MANILA, Philippines - The Home Development Mutual Fund (Pag-IBIG) is offering overseas Filipino workers a voluntary savings program with higher yields and shorter terms.

Under the Pag-IBIG II program, members have a savings option with a term as short as 5 years and a preferential dividend rate that is higher than that of regular membership (Pag-IBIG I).

Last year, Pag-IBIG dividends amounted to P8.5 billion with a 5% rate, higher than bank rates. These will be credited to members' saving accounts which they can get after 20 years and 240 monthly contributions.

The program is open to all Pag-IBIG I members and overseas Filipino workers (OFWs) with a monthly gross income exceeding P5,000. A member may contribute as low as P500 monthly. The resulting dividend earnings are tax free and guaranteed by the national government.

At a 6 % dividend rate per annum, a monthly contribution rate of P500 can generate savings of P34,921.79 for 5 years and P81,655.02 for 10 years. If a member doubles his monthly contribution to P1,000, this will yield 5- and 10-year savings of P69,843.58 and P163,310.65.

Members who want to avail of the Pag-IBIG II savings mechanism should also maintain their mandatory Pag-IBIG I membership, where they have to contribute at least P100 monthly as employee counterpart and which has a 20-year maturity.

Pag-ibig posted a net income of P12 billion in 2009, the highest in its history. Seventy percent of its income is set aside as dividends that are added to their total savings.