How Pag-IBIG contributions are computed
Pag-IBIG Fund, officially the Home Development Mutual Fund (HDMF), is a mandatory savings program for employed and self-employed Filipinos. Every month, a percentage of your salary is set aside — split between you and your employer if you're employed — and deposited into your personal Pag-IBIG savings account, where it earns annual dividends.
Unlike SSS or PhilHealth, Pag-IBIG isn't insurance — it's closer to a forced savings account you can eventually withdraw, borrow against for a housing loan, or use for a multi-purpose loan. The amount deducted from your payslip each month directly builds your Total Accumulated Value (TAV), which determines how much you can borrow later.
2026 Pag-IBIG contribution rates
| Monthly salary | Employee share | Employer share |
|---|---|---|
| ₱1,500 and below | 1% (max ₱15) | 2% (max ₱30) |
| Above ₱1,500 – ₱10,000 | 2% | 2% |
| Above ₱10,000 | ₱200 (capped) | ₱200 (capped) |
Since February 2024, under HDMF Circular No. 460, the Maximum Fund Salary (MFS) used for computation was raised from ₱5,000 to ₱10,000. This doubled the contribution ceiling — meaning anyone earning ₱10,000 or more per month now pays the maximum of ₱200 (employee) and ₱200 (employer), for a combined ₱400 per month, up from ₱200 total before the update. This rate has remained unchanged into 2026.
Example computation
An employee earning ₱25,000 a month has a salary well above the ₱10,000 cap, so their contribution is simply capped at the maximum: ₱200 deducted from their payslip, matched by ₱200 from their employer, for a total of ₱400 credited to their Pag-IBIG savings that month.
An employee earning ₱8,000 a month falls under the ₱10,000 cap, so the rate applies directly to their actual salary: 2% of ₱8,000 is ₱160 from the employee, matched by ₱160 from the employer.
Self-employed and voluntary members
If you're self-employed, freelancing, or a voluntary member with no employer to match your contribution, you're expected to shoulder both shares yourself — meaning up to ₱400 total per month if your declared income is ₱10,000 or above. Some voluntary members choose to contribute less than the full amount, but doing so reduces both your future loan eligibility and dividend earnings.
MP2: Pag-IBIG's voluntary savings option
Separate from the mandatory contribution above, Pag-IBIG also offers Modified Pag-IBIG II (MP2) — a voluntary savings program with a 5-year term that has historically paid higher dividends than the regular fund. Contributions to MP2 don't affect your mandatory contribution or loan eligibility calculations, which are based only on your regular Total Accumulated Value. Any active member can open an MP2 account online through the Virtual Pag-IBIG portal, and there's no fixed minimum beyond what the program requires per transaction.
What your contribution actually gives you
- Dividends — your accumulated savings earn annual dividends, often higher than typical bank savings account rates.
- Housing loans — active members can apply for a Pag-IBIG housing loan, including recent promotional rates for first-time borrowers.
- Multi-purpose loans — short-term loans based on a percentage of your accumulated savings, usable for emergencies, tuition, or minor home repairs.
- Provident savings on retirement or separation — your full accumulated balance, plus dividends, becomes withdrawable under qualifying conditions such as retirement, permanent departure from the country, or total disability.