MANILA, Philippines — The Home Development Mutual Fund, commonly known as Pag-IBIG Fund, is expected to generate at least P30 billion annually if the long delayed contribution hike is pushed through.
During the Kapihan with Pag-IBIG Fund on Monday, Pag-IBIG CEO Marilene Acosta said the contribution hike would happen by January 2024 as approved by the board of trustees.
Acosta said Pag-IBIG has informed President Marcos of the scheduled rate increase.
“It is our board who has the authority to increase the rate of contribution. Before January, we will confirm again with Malacanang,” Acosta said.
“If the President says social services should not yet increase, then we have to follow,” she said.
Last March, Pag-IBIG postponed the contribution hike that was supposed to take effect this year as workers and business owners are just recovering from the pandemic.
Existing policy on Pag-IBIG savings is based on a member’s monthly fund salary (MFS) at two percent at a maximum amount of P5,000.
The supposed first increase in 2021 should have adjusted this to P7,500 and to P10,000 this year, but both were deferred.
“Come January 2024, the MFS will be at P10,000 times two percent. So the savings of the employee will be P200 matched by the employer by another P200,” Acosta said.
Currently, Pag-IBIG has 15.58 million active members.
Acosta said the contribution increase could result in an additional P30 billion a year.
“If it will be deferred again, we will be able to lend less. Because whatever we collect, we invest it in housing,” Acosta said.
The Pag-IBIG chief said the agency has started to give out notices to employers and even the Department of Budget and Management to allow them to prepare for the additional budget requirement.
Pag-IBIG was originally scheduled to raise contribution rates in 2021 as it saw the increase as necessary.
At that time, Pag-IBIG projected that the amount of loans disbursed will eventually outpace the total collections from both loan payments and members’ contributions.
However, the move was deferred for three years due to the impact of the pandemic on members and the business community.
Pag-IBIG last raised the contributions for members and employers in 1986.