ONE of the reasons which drives a Filipino out of his country to venture into foreign land is the desire to earn more so he could build or buy a house. Majority of these overseas Filipino workers (OFWs), in fact, aim for a “dream” house and most, after three years or more of working abroad, will find themselves living in a place they can really call their own.
Depending on the income of a particular OFW, a house bought or built, could either be financed personally or financed by a lending institution. In the latter case, an OFW may need to face the obligation of repaying the housing loan taken for a number of years ensuing. As most of these workers earn more than their counterparts in the Philippines, they usually opt for the shortest period available for repayment. Once fully paid, a few others may even buy another house in a different place.
Now, among the OFWs themselves, there are those whose positions and salaries received are lower and lesser than the others. These workers either can’t afford outright to buy or build a house on their own or qualify for a housing loan. As most of the lending institutions available to the OFWs before were leading banks in the Philippines, the more difficult it was for the low-income group to avail of a housing loan. This is no longer the case nowadays though and workers who earn less than US$1,000 can now fulfill their dream of owning a house!
This is made possible through the Philippine government’s Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund. Before the introduction to OFWs in the early 1990s, Pag-IBIG Fund was available only to both government and private employees in the Philippines. Created June 11, 1978, through Presidential Decree No. 1530, the Fund, since then, has gone through a number of changes, including a suspension during the time of President Corazon Aquino. Controversy was then focused on whether to make the fund mandatory or voluntary. This was eventually solved with Republic Act No. 7742, signed by President Fidel Ramos on June 17, 1994, making membership with the Fund mandatory for “all employees covered by SSS and GSIS and their respective employers.”
In 1991, membership coverage was extended to the overseas Filipinos through the Fund’s Filipino Overseas Workers (FilOW) Program, which is now more popularly known as Pag-IBIG Overseas Program (POP). It was first introduced in October 1991 in Rome, Madrid and Athens. It stood ground after it was launched in Hong Kong in January 1992 and as a result, a FilOW Task Force at the head office was created to oversee the activities and make necessary representations with pertinent government offices and financial institutions. By December 1992, Pag-IBIG Fund reached OFWs in the Middle East. Because of the increasing demands of members and would-be members, Fund representatives were sent to embassies and consulates abroad where there are large concentration of OFWs.
Membership to the Fund is voluntary for the OFWs. A minimum monthly contribution of US$20 is set for those earning less than US$1,000 and US$40 for those drawing a salary of over US$1,000. In order to avail of a housing loan, a member has to be a regular payee for at least six months and must have had 12 monthly contributions at the time of loan application. Those earning less than US$1,000 can enjoy a loan of P250,000 while those earning more can borrow up to P500,000. Loan is payable either within a five-year or a ten-year period with an interest of 9% to 17% per annum, depending on the amount borrowed and time of repayment chosen.
The good thing about Pag-IBIG Fund is that your monthly contributions, which earn a 3% interest per annum, remain intact until the specified time of withdrawal. A member is given two options for payment: five and 10 years of monthly contributions. Regardless of whether you avail of a housing loan or not, or whether you continued with your monthly contributions or not, you’ll be able to get your money at the end of your chosen period. It is just as you have saved your money in the bank and you will be happy to know that the contributions you’ve made have helped your co-OFW fulfill his or her cherished dream of owning a house!
I urge you strongly to enlist yourself as a member now and either fulfill your dream of owning a house or help others find the answer to their ardent prayers of going home one day to a house of their dream! I am a member, myself, and in fact, into my second membership already. Last April, I’ve finished five years of paying contributions to the Fund, although I didn’t avail of any housing loan, and believe me, I got all the money, even more than I originally contributed for, and withdrawn at the time it was most needed! I again signed in this July as a member and opted for the same five years of payment and I am happy, knowing that I’ll have something coming and that I’m helping others to realize their dream of one day owning a house.
If you need more information, do inquire at the nearest Philippine Embassy or Consulate in your area. A representative will be there to answer your questions or if none, some brochures or leaflets will be available for you to read and know more about the Pag-IBIG Fund.
Author: Freda Editha O. Contreras
Published on: November 9, 1999