What is the Meaning of Pag-IBIG – Home Development Mutual Fund

Pag-IBIG Fund, or the Home Development Mutual Fund, is a government-owned and controlled corporation in the Philippines. It was created on June 11, 1978 to help Filipinos achieve the dream of homeownership. The fund provides housing loans to members, as well as other services such as insurance and savings.

Also Read: What is the Meaning of PhilHealth – Philippine Health Insurance Corporation

Pag-IBIG is one of the biggest housing loan providers in the Philippines, and has helped countless Filipinos realize their dream of owning a home. Many Filipino workers choose to Pag-IBIG because it offers lower interest rates and longer payment terms than most banks.

If you are a Filipino worker, you can become a Pag-IBIG member by signing up at your employer’s human resources department, or online at the Pag-IBIG website. Once you are a member, you will start contributing a small amount of your monthly salary to the Pag-IBIG Fund. These contributions will be used to help you get a housing loan when you need it.

meaning of pagibig philippines


A government agency that is meant to help Filipino workers achieved their lifelong dreams – Pag-IBIG. If you are an employee, maybe you are already part of this membership program by the government.

The Home Development Mutual Fund (HDMF), also known as the Pag-IBIG (Pagtutulungan sa Kinabukasan, Ikaw, Bangko, Industriya at Gobyerno) Fund, is a government-owned and controlled corporation that is in charge of giving chance to Filipinos to get into national savings program and affordable housing through their financing.

Pag-IBIG was established on June 11, 1978 under the presidency of Ferdinand E. Marcos in response to national demand for a savings program and affordable housing financing.

What is Pag-IBIG

Pag-IBIG is an abbreviation which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno.

Purpose of Pag-IBIG

Its original purpose was simply to encourage every Filipino to save. It was managed by the National Home Mortgage Finance Company (NHMFC) in 1979, a government organization that was trusted to boost the availability of home loans to Filipino workers.

About this Agency

The HDMF, also known as the Pag-IBIG Fund, was founded in response to the need for a national savings program and affordable housing financing for Filipino workers. The Fund was established on June 11, 1978, by Presidential Decree No. 1530. President Marcos believes that the Pag-IBIG Fund meets two essential needs of the country and its people. Under the stated law, the Fund was administered by two agencies.

Private employees’ funds were handled by the Social Security System (SSS), while government workers’ savings were handled by the Government Service Insurance System (GSIS).

Functions and Responsibilities

  • To give low-income Pag-IBIG members who cannot afford market housing packages with the low-cost and socialized house and lot packages/condominium units for rent or sale.
  • Encourage competition, which would result in better housing packages in terms of price and development, benefiting not only Pag-IBIG Fund members but also the general public.
  • To enable Pag-IBIG Fund to carry out its mandate by selling excellent and affordable condominium units, as well as home and lot packages, to eligible Pag-IBIG Fund members throughout the Philippines.
  • To boost participation in the Pag-IBIG Fund.
  • To develop and sell the Fund’s acquired properties.
  • To help alleviate the housing shortage by raising demand for homes through the provision of affordable condominium units and home and lot packages.
  • To instill a sense of ownership, pride, and confidence in Fund members, who are fully aware that the projects being created are direct investments made from their savings with the organization.
  • To spread equitably the national economic potential generated by house construction while simultaneously stimulating the stability brought about by economic development.

List of Pag-IBIG Programs

Here’s a list of programs under Pag-IBIG:

MP2 (Modified Pag-IBIG 2 Savings)

The MP2 Savings Program is a voluntary savings plan for participants who want to save more and earn better returns than the ordinary Pag-IBIG Savings Plan. This is for active Pag-IBIG Fund Members and former Pag-IBIG Fund Members with a monthly income and/or Pensioners of any age with at least 24 months of contribution.

Your MP2 Savings will yield larger dividends than the normal Pag-IBIG Savings Program. The dividends you will get are tax-free. All dividends will be calculated using no less than 70% of the Pag-IBIG Fund’s annual net income. On the other hand, the three-year average dividend rate for MP2 is 6.96 percent.

Membership of Overseas Filipino Workers (OFW)

Overseas Filipino Workers (OFWs) is also covered by Pag-IBIG Fund membership since 2009. This is also the reason why POEA was appointed to assist OFWs who are members of Pag-IBIG. They are the ones who process the Pag-IBIG contributions of OFWs

OFW members have access to Pag-IBIG services such as dividend savings, short-term cash loans, and low-cost house loans. These programs will truly help OFWs during the time they are working overseas and even after they return to the Philippines.

