(First of two parts)
In April 2024, BusinessWorld published “Pag-IBIG Fund: Doing good on mandates,” an assessment of the Home Development Mutual Fund’s execution of its dual mandate — a national savings program and affordable housing finance for workers — over the 11 years from 2013 to 2023. That piece argued that Pag-IBIG’s growth in assets, housing loan releases, and members’ savings, anchored by the rapid rise of the Modified Pag-IBIG 2 (MP2) voluntary savings program, reflected a financially sound institution executing well against its charter.
This first of two follow-up pieces updates that picture with figures reported since — audited results through CY2025, plus unaudited data through the first half of 2026 — and adds a development the 2024 piece could not have covered: Pag-IBIG’s shift, since December 2025, from lender to co-investor in affordable housing, through equity partnerships and accreditation deals with a widening roster of developers. A second installment, to follow next week, takes a harder look at a question the topline growth obscures: whether MP2’s own runaway success, and the housing push now layered on top of it, are starting to work against the fund’s bottom line.
Sourcing note: The 2013-2023 figures are as originally published (2022/2023 balance-sheet detail is CoA-audited; 2013 is the baseline year). The 2024-2025 figures come from Pag-IBIG’s year-end announcements and the Commission on Audit’s June 2026 unmodified-opinion release covering FYs 2024–2025. The 2026 figures are Pag-IBIG’s own unaudited quarterly and half-year releases, and housing-partnership details are from Pag-IBIG and Department of Human Settlements and Urban Development announcements.
Total assets crossed the P1-trillion mark in Q3 2024 and reached P1.23 trillion by end-2025 — a 3.6 times increase over the 2013 base, ahead of the 2.7 times (2013–2023) pace cited in the original piece. Growth continued into 2026: assets stood at P1.32 trillion at end-H1 (+6% vs. end-2025, +7% year on year) — a steadier, single-digit quarterly pace consistent with an asset base compounding off a much larger denominator, rather than a slowdown. (See Tables 1 and 2)
Lending is running ahead of last year. The P140.54 billion released in 2025 financed 90,727 homes. Pag-IBIG released P69.19 billion in housing loans in the first half of 2026, and P88.84 billion in housing and wholesale loans combined for January-July, 12% above the P72.61 billion of the same period in 2025 (the two figures cover different loan categories and are not directly comparable). Gross housing-related assets stood at P1.01 trillion at end-July, of which housing-related loans were P971.39 billion, about 96%.
HOUSING DELIVERY: FROM LENDER TO CO-INVESTOR
The most consequential change since the 2024 piece is not in the tables. Until recently Pag-IBIG’s role in affordable housing was that of a financier: it lent to members buying homes, including from accredited developers. Since December 2025 it has also become an investor in the supply of housing itself.
Megawide. On Dec. 17, 2025, Pag-IBIG signed an investment and partnership agreement with Megawide Construction Corp. under the Expanded Pambansang Pabahay para sa Pilipino (4PH) program. The fund will subscribe to up to P10 billion of perpetual preferred shares in Megawide Dreamrise Residences, Inc., a wholly owned Megawide subsidiary, payable in three tranches (P5 billion, then P2.5 billion twice), to finance 7,143 medium-rise units over two to three years, starting in Dasmariñas, Cavite. Coverage of the project reports a 9% annual return on the preferred shares. Megawide has said it is aiming for up to 100,000 units under 4PH over the longer term, with the first 50,000 in a five-year pipeline across Cavite.
P.A. Alvarez. A second equity deal followed on Aug. 7, 2026. Pag-IBIG will subscribe to P2.9 billion of preferred shares of P.A. Alvarez Properties and Development Corp., payable in tranches and earning a fixed 9% a year over three years, to build more than 7,300 units across 10 developments in Batangas, Laguna and Pampanga — 80% socialized and 20% economic housing. The fund said the investment was evaluated for the projects, market demand, the developer’s financial and operational capacity, and transaction safeguards before approval.
Demand-side partnerships. Pag-IBIG has also been signing accreditation and marketing agreements with large developers in quick succession: SM Development Corp. (signed Sept. 8), Filinvest Land and Ayala Land’s Avida and Amaia brands (by late September), Robinsons Land (early October), Rockwell Land (Oct. 13), and DMCI Homes (Oct. 16). These give members preferential pricing on selected projects financed through Pag-IBIG housing loans. The second National Housing Expo brings together more than 80 developer partners and about 50,000 ready-for-occupancy units.
