Hello this is a strange issue which we experience on some of our W2K8 servers. 
Why the heck is currently allocated just 16MB? Performance monitor says it is 99.9% used and out monitoring system creates alerts about this. On another server there was the same situation and once I set the paging file to "system managed size" it immediately expanded from 32MB to 16GB! Any idea why this happens?
Best Answer
Taker a look at my answer at How do I tell if my Windows server is swapping? to understand why windows has a pagefile and not a swapfile like a unix system. The reason that system managed jumps up is because the system managed pagefile setting is intended to be large enough to hold a kernel-memory crash dump. It should be the size of your largest working set +1GB. As to why it's allocated so small- it's likely that you've simply never had to save many pages to disk.