The Multi-Purpose Loan (MPL) program, governed by the Home Development Mutual Fund (HDMF), commonly known as the Pag-IBIG Fund, serves as a primary financial assistance mechanism for Filipino workers. This program is designed to provide affordable credit to members for immediate financial needs, including medical expenses, tuition fees, home enhancement, or minor investments.

I. Statutory Basis and Purpose

The Pag-IBIG Fund was established under Republic Act No. 9679 (the Home Development Mutual Fund Law of 2009). The MPL is a short-term loan facility that allows members to utilize a portion of their Total Accumulated Value (TAV)—consisting of employee contributions, employer counterparts, and earned dividends—as collateral for a low-interest loan.

II. Eligibility Criteria

To qualify for an MPL, a member must meet the following legal and administrative benchmarks:

Membership Duration: The member must have at least twenty-four (24) monthly membership savings (contributions).
Active Status: The member must be "active," meaning they have made at least one (1) contribution within the last six (6) months prior to the date of the loan application.
Credit Worthiness/Existing Loans: * If the member has an existing Pag-IBIG Housing Loan, Calamity Loan, or MPL, the accounts must not be in default.
In the case of a renewal, the member must have paid at least the equivalent of six (6) monthly amortizations on the previous loan.
Proof of Income: The applicant must demonstrate the financial capacity to repay the loan through verifiable income sources.

III. Documentary Requirements

The Fund adheres to strict "Know Your Customer" (KYC) and auditing standards. Applicants must submit the following:

1. Standard Forms

Multi-Purpose Loan Application Form (MPLAF): A duly accomplished form, including the "Employer’s Confirmation" section for formally employed members.

2. Identification

Photocopy of at least two (2) valid IDs: These must be government-issued (e.g., Passport, Driver’s License, PRC ID, SSS/GSIS UMID, or Voter's ID) and bear the applicant’s signature.

3. Proof of Income

The requirements vary based on the nature of employment:

For Formally Employed:
Certificate of Net Pay: Usually found on the application form, certified by the employer’s authorized signatory.
Latest Payslips: Corresponding to the last month of service.
For Self-Employed:
Business Permit: Mayor’s Permit or DTI Registration.
Income Tax Return (ITR): Audited Financial Statements for the previous year.
Official Receipts: Proof of business-related income.
For Overseas Filipino Workers (OFWs):
Employment Contract: Certified true copy.
Certificate of Employment and Compensation (CEC): Duly authenticated by the Philippine Embassy or Consulate if applicable.

IV. Loanable Amount and Interest Rates

The maximum amount a member can borrow is 80% of their Total Accumulated Value (TAV). This 80% limit is inclusive of any outstanding balance the member may have from an existing Calamity Loan or MPL.

Interest Rate: The MPL currently carries an interest rate of 10.5% per annum.
Loan Term: The loan is typically payable over a period of twenty-four (24) or thirty-six (36) months, with a grace period depending on the prevailing circulars of the Fund.

V. Disbursement and Repayment

Disbursement Channels

Once approved, the loan proceeds are released through:

Loyalty Card Plus: The primary and most efficient method.
LandBank/DBP Cash Cards.
Check: In specific instances where card facilities are unavailable.

Repayment Mechanism

Employed Members: Monthly amortizations are legally required to be deducted from the employee's salary by the employer. The employer is then mandated to remit these payments to the Pag-IBIG Fund.
Self-Employed/Voluntary Members: Payments are made through authorized payment centers, the Virtual Pag-IBIG portal, or over-the-counter at HDMF branches.

VI. Legal Consequences of Default

Failure to settle the MPL results in the accrual of penalties (usually 1/2 of 1% of the unpaid amount for every month of delay). Furthermore, if the loan remains unpaid, the outstanding balance, including interests and penalties, will be deducted from the member's TAV upon membership termination (e.g., retirement, permanent departure from the country, or total disability).