The Multi-Purpose Loan (MPL) program, administered by the Home Development Mutual Fund (HDMF), commonly known as the Pag-IBIG Fund, serves as a primary financial relief mechanism for Filipino workers. Governed by Republic Act No. 9679 (the Home Development Mutual Fund Law of 2009), the MPL is designed to provide affordable short-term credit to members for immediate financial needs, including medical expenses, tuition fees, home enhancement, or even minor livelihood projects.

I. Eligibility Criteria

To qualify for an MPL, a member must meet specific regulatory requirements set by the Fund's Board of Trustees. These criteria ensure the sustainability of the fund while maintaining accessibility for its members.

Active Membership: The applicant must be an active member at the time of application, with at least twenty-four (24) monthly membership savings (MS).
Contribution Regularity: The member must have made at least one (1) monthly contribution within the last six (6) months prior to the date of loan application.
Creditworthiness (Existing Loans): If the member has an existing Pag-IBIG Housing Loan, Multi-Purpose Loan, or Calamity Loan, the accounts must not be in default as of the date of application.
Proof of Income: The member must demonstrate the capacity to pay through verifiable income sources.

II. Documentary Requirements

The following documents are mandatory for processing the loan application. Failure to provide authentic documentation may result in the denial of the loan or legal repercussions under the Revised Penal Code for falsification of documents.

Multi-Purpose Loan Application Form (MPLAF): A duly accomplished form, including the Employer's Confirmation section (for formally employed members).
Valid Government-issued ID: A photocopy of at least one (1) valid identification card (e.g., UMID, Passport, Driver’s License).
Proof of Income:

For Formally Employed: The "Certificate of Net Pay" section on the application form, signed by the employer’s authorized signatory, or the latest payslip.
For Self-Employed: A valid Business Permit, Commission Vouchers, or an Income Tax Return (ITR) from the previous year.
For Overseas Filipino Workers (OFWs): Employment Contract or Certificate of Employment and Compensation (CEC), and a valid Special Power of Attorney (if the application is filed through a representative).

Cash Card: A photocopy of the Loyalty Card Plus or a LandBank/DBP cash card for the electronic disbursement of proceeds.

III. Loanable Amount and Interest Rates

The maximum amount a member can borrow is determined by their Total Accumulated Value (TAV)—which consists of the member's contributions, the employer's counterpart contributions, and accumulated dividends.

Loan Ceiling: A qualified member can borrow up to 80% of their TAV.
Interest Rate: The MPL currently carries an interest rate of 10.5% per annum. It is important to note that a significant portion of the net income derived from the Fund's lending operations is returned to members in the form of annual dividends.

IV. Terms of Repayment

The legal obligation to repay the loan is structured to be manageable for the average wage earner.

Loan Term: The loan is typically payable over a period of thirty-six (36) months. Under certain guidelines, members may opt for a shorter term of twenty-four (24) months.
Payment Method:
Employed Members: Monthly amortizations are legally mandated to be deducted from the employee's salary by the employer, who is then responsible for remitting these payments to Pag-IBIG.
Self-Employed/Voluntary Members: Payments are made through authorized payment channels or Pag-IBIG branches.
Grace Period: The first installment usually begins on the second month following the date on the loan check or disbursement.

V. Consequences of Default

Failure to settle the MPL according to the agreed terms results in the loan being declared in default.

Legal Note: In the event of default, the outstanding balance, including interests and penalties, shall be deducted from the member's TAV upon withdrawal of contributions (e.g., retirement, permanent departure from the country, or total disability). Furthermore, an unpaid MPL may prevent the member from qualifying for future loans, such as the Housing Loan or Calamity Loan.

VI. Application Process

Members may file their applications through three primary channels:

Over-the-Counter: Submission at any Pag-IBIG Fund branch nationwide.
Virtual Pag-IBIG: An online portal allowing for a paperless application process for members with a Loyalty Card Plus.
Employer Submission: Large-scale employers often facilitate bulk applications for their staff via the Fund's employer services.