Terms for borrowers. Financing was loosened at the same time. In mid-2026 Pag-IBIG cut housing-loan rates and raised the maximum loan per borrower to P10 million. Qualified socialized-housing borrowers under Expanded 4PH now pay a subsidized 3% a year; promotional rates are 4.5% for loans above the socialized ceiling up to P4.9 million and 5.75% for loans from P4.9 million to P10 million, fixed for three years and open to applications from July 1 to Dec. 31, 2026.
Targets. The volume ambitions are large. Pag-IBIG aims to disburse P167 billion in housing loans in 2026 — 19% above 2025’s P140.54 billion — and P170 billion in 2027, according to BusinessWorld’s reporting. Measured against the P69.19 billion released in the first half, the second half would need about P97.8 billion, roughly 41% above the first-half pace (our arithmetic). Management expects to reach 90-95% of the 2026 target, or roughly P150-159 billion.
Why now. The push comes as the private property market is weak. Pag-IBIG CEO Marilene Acosta has cited high inflation, elevated interest rates, rising material costs, and an oversupply of condominium units in Metro Manila. S&P Global Ratings reported that combined residential pre-sales of Ayala Land, SM Prime, Robinsons Land, and Megaworld fell 7% year on year in H1 2026 and expects meaningful recovery only in the second half of 2027. Analysts quoted by the Philippine Star note that Pag-IBIG mortgage disbursements on accredited projects can settle buyers’ turnover balances, converting ready-for-occupancy inventory into cash for developers sooner. Seen this way, the partnerships do double duty: they expand the supply of homes priced for members and give developers a path to clear existing stock.
On its face, this is the housing mandate being pursued more aggressively, and in a way the original article’s metrics reward — more units, more borrowers, more loan releases. Whether it also protects the savings mandate is a separate question, taken up in the second installment.
APPLES TO APPLES
Effective yield rows follow the original article’s convention: declared rate × 1.20, grossing up for the 20% withholding tax that ordinary (non-exempt) fixed-income instruments would otherwise incur — since Pag-IBIG dividends are tax-exempt under RA 9679, the full grossed-up figure is the comparable “apples to apples” yield against taxable alternatives, not literal cash paid to members. (See Table 3)
MP2 collections grew 58% in 2024 (on the new P200 minimum monthly contribution rule) before decelerating to 13% growth in 2025, even as MP2’s dividend rate hit a fresh high of 7.12% — the fourth straight year above 7%. The year 2025 was also the first year that net income declined year on year (-3.31%) since the period covered in the original article, even as the dividend payout ratio was pushed to a record 98.6% of net income.
Reconciling the 2025 income drop with the higher MP2 rate — the payout ratio absorbed it. Net income fell 3.3% (P67.52B-P65.28B), but the dividend pool the board declared from it still grew 15.6% (P55.65B-P64.34B), because the payout ratio jumped from 82.71% to 98.6% — near the entire year’s profit, well above the 70% statutory floor. In short: the higher MP2 yield in 2025 was a payout-ratio decision, not a sign of stronger underlying profitability — the profit engine itself cooled that year before reaccelerating in 2026.
Does the trend hold into 2026? On the income side, yes — and it is re-accelerating. Q1 2026 net income rose 11% to P16.77 billion, and by H1 2026 net income had reached a record P41.35 billion, up 24% year on year, reversing 2025’s dip. Gross income rose 19% to P52.98 billion. Investment income — from bonds, preferred shares and time deposits — jumped 47% to P6.85 billion, but it is still only about 13% of gross income and accounts for roughly a quarter of the P8.58 billion increase in gross income (our arithmetic). The rest came from the loan portfolios and cost control, which Pag-IBIG says it achieved even as it cut housing-loan rates and raised the loan ceiling.
WHAT’S CONFIRMED BY THE COA AUDIT
Pag-IBIG received an unmodified (highest) CoA audit opinion for FY2024 and FY2025 alike — its 14th consecutive year of the highest rating — covering total assets, savings collections, loan releases, and net income/dividends as seen in Table 4.
On the numbers reported through CY2025 and into H1 2026, then, Pag-IBIG’s execution of its dual mandate and its overall financial soundness both remain intact and, on several measures, ahead of the pace the original 2024 assessment described. But the same data raises questions the topline growth doesn’t answer. MP2, the program driving much of the savings success, is costing the fund more to sustain than the article that first celebrated it could have anticipated. And the new housing push commits members’ savings to private-sector preferred equity in a weak property market, while the fund’s core housing loans are being priced at 3% to 5.75% and it pays MP2 savers 7.12%. Whether those pieces fit together is the subject of next week’s second installment.
Alexander C. Escucha is a past president of the Philippine Economic Society (PES 2005), is a fellow of the Foundation for Economic Freedom (FEF), a board trustee of the UP Visayas Foundation chairman (2014-2026), and a retired senior VP of China Banking Corp.