Saving tips for working millennials: Don’t Stress. Know where your monthly Pag-IBIG contributions actually go

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Metro Manila (CNN Philippines) — Some working millennials, like you, see deductions from their monthly pay as added burden. One of which is the P100 that goes to Pag-IBIG Fund. While the Philippine Labor Code requires all Filipino employees to be a member of Pag-IBIG Fund, you may not know where your money actually goes.

For starters, your P100 monthly contributions are in fact, your savings, with the amount matched by your employer. This doubles your contributions to P200 per month, which is then saved in Pag-IBIG Fund under your name. Your savings earn annual dividends which grow your savings further. You’ll be glad to know that in 2018, Pag-IBIG Fund declared dividends at 6.91 percent, higher than what your money will earn from most savings or investment programs. When your Pag-IBIG savings mature in 20 years, all of it – along with the dividends it has earned – will be given back to you.

If you’re looking to save more than P100, you can. Just talk to your HR officer to increase your monthly savings and take advantage of the high dividend rates. And if you have P500 to spare, you might want to look at Pag-IBIG Fund’s MP2 – a voluntary savings program that earns even higher dividends at a shorter lock-in period of just five years.

Also, as a Pag-IBIG Fund member, you have access to low-interest cash loan programs, one of which is the multi-purpose loan (MPL). With the MPL, you can borrow up to 80 percent of your savings to pay for tuition fees, bills, minor home repairs, or other needs. The MPL comes with 10.5 percent annual interest and is payable within 24 months.

The other cash loan program offered by Pag-IBIG Fund is the Calamity Loan which is like the MPL but comes with a lower annual interest of 5.95 percent to provide financial assistance tomembers, who reside in calamity-stricken areas.

Buying a home? Pag-IBIG Fund's got you covered with its two home financing programs.

The Regular Housing Loan Program allows members to borrow up to ₱6 million at rates as low as 5.375 percent per annum. Minimum wage earners, meanwhile, can avail of Pag-IBIG's Affordable Housing Program (AHP) which offers the lowest rate of only 3 percent per annum for loans up to ₱580,000. Pag-IBIG Fund provides the longest term of up to 30 years for its housing programs.

So where does your monthly Pag-IBIG Fund contributions go? Your P100 goes a long way to cater to your needs and in providing you with benefits exclusively enjoyed by Pag-IBIG Fund members.

If you want to know more, find @PagIBIGFundOfficialPage on Facebook or call them at 724-4244.