag-IBIG Regular savings program?

Yes, even if you are not mandated to contribute, you can still enroll in the Pag-IBIG Regular Savings program and contribute voluntarily. This is a great option for freelancers, self-employed individuals, and OFWs who want to save for their future. Registration can be done online.

How much is the monthly contribution?

The monthly membership savings for Pag-IBIG Regular Savings is PHP 100, and if you are an employee, your employer is required to match your contribution. This means that the total monthly contribution is PHP 200.

Benefits that you get as a member of the Pag-IBIG Regular savings program

By contributing to the Pag-IBIG Regular Savings program, you can enjoy several benefits, including:

1. Dividend earnings – Pag-IBIG declares annual dividends based on its income from housing loans, investments, and other income-generating activities.
2. Savings accumulation – Your contributions to the Pag-IBIG Regular Savings program earn interest and help you accumulate savings for your future needs.
3. Housing loans – If you have been a member of the Pag-IBIG Regular Savings program for at least 24 months, you can apply for a housing loan to purchase a house and lot, townhouse, or condominium unit.
4. Short-term loans – Pag-IBIG members can also apply for short-term loans for their immediate financial needs, such as home repairs, education, or health emergencies.

How much are the annual dividends?

The yearly dividends of the regular Pag-IBIG savings program have a 5-year average rate of 6.47% which is higher than what you can get from a commercial bank.

Can I top up my monthly contribution?

Yes, you can. Albeit, your employer is only required to match your mandatory monthly membership savings of Php100 and is not obligated to match any additional top-up contributions you make. The employer’s counterpart contribution is limited to Php100 per month.

For employed members, you can top up your monthly savings through your employer by submitting a “Request for Upgrading of Savings” form to your employer.

That said, if you’re considering topping your monthly contribution by 500 pesos or more, it would be best to consider Pag-IBIG MP2 instead.

How much are you expecting to get?

Let me show what my current account looks like.

Not much, eh? Take note though that there are no top-ups made to my Pag-IBIG regular savings account. So the only contribution I made is a total of Php18700 out of the Php100 deducted from my salary monthly for 187 months.

If you do the math, I only put in 1/3 of the total savings that I’m about to get. The bulk of the savings is from the combined employer share and dividends. Can you imagine if the monthly mandatory contribution was supposed to be Php200? This is why I’m actually ecstatic about the news regarding the increase in monthly Pag-IBIG contributions since employers will also match the amount that we’ll be required to put in.

When can you get your accumulated Pag-IBIG savings?

As mentioned earlier, that 100-peso monthly contribution is actually something you can withdraw and use. You don’t even have to wait for the retirement age to be able to take it out. You are eligible to withdraw your Pag-IBIG Regular Savings under certain conditions, which include:

• Membership maturity which is equivalent to 240 monthly contributions
• Retirement at either the optional age of 60 or the mandatory age of 65
• Retirement under a private employer’s provident/retirement plan (should be at least 45 years old at the time of retirement)
• Optional withdrawal for those who have 180 continuous monthly contributions (there should be no gap between contributions)
• Separation from service due to health reasons
• Permanent departure from the country
• Permanent and total disability or insanity
• Critical illness of the member or an immediate family member, as certified by a licensed physician
• Member’s death, in which case the member’s legal heirs will receive the total Pag-IBIG Regular Savings, plus an additional cash benefit of up to P6,000.

In conclusion, the Pag-IBIG Regular Savings program is a great way to save for your future, especially if you plan to purchase a house or need financial assistance for emergencies. As a member, you can enjoy several benefits and earn dividends on your contributions. Compared to other investment vehicles, this is a lot easier on the budget. So for self-employed individuals and OFWs, you definitely would want to consider this.