John Jonas explains the Philippine Pag-IBIG fund, a home loan and savings program that employers must contribute to. Members get affordable mortgages, home improvement loans, and higher-interest savings accounts for a minimum of 100 PHP (about $2) per month. Foreign employers can add this amount to contractor pay and request receipts as proof.
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Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at outsourcing to the Philippines. This is episode 207. What is the Poggibig benefit? So I've talked about benefits quite a bit on this show and one of the benefits that I've talked about is pogibig. It's one of the things you could pay for your ofs. Not necessary, not required, but let's talk about it. So I don't actually know how to say this, I don't know how they pronounce it, but it's spelled PAG I B I G is also known as the Home Development Mutual Fund. It is a government controlled and owned corporation that is mandated to help Filipinos get affordable home financing and to set up a savings account. So Filipinos who want to buy a house will contribute to the Poggi big fund because it offers lower rates, it offers longer payment periods, and it also gives you access to the list of people who have defaulted on their loans, which might give you a house house a little bit cheaper. You don't need to be a poggy big member in order to buy a house. In fact, there's quite a few residential developers who won't take money from. They won't take a Poggibig loan, they'll require some other kind of loan, or maybe they're even their own financing. But many Filipinos still contribute to it even if they're not using it to get a home loan because it offers home improvement loans, it offers short term loans, and it offers a savings account with a higher interest rate than most banks. Being a pugabig member also gets you a government issued id. So with sss, which I recently talked about, you get a umid, which is like a really, really great ID to have. In the Philippines, the Poggibig ID isn't as good, but it does offer you discounts at like restaurants and grocery stores or barbershops. And then that same ID is also your ATM card to access your savings fund that you have set up with poggibig. So how much is a Poggibig contribution? Well, the minimum contribution is 100 Filipino pesos, which is about US$2 per month. So that's the minimum is $2 per month. And actually in the Philippines, the company you work for is legally required to submit that amount per month and to take to withhold 100 pesos or $2 from your paycheck each month. So that would total $4 per month. That is required to be contributed. And then if the worker wants to contribute more to the fund, they're able to do that with their own money. So for you, you can't contribute to Poggibig directly. You have to add this to their pay, and then they can contribute it. Because you're not an employer in the Philippines, they are an independent contractor from you. Poggibig will not take money from you. So what you can do is tell them, hey, I want to contribute to poggibig. I'm willing to pay this much, and it could just be the minimum. I'm going to add US$2 to your salary each month and you more. Or maybe you could say, hey, I'm going to contribute to your Poggibig. I'm going to add $10 to your salary each month for you to contribute to it. I want you to provide me a receipt of the contribution that you made. And that's how you know that they're actually contributing to Pockybig by asking for a receipt. So like I said in the beginning, like all the benefits I talked about, this is totally optional for you. It's also super easy to contribute, and they'll be pretty happy if you want to contribute to it for them. Sam.
