PAG-IBIG. This government agency stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya, at Gobyerno. The main purpose of the agency is to provide affordable housing scheme through effective savings policy.
In August 27, 2009, the Home Development Mutual Fund Law or PAG-IBIG Fund Law (RA 9679) was passed and became effective thereafter, which aims to strengthen the agency’s ability to provide affordable housing schemes among others. The question now is how does this law affect OFWs?
Here are facts you need to know about the PAG-IBIG Fund Law of 2009:
RA 9679 has universal coverage, which means this covers all documented OFWs, both land-based and seafarers, which also aims to provide affordable housing opportunities to them. This means aside from the OWWA membership, all OFWs should also register with PAG-IBIG prior to date of departure. You will be given a Registration Tracking Number or RTN, which you will use when transacting with PAG-IBIG. Therefter, MID number will be given to you.
In case you weren’t able to register yet and you are abroad, there are PAG-IBIG posts located outside the Philippines located at the country’s respective embassies. You can check the locations here.
You can increase your voluntary contribution every month to yield bigger savings. Unlike before when you were limited to P100 per month, you can increase your monthly contribution as long as it does not exceed the cap prescribed by the PAG-IBIG Board of Trustees.
How much will you contribute? Two percent of your monthly income. Keep in mind that the higher the contribution, the higher the dividends will be. The best part is what you’ll get after 20 years is tax-free as well.
Unlike Filipino employers, foreign employers are not expected to give contributions to PAG-IBIG, unless they voluntarily do so.
Modified PAG-IBIG II Program
If you want to get higher dividends within a short period, then this program is recommended. Minimum monthly contribution is P500 and maximum amount is P5,000.
Dividend rate is higher compared to the ordinary contribution scheme, but the return of your money is higher as well.
Previous Contributions Made
Prior to the passage of RA 9679, OFWs were under the PAG-IBIG Overseas Program or POP and contributions were regularly made.
Don’t worry. Your previous contributions under POP will be carried over and remain under your name. Even if you changed employers, the money you saved will stay with you.
Keep in mind that POP contributions and contributions made under the new scheme will not be merged. The total accumulated value for both facilities will remain separate and there is a possibility that you can get your POP contributions earlier even if you haven’t reached the 20 years yet under the new scheme.
If you want to discontinue with the POP and transfer to PAG-IBIG I scheme instead, then you may do so as long as you do not have existing loans with the agency.
Payment of Contribution
Initially, you can do it in the Philippines during your registration. To ensure that you will be able to save no matter what happens, you can pay for your monthly contributions in the Philippine Embassy or Consulate in the country where you are assigned. The embassy allotted a desk specifically for PAG-IBIG wherein the person in-charge is authorized to transact.
Claiming of Contribution
You can get your Total Accumulated Value (TAV) after 20 years and after making 240 monthly contributions.
Nonetheless, there are exceptions to this rule. This includes:
- 15 years optional withdrawal provided 180 straight monthly contributions were made and you don’t have existing loan with PAG-IBIG.
- Claimant is 60 years of age.
- Mandatory retirement at 65.
- Transferring to another country permanently
- Total insanity or disability
- Loss of employment due to serious medical condition
You will receive the entire amount of your monthly contributions made plus contributions made by your employer (if any), and the dividends earned.
In case of Death
The total accumulated value will be given to your registered dependents. Nonetheless, PAG-IBIG will deduct a portion of this savings in case you have existing obligations with the agency. Aside from the money you contributed, PAG-IBIG will also provide death benefits for your family.
The amount may not seem a lot, but this could be a great help for you to start over in case you want to settle in the Philippines and retire for good.