Hannah Mae Salac
BSA 1C
PAG-IBIG FUND as a Reliable source of retirement fund
“ The newness effect of a new thing wears off in nine months to a year, but financial security can last a lifetime.” -
Dan Buettner
Financial security provides every individual the drive for better living. If you are financially secured, things are always on a smooth run in your life but it does not mean that you won’t face any financial crisis, it helps you face financial crisis with ease and one institution where you can gain fianacial security is tha PAG-IBIG Fund, Pag-IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at
Gobyerno.It is also known as the Home Development Mutual Fund, If you want to buy a house but can’t afford the full sum, you can take out a loan from the Pag-IBIG Fund. Think of it as a nationwide paluwagan. But it’s not just for housing; it provides other sorts of loans for education and livelihood, financial assistance programs during calamities and medical emergencies, as well as savings programs. Despite of having a lot of security issues in some institutions here in the Philippines, should we approach PAG-IBIG Fund as a reliable source of retirement fund and invest or contribute more in your PAG-IBIG
Fund account?
If you’re a new employee you will probably noticed deductions from your monthly salary. One of the things that come with being newly employed is automatic membership
to the Philippine Home Development Mutual Fund (HDMF or more popularly known as the Pag-IBIG Fund). According to John (financial literacy advocate at Manic Investive) on the year 2015, The PAG-IBIG Fund itself was created in 1981 and follows 2 mandates;
First is that it force a savings scheme for all Filipino workers because it follows RA 9679, passed in 2009, every Filipino worker who earns at least Php 1000.00/mo should be a member of Pag-IBIG fund. The act mandates that both formally and informally (household helpers, jeepney drivers etc.) employed Filipinos should opt in and be a member of
HDMF. Second is it invest the pooled fund in housing and according to an agency protocol, 70% of PagIBIG’s investable fund should go to housing which is sustained through monthly member contributions and through the interests Pag-IBIG earns from the housing loans they provide.
There is also a program in PAG-IBIG Fund called Modified Pag-IBIG II program it is an easy way for OFWs to save from abroad apart from the monthly contribution to Pag-
IBIG as a member. “The Modified Pag-IBIG II (MP2) Program is an additional and voluntary five (5) year savings facility being offered by HDMF to its Pag-IBIG I members that will provide them with a yield higher than their Pag-IBIG I membership. MP2 is entirely for saving money with added bonus through flexible dividend rate. While if you become a
Pag-IBIG member, you can apply for a housing loan and save for retirement through the monthly contribution.” (Pwede padala Gal, 2018).
Furthermore, HDMF has also recently adjusted the requirements needed to get into the MP2 program, which may encourage more members to save through the investment scheme. Starting this July, the company has extended the program to retirees who may have other sources of income, as long as they have contributed for at least 24
months to Pag-IBIG prior to retirement. It has also waived the Php5,000 monthly gross income requirement for members who wish to become part of the program. (Lopez, 2018)
Pag-IBIG Fund CEO Acmad Rizaldy Moti said retirees, particularly those who previously served in the government, have become more interested in investment instruments that can help them earn money even after years of work. “We expect to exceed the 2017 figures, as more and more Pag-IBIG members opt to enroll with our voluntary savings program that is the MP2,” said Moti in a press release. “There’s a lot of clamor from retirees, especially those who retired from government service. They’re looking for savings mechanisms where they can grow the ir extra funds.”
From all of this related literature that is gathered from different sources we can conclude that PAG-IBIG Fund or Home Development Mutual Fund can be a strong and reliable source of retirement fund, not only that but it also offers additional investments even from those who are already retired but have their own source of income. It is a really great help specially to those who who are working over seas and also to those who don’t have much of an income. Even if it is mandatory and some peop le may feel like it’s such a waste and a bother because of the deductions in their monthly paycheck, still in the future they will appreciate it for it will help them earn money for the time when they are already retired or for some unexpected emergency and accidents. Financial security is really important and this is what every Filipino should practice,this is where PAG-IBIG
Fund will help them, how is it reliable? afraid that it might go down and all your earnings will be gone? Worry not because as mentioned above, the fund is government guaranteed and you can be sure that bank run won’t happen.
REFERENCES
C Velasco. (2012,August 17). Benefits of Becoming A Pag-IBIG Fund Member.
Retrieved from: http://www.pagibigfinancing.com/articles/2012/benefit-ofbecoming-pag-ibig-fund-members/
Coins.ph (2017,September 8). In Money Matters, Tips & Tricks. Retrieved from: http://coins.ph/blog/benefits-sss-philhealth-pag-ibig-membership/
EC Lopez. (2018, August 5). Make Your Money Work Harder: Pag-IBIG Fund's
Tax-Free Savings Plan Pays 8.1% p.a. Retrieved from: https://www.smartparenting.com.ph/life/money/voluntary-placements-double-forpag-ibig-s-tax-free-savings-plan-that-pay-8-1-p-a-sa00178-20180805-srcentrep?ref=footer_featured
John (2015, July 3). What is the Philippine Pag-IBIG fund for? Retrieved from: http://www.manicinvestive.com/personal-finance/fundamentals/what-is-the-pagibig-fund-for/
