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Money Matters: Pag-IBIG Fund Provident Savings and Provident Claims

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Every member of the Home Development Mutual Fund — or anyone who desires to be one – should know that there are basically three types of benefits that are available to qualified members. They are the following:

1. Short-Term Loan — This is the Multi-Purpose Loan Program of the Pag-IBIG Fund that is payable in 24 months. The one thing that makes it unique is that the loan amount that can be granted to you is dependent on your “savings” with the fund. Let’s discuss the savings part in the succeeding paragraphs. A lot of people call it with many names such as personal loan, salary loan, cash loan, etc. It doesn’t matter what name you call it, you can use the proceeds anyway you want.

Click this link to know more about the Pag-IBIG Short-Term Loan Program.

2. Housing Loan — To many of its members, the Pag-IBIG Fund is almost synonymous with Housing Loan. This is a long-term home loan program that qualified members can tap in order to finance the purchase of a real estate in the Philippines. The article entitled Pag-IBIG Housing Loan 101 is a good place to start learning about this program.

3. Provident Savings — Your contributions to the Fund are like your Time-Deposit Account in the bank. It earns interest overtime and you can withdraw it, too. We’ve already mentioned a few things about this in the past article, but here we’ll elaborate more in this article, so keep reading.

Provident Savings — What Is And How It Works

Pag-IBIG Money Savings and ClaimsI searched for the meaning of the word “provident” and I got a good response. Provident (an adjective) means “making or indicative of timely preparation for the future.” Thanks Google, I don’t have to open my good old dictionary.

The meaning of the word “savings” should be easy, right? It is explained below.

Savings here refer to your membership contributions to the Pag-IBIG Fund. If you really think about it, that’s your own money that you “saved” with the fund. If you are locally employed in the Philippines, you know for a fact that your employer is also mandated by Law to contribute to your savings.

The Pag-IBIG Fund is one huge organization that pools together all the savings of all its members and invests that money by financing real estate development projects and mortgage loans which would eventually be beneficial to its members. As such, this money is expected to grow, or earn, over the course of time.

As a member, you must also be aware of the term Total Accumulated Value (TAV), which is your total contributions plus that of your employers (if you are employed) and the dividend earned by that money.

So essentially, Provident Savings is the TAV money which you can claim in some future time as a result of becoming a member of the Pag-IBIG Fund.

Provident Claims Or How To Withdraw Your Money

This part is exciting and irritating as well.

Here’s a minor irritation you have to deal with: you can’t just get your money anytime you need it. There are set guidelines on when you can apply for provident claims.

Here are the six instances when you are entitled to get your money from the Pag-IBIG Fund. The document requirements are also listed for each of the respective category of provident claims.

1. Membership Maturity – Regular members of the Pag-IBIG Program or the Pag-IBIG I can apply for provident claims upon maturity of their membership. Maturity here means having made an equivalent of 240 monthly contributions, so that’s roughly 20 years. (See the Basic Document Requirements below.)

Members of Pag-IBIG Overseas Program have their maturity date set from 5 to 20 years. They are advised to have their POP Passbook when applying for the provident claim.

2. Retirement – The retirement can be as early as 45 years old to the mandatory age of 65. The following are the important documents to bring:

  • Notarized Certificate of Early Retirement (For Private Employee, at least 45 years old)
  • SSS/GSIS Retirement Voucher or any two valid IDs
  • For AFP, Philippine Navy and Army Personnel (Any of the following: Order of Retirement, Updated Statement of Service, Statement of Last Payment )

3. Separation from the service due to health reasons

Important Documents:

  • Physician’s Certificate/Statement
  • Notarized Sworn Employer’s Certification that member was separated from the service due to health reasons
  • Latest SSS Disability Voucher (For Private Employee)

4. Permanent and Total Disability or Insanity

Important Documents:

  • Physician’s Certificate/Statement of Insanity
  • SSS Total Disability Voucher (If Private Employee)
  • For AFP, Philippine Navy and Army Personnel: ( Updated Statement of Service, Statement of Last Payment, Compulsory Disability Discharge Order)

