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Best Card Solution Highly Commended: Home Development Mutual Fund

Published: Jul 2013

Rey Malaya, Home Development Mutual Fund and Barbara Harrison, Citi

Photo of Rey Malaya, Home Development Mutual Fund, Barbara Harrison, Citi and Joy Macknight.


The Home Development Mutual Fund or more popularly known as the Pag-IBIG Fund, is a 33-year-old government institution in the Philippines and was established to develop a sound and viable mutual provident savings system suitable to the needs of the employed and to motivate them to better plan and provide for their housing needs. It was created through a series of Presidential Decrees, Executive Orders and Republic Acts, the latest of which is Republic Act 9679.

Rey Malaya

Vice President, Fund Management Group, Makati City, Philippines

Home Development Mutual Fund

Home Development Mutual Fund, popularly known as Pag-IBIG (Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno) Fund created under R.A. 9679, is a government financial institution that operates a national savings system for private and government employees and other earning groups. It provides short-term benefits and affordable shelter financing for Filipino workers.

in partnership with

At present membership to Pag-IBIG is mandatory for all Filipino employees including Overseas Worker and the informal income sector. All active members have access to the Fund’s different benefit programmes, which include short-term loan programmes, where financial assistance is provided to members to address their immediate needs and its provident savings programme where members’ savings earn annual dividends; and its housing loans which are offered at very affordable interest rates.

Pag-IBIG has over 12 million members worldwide, and disburses billions of pesos in short-term loans yearly. In 2012 alone Pag-IBIG released P51.4 billion under its Multi-Purpose and Calamity Loan Programmes. A percentage of the loan proceeds are released through paper cheques. These paper cheques are prepared manually, often requiring the members to go back to the Pag-IBIG Fund office to pick them up. Moreover, cheques are subject to a minimum of three days clearing, further delaying members’ access to much needed funds.

Considering the Fund’s objective of moving towards a paper-free environment, and after a thorough evaluation process, Citi was mandated by the Pag-IBIG Fund to provide them with fully customised Pag-IBIG prepaid cards for disbursement of short-term loan proceeds and provident benefits, as an alternative to the traditional cheque payments.

Citi’s prepaid card system was the only one that could provide the Pag-IBIG Fund with instant issuance capability, allowing Pag-IBIG to issue the cards to members immediately on site during the loan application process. Upon loading of the cards, the cardholders are notified instantly through SMS, giving them access to funds through any Visa/MasterCard point of sale terminal or through various ATMs nationwide. Online access and a 24/7 Interactive Active Response System is available to cardholders for verification or clarification. The solution has improved efficiency and lowered costs as various manual processes are now automated. Pag-IBIG can also have access to data on how and where members spend the funds, potentially giving Pag-IBIG greater insights as to what type of loans or benefits would be preferred by its members.

As Rey Malaya, Vice President, Fund Management Group points out, “Pag-IBIG’s brand image has been greatly enhanced by the customised Pag-IBIG Prepaid Card, as well as by the discounts members can enjoy in various establishments.”

Citi’s prepaid card solution has also met the objectives of the Fund in moving towards a less-paper operating environment. In addition to instant issuance capability, Citi also integrated with Pag-IBIG Funds’ in-house system, so that cardholder information as well as the amounts to be loaded into each card could be automatically interfaced into Citi’s back-end systems, thereby increasing security and reducing manual processes. Pag-IBIG members can inquire about their card balances and transaction history by calling Citi’s Interactive Voice Response System or by accessing the information online.

Malaya concludes, “as a value added benefit, Citi partnered with Visa to provide discount coupons included in the card envelopes, giving members discounts or complimentary offers at selected partner merchants.”

The Pag-IBIG Citi prepaid card provides for a faster and more convenient and safer way for Pag-IBIG short-term loan borrowers to receive and use their loan proceeds – adhering to the Fund’s commitment of bigger, better and faster service. This is exactly the kind of beneficial consequence that results when government and the private sector work towards a goal.

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