Fernandez-Castano lost a four-stroke lead over the final nine holes of the tournament before taking the playoff with a birdie at the par-5 18th hole.
Weather caused the tournament to be cut to 54 holes and Fernandez-Castano and Pagunsan finished regulation play Sunday tied at 14-under-par, forcing a sudden-death playoff.
They each hit tee shots on the first playoff hole Sunday but play was halted for an hour because of lightning. After each hit second shots, lightning was again detected and play was halted for the day.
The playoff resumed Monday and both players had pars on the first hole -- with Pagunsan missing a birdie try from 8 feet.
On the second playoff hole, Pagunsan hit his third shot within 10 feet but Fernandez-Castano wound up with even a shorter putt. Pagunsan missed his birdie try to the right and Fernandez-Castano dropped his in for the tournament title.
It was his first tournament championship since 2008 and fifth European Tour title overall.
Pagunsan's runner-up finished moved him to first in the race for the Asian Tour Order of Merit.