5. Permanent Departure from the country

If you have another to call home and you finally said goodbye to the Philippines, here are some documents to prepare:

  • Notarized Sworn Declaration of Intention to Depart from the Philippines Permanently
  • Photocopy of Passport
  • Any of the following : Immigrant Visa, Residence Visa, Settlement Visa

6. Death

That dreaded word. Beneficiaries or heirs should prepare the following documents:

  • Member’s Death Certificate issued by NSO
  • Certification from Funeral Parlor
  • Notarized Proof of Surviving Legal Heirs
  • Notarized Affidavit of Guardianship (For children 18 years old and below, or physically/mentally incompetent)
  • Birth Certificate of all Children, if any, issued by NSO or Baptismal/Confirmation Certificate

To establish relationship with the deceased member, the claimant shall submit any of the following:

  • Member’s / Claimant’s Birth Certificate issued by NSO
  • Member’s Marriage Contract, if married, issued by NSO
  • Certified True Copy of Member’s/Claimant’s Baptismal/Confirmation Certificate
  • Certificate of No Marriage (CENOMAR) (For Single Only)

Basic Document Requirements

On top of the document requirements above, the following document should come handy:

  1. Duly accomplished Application for Provident Benefits (APB) Claim
  2. Two (2) valid IDs
  3. Updated Service Record (For government employees)
  4. Special Power of Attorney and two (2) valid IDs each of the Principal and Attorney-in-Fact (If member cannot claim personally)

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“Money Matters: Pag-IBIG Fund Provident Savings and Provident Claims” is written by Carlos Velasco.

Joining The Pag-IBIG Overseas Program — Is It Really Worth It?

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Did you know the difference between the Pag-IBIG Overseas Program and the regular Pag-IBIG Program, likewise known as Pag-IBIG I?

Most OFWs assume that since they are based overseas, they should be getting the Pag-IBIG Overseas Program, as they are now compelled to become members of the Pag-IBIG Fund.

Well, that’s not really the case.

Let me explain further by citing in part a message sent to us (via an article comment) by a site visitor who is an OFW based in Singapore.

I am an OFW since December 2008, and I stopped my contribution the same date. Last month, October [2011], I started to contribute again in one of your outlets here in Singapore. Since I Don’t know my Pag-ibig account no., they just gave me a new one temporarily. And they said its ok.. and can add up that to my old Pag-ibig account if i will activate the status of my old account…

1. Is it true?

2. How come? like for example if i want to avail a housing loan? you mean i need to wait for me to complete my ofw 24 months contribution?

3. Then hows my 4 years local contribution? is it like forfeited?

Actually I let my father follow up that today in the philippines. then one of the staff said that my local contribution is different from ofw and cannot combine it.. for me to have a housing loan.
what to do.?? please help. It’s so confusing po. thank you admin.

From that letter, let’s discuss the following topics as they relate to the Pag-IBIG Overseas Program and the regular Pag-IBIG membership a.k.a. the Pag-IBIG I.

  • POP vs Pag-IBIG I – Know the Difference
  • The past contributions

Let’s elaborate each of these subjects.

The Pag-IBIG Overseas Program vs The Pag-IBIG I – What’s the Difference?

You may not know it yet, but you can contribute to the Pag-IBIG Fund in the following manner:

  • Pag-IBIG I — This is the regular Pag-IBIG membership. During the inception of the Home Development Mutual Fund, this is the only membership type that’s available. As time passes, the program has grown to offer special service coverage for the Filipino workers based abroad. They rarely call it Pag-IBIG I now, but it got the name because the organization has introduced the Pag-IBIG II program.
  • Pag-IBIG II — This is a savings program, which is supposedly offering a higher rate on your money compared to the annual dividend earnings of your Pag-IBIG I money. You can only participate with Pag-IBIG II if you are a member of the Pag-IBIG I.
  • Pag-IBIG Overseas Program — Abbreviated as POP, this program was originally intended for the overseas Filipinos who wanted to become members of the Pag-IBIG Fund. This one is different and separate program from Pag-IBIG I.