Housing Loan

The Pag-IBIG Fund Housing Loan allows you to borrow up to P6,000,000 at a very low-interest rate.

Who are eligible for these programs:

  • At least 2-year membership savings.
  • Age of not more than 65 years at the time of application and not more than 70 years at the time of loan maturity;
  • Ability to pass sufficient Pag-IBIG Fund background, credit, and job/business checks;
  • Legal ability to encumber real estate;
  • The borrower must not have any existing Pag-IBIG Short-Term Loan (STL) arrears at the time of the loan application.
  • No Pag-IBIG Housing Loans that have been foreclosed, canceled or repurchased owing to default.
  • If you have an existing Pag-IBIG Housing Loan as a principal buyer/borrower or co-buyer / co-borrower, you must update your account.

The Pag-IBIG Housing Loan can be used to finance any or all of the following:

  • Purchase of a completely developed residential lot or contiguous residential lots measuring no more than 1,000 square meters;
  • Purchase of a single-family home and land, a townhouse, or a condominium unit; used or brand-new units,
  • A property financed by the Pag-IBIG Fund; or adjoining house and lots/townhouses/rowhouses/condo units
  • The construction or completion of a residential unit on a residential lot held by the borrower or a borrower’s relative;
  • Home enhancement and refinancing of an existing home loan, provided that the borrower has been making regular payments on the loan’s amortizations for the last six (6) months.

Short-term Loans

Short-Term Loan (STL) The Multi-Purpose Loan (MPL) of the Pag-IBIG Fund is a cash loan meant to assist our members with any emergency financial need. A member can borrow up to 80% of their Pag-IBIG Regular Savings, and the loan can be completed in as fast as 2 days!

Frequently Asked Questions

Here are some common questions and answers about this department:

1. Is Virtual Pag-IBIG associated with Pag-IBIG Fund?

The Virtual Pag-IBIG is a Pag-IBIG Fund online platform made to assist its members safely and conveniently. As a member, you can navigate the website and your Pag-IBIG Fund’s services using your smartphone or computer.

There is also a 24/7 chat support service called Lingkod Pag-IBIG, wherein a service officer will give answers to all your queries and concerns. So if you’re an employee, no need to go to the branch personally and sacrifice your one-day salary. If your question can be assessed online, the officer will tell you what are the steps you need to do.

2. How much can I borrow in Pag-IBIG Housing Loan?

Answer: Members can borrow up to P6,000,000. However, it will be based on the following:

  • Your actual requirement
  • The loan amount you desire
  • The loanable amount depends on your ability to repay; and Loan-to-Appraised-Value (LTV) ratio

3. Can I get my MP2 Dividends on a monthly basis?

Answer: You can receive it annually through your MP2 Dividends credited to your savings or checking account with the Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP). MP2 Dividends will be released through a check payable to the MP2 Saver to members who choose annual dividend pay-out but do not have a Philippine bank account, particularly abroad members.

4. How to create a Virtual Pag-IBIG account?

You don’t have to be a techie to sign up for a Virtual Pag-IBIG account. It’s just like you’re signing up for an Email or a Facebook account.

Simply go to the Pag-IBIG Fund website, click the “Create Account” button, and select one of the following options to create your account. (Through your Pag-IBIG Loyalty Card Plus, Through online activation, Through Overseas Filipino Worker’s Account Creation.)

5. Does the Pag-IBIG Housing Loan have insurance?

Yes. Your Pag-IBIG Housing Loan will be protected by an insurance policy. It can be Mortgage Redemption Insurance (MRI), Sales Redemption Insurance (SRI), or Fire and Allied Perils Insurance (FAPI).

6. How do I apply for a Pag-IBIG Housing Loan?

Apply for a Pag-IBIG Housing Loan by just submitting your completed form and designated requirements to any Pag-IBIG Fund branch. You can also submit your application and requirements to the certified partner developer where you want to purchase your new property.

7. Where is my money invested by Pag-IBIG?

Pag-IBIG Fund invests at least 70% of its investible funds in housing finance. The Fund also invests in government securities, term deposits, and corporate bonds.


Pag-IBIG Fund has been shown to be the Filipinos’ best friend. Imagine, if you’re just an ordinary employee with a minimum salary rate and you wish to have your own house – this is a big help. Pag-IBIG was one of the most dependable agencies of the government particularly during the COVID-19-related difficulties in 2020 up to this moment.

With its receptivity to the requirements of its members as well as its stakeholders, through suitable programs and initiatives benefits have been supplied and will continue to be delivered. They have the ability to help the country and each Filipino cope with the pandemic’s consequences.

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