MANILA, Philippines—The Pag-IBIG Fund, which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno, seeks to provide a national savings program and affordable shelter financing for Filipino workers.
Under Republic Act No. 9679, or the Home Development Fund Law of 2009, signed by then President Gloria Macapagal-Arroyo in July 2009, Pag-IBIG membership is mandatory for all employees covered by the Social Security System and the Government Service Insurance System; uniformed members of the Armed Forces of the Philippines, Bureau of Fire Protection, Bureau of Jail Management and Penology, and Philippine National Police; overseas Filipino workers; and Filipinos employed by foreign-based employers, deployed locally or abroad.
The law also grants the Pag-IBIG Fund exemption from tax payments.
For employees with a monthly compensation of P1,500 and below, the contribution amounts to 1 percent of their income plus 2 percent covered by their employer. For employees with a monthly compensation of over P1,500, contribution amounts to 2 percent of their income plus 2 percent covered by their employer. These contributions are deducted from the gross income before the computation of income tax.
A member may withdraw his savings after 20 years of membership in the fund and after having made a total of 240 monthly contributions.
Circumstances like retirement, permanent departure from the country and permanent or total disability also allow a member to withdraw his savings.
Pag-IBIG also offers short-term loans to members who have made at least 24 monthly contributions.
Moreover, Pag-IBIG offers housing loans to members under its end-user financing program. Eligible members are those with at least 24 monthly contributions; not more than 65 years old at the time of application; and those who have passed satisfactory background/credit and employment/business checks conducted by the developer and the Pag-IBIG Fund.
Members availing themselves of a housing loan should also have a legal capacity to acquire real property; no outstanding Pag-IBIG housing loan; and have not availed himself or herself of a foreclosed or canceled Pag-IBIG loan.
Lawrence de Guzman, Inquirer Research
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Published in Philippine Daily Inquirer September 9, 2010.
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