(Related topic: Please check our previous article, which discusses in some details the POP Program.)

Pag IBIG Overseas program

However, since the passage of the Home Development Mutual Fund Law of 2009, where OFWs are already required to become members of the Pag-IBIG Fund, this program has been relegated to the side.

Important Tip: OFWs who are not yet members of the Home Development Mutual Fund should choose to enrol in the regular Pag-IBIG Program and not the POP. This is the only kind of membership required of you. With this program, you are already entitled to all of the benefits available to Pag-IBIG Fund members.

The Past Contributions

This scenario is very common: Before going abroad to work as an OFW, most Filipinos are already members of the Pag-IBIG especially those who have work experiences locally here in the Philippines. By the time they go overseas, they lose track of their membership and just forget about the whole thing — no more updated contributions; any existing Multi-Purpose Loan obligation is forgotten, etc.

If this is your case, remember the following:

  • All your past contributions to the Pag-IBIG Fund will stay there and will continue to accumulate dividend as the time passes, unless you happen to have an MPL Loan which you are not paying anymore.
  • Non-payment of your MPL puts a lien on your Total Accumulated Value (TAV) – that’s your money, contributions plus dividends. What will happen is that Pag-IBIG will use your TAV to pay for your personal loan. (That’s the reason why you are only granted a percentage of your TAV for your MPL loan.)
  • You can always activate your regular membership by contributing anew.

If you have some more questions related to this topic, please feel free to use the comment form below. We may have to update this article depending on the questions that we get.

The title of the article has raised this question: Is it really worth joining the Pag-IBIG Overseas Program?

What do you think? You be the judge. Make sure you also read the related articles cited as links on this article. Don’t hesitate to send us your opinions.

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“Joining The Pag-IBIG Overseas Program — Is It Really Worth It?” is written by Carlos Velasco.

Loaning With No Income Tax Return

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Here’s another letter that we’d like to share to every reader of this website. It’s about the use of the Income Tax Return as a requirement in applying for a Housing Loan. The letter is shown below.

“I want to become a member of [the] Pag-IBIG Fun. My question is, is it possible na maging voluntary member ako kahit wala akong ma-present na ITR [Income Tax Return]? Hindi kasi ganun kalaki ang kinikita ko eh.

“Hope you respond to this.

“Thank you so much.”

With reference to the letter presented above, we’ll limit the discussion on this article on the following points:

  1. Membership To The Pag-IBIG Fund
  2. Income Tax Return and Other Requirements
  3. Income Requirement

Locally employed individuals, freelancers, practicing professional, and operators of a small business in the Philippines who are interested about the Housing Loan Program of the Pag-IBIG Fund should pay attention to this article as we elaborate on the details in the succeeding paragraphs.

Mandatory Coverage

By now, you should be aware already that under the Home Development Mutual Fund Law of 2009, the following are mandated to become members of the Pag-IBIG Fund:

  • Locally employed Filipinos who are compulsorily covered by the SSS and the GSIS
  • Self-employed Filipinos with an income of at least P 1,000 / month
  • Overseas Filipino Workers
  • Filipino Seafarers
  • Uniformed members of the AFP, BFP, BJMP and PNP
  • Household helper earning at least P 1,000 per month

For these groups of people, there is no other choice but to become members of the Pag-IBIG Fund.

Voluntary Membership To The Pag-IBIG Fund

However, for the rest who also wanted to join as members, a Voluntary Membership to the Pag-IBIG Fund is available. If you should want to take this opportunity and become a voluntary member, take note of the following.

  1. You are self-contributing – That is, there is no employer counter-part to your membership contribution unlike the case for the locally employed members.
  2. Salary Deduction is NOT an Option – This should be obvious from #1 above.
  3. You may or may not be granted a housing loan. It’s important that you can demonstrate a proof that you are earning. More about this later.

