Building a future back home: Maximizing Pag-IBIG fund's benefits for OFWs

For many Overseas Filipino Workers (OFWs), savings and loans from the Pag-IBIG Fund are often a better option than traditional banks.

- By HENRY L. YAP, EUAP, FPIEP, EAROPH

Home Development Mutual Fund (HDMF) or Pag-IBIG Fund, the government's national savings and housing finance institution, offers a structured approach to converting income earned abroad into long-term savings, ultimately leading to the acquisition of a home to return to.

By comprehending these programs and their alignment with broader national housing and reintegration initiatives, OFWs can optimize the benefits they receive.

UNIVERSAL MEMBERSHIP, MEANINGFUL BENEFITS

Pag-IBIG Fund, under Republic Act No. 9679 or the HDMF Law of 2009, provides universal coverage to Filipino workers, both domestically and internationally. Today, over 1.6 million OFWs actively contribute to the Fund, expanding its membership base to over 16.97 million. This comprehensive coverage ensures that every Filipino worker, regardless of where they are based, has access to an institution dedicated to assisting them in building a secure and dignified life for themselves and their families.

Every contribution forms part of the Pag-IBIG Regular Savings, which earns annual dividends. As Pag-IBIG Fund is owned by its members, a portion of the net income is returned to them, reinforcing the cooperative principle that lies at the core of the program. For OFWs, this offers a disciplined approach to saving income in a pooled fund with a long history of stability. These savings can be withdrawn under specific conditions and also serve as a gateway to other benefits.

GROWING YOUR NEST EGG THROUGH MP2

Good financial planning involves finding a balance between risk, liquidity, and growth. Members can also join the MP2 Savings Program, a voluntary program designed to offer higher returns. With a minimum contribution of P500 and tax-free dividends over five years, the MP2 program has become a preferred, government-guaranteed savings option for OFWs with medium-term goals like education, livelihood, or buying or building a house.