How Pag-IBIG can help you get a home

Ezra Ferraz

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How Pag-IBIG can help you get a home
Starting with P100 monthly, here's how Pag-IBIG fund can help finance the home of your dreams

Every Filipino wants to own a home, but not every Filipino knows what resources are available to help them get there. One of the most valuable – yet also one of the most overlooked and misunderstood – is the Pag-IBIG Fund.

Many people have heard of Pag-IBIG, yet very few actually understand how it works. I’ve experienced this first-hand at my tech real estate company, ZipMatch. Every time we post an informational article about Pag-IBIG, we are flooded with inquiries from Filipinos wanting to know more about it. That there is such a demand points to the fact that Filipinos are keen on getting a home and learning more about what it takes for them to get there.

Pag-IBIG in a nutshell

Simply put, Pag-IBIG is a fund set up by the Philippine government to help more Filipinos acquire a home. Interested Filipinos can apply for Pag-IBIG membership through their official site. Once an individual is a registered member, he or she may eventually avail of a home loan of up to P6 million ($133,526.20)*.

This process may strike some readers as almost too good to be true. The truth is, you have to show your commitment by making small contributions to the fund yourself. Pag-IBIG members must contribute a minimum of P100 ($2.23) per month, which can be paid each month, while Overseas Filipino Workers (OFWs) have the additional option of paying a lump sum for the whole year. You can pay your contributions at a Pag-IBIG branch, a bayad (bills payment) center, an SM Business Center, or via salary deduction through your employer.

To put how little that amount is in perspective, P100 ($2.23) is less than the cost of a Jollibee meal, a movie ticket, or a Starbucks Frappuccino. Yet these contributions, no matter how small, earn dividends.

Whenever Pag-IBIG earns a profit, these profits are invested back into your fund, and in extension, to you. This is why Pag-IBIG recommends fund members to increase the amount of their monthly contributions to as much as you realistically can based on your budget, because the more you put in, the more you can receive when you withdraw your funds when you retire.

Luckily, the period necessary to avail of just a home loan is much shorter than the period it takes to withdraw from the fund. After two years of regularly making your monthly contributions, you can apply for a loan to help you get a home of their own.

For a quick explainer on how Pag-IBIG works, check out the video below:

Rappler business columnist Ezra Ferraz is also the chief content officer at ZipMatch, a tech company backed by Ideaspace Foundation, Hatchd Digital, IMJ Investment Partners, and 500 Startups. He brings you Philippine business leaders, their insights, and their secrets via Executive Edge. Connect with him on Twitter: @EzraFerraz

*$1 = P44.94

House image from Shutterstock

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