(See also: Benefits of Becoming A Member of the Pag-IBIG Fund)

Income Tax Return and Other Document Requirements

Here’s a recap of the basic document requirements for the Housing Loan Application:

  • Housing Loan Application
  • Approved membership Status Verification Slip
  • Transfer Certificate Title / Condominium Certificate Title – Must be a certified true copy
  • Tax Declaration – Photocopy of the updated one
  • Location plan and vicinity map

In addition to the above documents, the following are also considered as basic requirements…

Housing Loan Document Requirements For The Self-employed or Business Owner

Now, if you happen to be a practicing professional (dentist, architect, accountant, etc), an owner / operator of a small business (more specifically a business structured as a single-proprietorship), or self-employed, the Pag-IBIG Fund says you need the following when applying for a Home Loan Program:

  • 1 year Income Tax Return (1 yr)
  • Audited Financial Statement
  • Official Receipt of Tax payment from the Bank, DTI Registration, Mayor’s Permit

As such, there’s no escaping the ITR for self-employed and voluntary members.

Housing Loan Document Requirements For The Employees?

For the locally employed, ANY of the following must be presented:

  • Notarized Certificate of Employment and Compensation (Pag-IBIG Format)
  • Notarized Certificate of Employment and Compensation (Employer’s Format) and 1 month latest Payslip/Payroll (certified by the employer)
  • Income Tax Return / Certificate of Tax Withheld (W2-Form 2316) and 1 month latest Payslip/Payroll (certified by the employer)

In other words, for the locally employed, the ITR is only optional. In lieu of that, you may use a Certificate of Employment and Compensation from your employer.

For a complete list of requirements, please visit this article.

Income Requirements

The letter sender above must a little bit worried about getting loan when she declared, “Hindi kasi ganun kalaki ang kinikita ko eh.”

Having a large income is certainly advantageous in almost any business dealings when you apply for a real estate loan. That is, a bigger income gives you a better chance of getting a bigger loan amount also; and therefore, a bigger house.

But take note, Pag-IBIG Fund was created to make it easier for the low- and mid-income Filipino families to own a decent home by gaining access to a housing loan program that offers a lower rate and longer payment terms compared to the other financing institutions like banks.

(See also: Income and Loan Amount Entitlement)

When buying a real property and financing it using the Pag-IBIG Home Loan program, the following tips should be helpful to you:

  • Determine Your Budget for the House – As much as possible, it should not exceed 30% of your combined household income.
  • Loan Term – How much is it going to cost you on a month to month basis if you will be paying the loan in 15 years, 20 years or 30 years?
  • Consider Getting a Co-Borrower – This must be avoided as much as possible. But if you really need that property, this is an option to take. (Follow this article for more options.)


“Loaning With No Income Tax Return” is written by Carlos Velasco.

How To Check If You Are Qualified For A Pag-IBIG Housing Loan

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“Am I qualified for a Housing Loan?”

This is a recurring question which appears on this website as comments under different articles with different topics. This article is intended to address that question once and for all and also show you some useful tips.

You can actually personally determine if you are eligible for a housing loan based on the following:

  • Your Pag-IBIG Membership
  • Your Age
  • Your Capacity To Pay
  • Other Pag-IBIG Loans

We’ll try to elaborate each one on the succeeding paragraphs.

Your Pag-IBIG Membership Status

You need to remember the following basic requirements for Pag-IBIG Fund Members.

  • You must be an active Pag-IBIG member for at least 2 years and has contributed a minimum of 24 monthly contributions.
  • Both the principal borrowers are subject to the above mentioned requirement.
  • Up to three Pag-IBIG Members may avail of a single housing loan (same collateral) provided they are related within the second civil degree of consanguinity.

Question: Can I pay 24 months one-time and then avail of the Pag-IBIG Home loan immediately?

Answer: Not anymore, the new Pag-IBIG Law of 2009 has changed the rule. But, you may still pay 24-months one time (Pag-IBIG will be more than happy to accept it) and wait for another 24 months to apply. (Other branches will allow you to wait for just 12 months.)

Pag-IBIG Financing Tips on Membership:

For the complete list of document requirements, please check this article.

Your Age

  • You must not be more than 65 years old at the time of loan application.
  • You must not be more than 70 years old at the date of maturity.
  • You must be insurable.

Advanced age really is a hindrance to getting a housing loan. And take note that this is true whether you are using Pag-IBIG or any Bank.

Pag-IBIG Financing Tip: If you can afford it, apply for a housing at a young age.

Your Capacity To Pay

Pag-IBIG Housing Loan InterestAs a general rule, your monthly amortization should not exceed one-third of your gross income. This is the rule used by many financial institutions when qualifying a loan applicant.

But when it comes to Pag-IBIG Financing, your monthly amortization (principal + interest) should not be more than 40% of your Net Disposable Income.

Actually, there is a table that you can use to determine much loan amount you can get given your income, contributions and loan term. To see the Table, please refer to the article on “How Your Income And Contributions Affect Your Housing Loan Entitlement”.

Pag-IBIG Financing Tips:

  • Have your finances in order by saving enough for the Down Payment (or Equity).
  • You need to show some proof of income. Prepare the following documents: Pay Slips, Income Statements, Employment Contract (with indicated salary).
  • Learn about the 5’s of Credit
  • If your income is insufficient, you may take on a relative (within the second civil degree of consanguinity) or your spouse and tack-in your contributions then apply for a housing loan.

Other Pag-IBIG Loans

  • You are only allowed one Housing Loan at a time. If you want to take another one, you have to pay your existing loan.
  • If you have previously availed of the housing loan, make sure that it was not foreclosed, cancelled, bought back, or subjected to dacion en pago.
  • If you have an outstanding Multi-Purpose Loan, your payments must be updated and it must not be in arrears at the time of application.

It is important that you take note of the information presented here before you apply for a housing loan from Pag-IBIG.

And if you are disqualified for some reasons, please remember that Pag-IBIG is not the only Home Financing option available. Or, you may want to try applying again in the future. Your loan application may be approved by that time.

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“How To Check If You Are Qualified For A Pag-IBIG Housing Loan” is written by Carlos Velasco.

How Your Income And Contributions Affect Your Housing Loan Entitlement

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In case you are wondering how much loan amount you are entitled, this article intends to address that.

By now, you should already know that the maximum housing loan amount Pag-IBIG can possibly grant to a member is P 3,000,000 while the smallest amount is only P 100,000. And the corresponding interest rate is actually shown at the Right Panel of this website.

Basically, there are two very important factors that affect the loan amount you will be entitled to:

  1. The amount of your contribution
  2. Your Net Disposable Income

Naturally, if you want to avail of a bigger loan amount, you need to increase your contribution and demonstrate that your Net Income is also large enough to cover the monthly amortizations.

These things are easier to understand with the following Tables.

Loan Entitlement Based On Pag-IBIG Contribution

Pag-IBIG Housing Loan Amount Based On Contribution

So looking at the table, if you need, for example, to get a loan amounting to P 2,000,000 your contribution should be P 950 / month. Now PhP 950 /month is easier for most Pag-IBIG Members. Quite frankly, there is no problem in that area.

Special Note to OFWs / POP Members: Since you are contributing in US Dollars, the table essentially means to need to contribute the US Dollar equivalent of that amount in Philippine Peso. As you know, there is a constant swinging of values between these two different currencies so there is also a corresponding adjustment.

Loan Entitlement Based On The Capacity To Pay

Take note of this part and this is very important.

According to the Pag-IBIG Fund Primer on Housing Loan, “A member’s loan entitlement shall be limited to an amount for which the monthly repayment on principal and interest shall not exceed 40% of the member’s net disposable income…”

In other words, the monthly amortization should be less than 40% of your net disposable income.

The following Table should guide you.

Pag-IBIG Housing Loan Net Disposable Income Requirment 1

Pag-IBIG Housing Loan Entitlement Based On Net Disposable Income

For example, if you are looking to get a PhP 1,000,000 loan and plan to pay it in 10 years (monthly amortization is P 12, 398.57 at 8.5% interest per annum), your net disposable income should be PhP 30,996.43 or higher (the higher the better).

So to avoid having problems paying for the property, that means you have to work backwards: Determine your net disposable income first, then buy a property based on the amount of loan that you can comfortably pay.

Let’s see if you really understand the Table shown above.

Question: You are planning to get a Pag-IBIG Housing Loan amounting to P 2,000,000 and pay it in 10 years. How much should your monthly income be?

Answer: Your monthly income should be P 67,467.50 or higher. And your monthly contribution should be P 950.

Additional Notes on Borrower’s Eligibility For Housing Loan

To be eligible for the housing loan, a member should:

  • Be a member for at least 24 months and has remitted at least 24 monthly contributions.
  • Be 65 years old or younger at the time of loan application.
  • Not be more than 70 years old at the maturity date of the loan.
  • Have no outstanding housing loan from Pag-IBIG.
  • Have no Multi-Purpose Loan in arrears at the time of housing loan application.
  • Have no Pag-IBIG Housing Loan that was foreclosed, cancelled, bough back or subjected to dacion en pago.

Related Articles To Check:

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This article on Income, Contributions and Loan Entitlement is written by Carlos Velasco.

Online Concerns: Housing Loan Applications, Membership Status And Contributions Inquiry, Etc.

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Most visitors coming to this website are Overseas Filipino Workers based from different places abroad. And many of them are asking about the online facilities of the Pag-IBIG Fund (the official website is at http://www.pagibigfund.gov.ph) so they can do some transactions anywhere they are comfortable. Some of the most common questions we encounter are listed below.

  1. I want to become a member of the Pag-IBIG Fund. Can I do it online? Do you have an online form that I can fill up and send back to you?
  2. Can I apply for A Housing Loan Online?
  3. May I request for my Pag-IBIG ID Number? Please send it through email.
  4. How will I know about my past contributions?
  5. Can I send my payments (contributions/amortizations) online?

Of course these are valid concerns as legitimate members of the Pag-IBIG Fund.

In this article, we’ll address each of these questions.

#1. Membership Application: I want to become a member of the Pag-IBIG Fund. Can I do it online? Do you have an online form that I can fill up and send back to you?

Yes, this is possible. Simply download Member’s Data Form. Print two copies and send back to the Pag-IBIG Fund.

While doing that is very convenient, the good ole way of actually handing it to the office is still best way to do it. That way, you get someone to give you an acknowledgment that your form has been received.

The most ideal way of doing it should be to just fill-up and online form — as opposed to downloading it — and waiting for a verification via email. Unfortunately, this one doesn’t exist yet. So, let’s make the best use of this one.

See also:

#2. Online Loan Application: Can I apply for A Housing Loan Online?

Just like the new member’s concern stated in #1, applying for a housing loan online still involves downloading an application form. Actually, there are other forms available on the website that are related to Pag-IBIG Loans. Here is one that you can use for the Housing Loan

The best way you can do with that form is to first study it. That should give you an idea of the documents and financial information required of you. Of course, the application will only be honored once submit it together with your signature.

Related Links:

#3. About Pag-IBIG ID: May I request for my Pag-IBIG ID Number? Please send it through email.

Sorry, but you have to personally go to the office and request for your Pag-IBIG ID Number. Please refer to #4 on how to best approach this concern.

#4. Contributions: How will I know about my past contributions?

You may want to proceed to the nearest Pag-IBIG Office and approach the staff that you want to consolidate all your contributions. You will then be given a form that you need to fill up.

The result of this might take some time especially for those who are transferring from one employer to another or those who have changed their memberships, say from employee to self-employed.
Please be patient and follow-up your inquiry at the concerned Department from time to time.

Once you get the result, you should be able to view a list of your contributions and that of your past employers. Plus, take note, the document should bear your Pag-IBIG ID Number.

See also: Your Money In Pag-IBIG Fund.

#5. Online Payment: Can I send my payments (contributions/amortizations) online?

Unfortunately, this is not possible yet. The closest way to accomplish this is to open an account with a Philippine Bank that accepts Pag-IBIG Payments. You can then arrange with the bank to execute an auto-debit setup from your account to Pag-IBIG Fund to pay for your contributions or obligations.

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This article is written by Carlos Velasco.