Congress passes Pag-IBIG Fund measure

MANILA, Philippines – Congress has passed the Home Development Mutual Fund Law of 2009, also known as the Pag-IBIG Fund, that would establish, develop, promote and integrate a nationwide sound and viable tax-exempt mutual provident savings system and housing suitable to the needs of the employed and other earning groups.

Sen. Edgardo Angara and Senate Majority Leader Juan Miguel Zubiri said the House of Representatives agreed to adopt the Senate version of the bill and came up with the law during the bicameral conference committee meeting on the measure.

Senate Bill No.  2971/ House Bill No. 5220  – or An Act Further Strengthening the Home Mutual Development Fund or the Pag-IBIG Charter Amendment is expected to be signed by President Arroyo into law.

Angara said the new law would direct its efforts in motivating the workforce to better plan and provide for their housing needs, by membership in the Home Development Mutual Fund, together with compulsory support from their employers.

Zubiri said the approval of the new law on Pag-IBIG Fund would “help over 1.5 million Filipinos who are renting houses to better plan for their housing needs.”

Among the significant provision of the Act includes the power of the board of trustees to increase the monthly contributions similar to the GSIS and the SSS.

Section 7 of the Act states that the “maximum monthly compensation to be used in computing employee and employer contributions shall not be more than P5,000 provided that the monthly maximum compensation may be fixed from time to time by the board of trustees through adopted rules and regulations.”

The amended Act also provides members the option to withdraw their contribution after 15 years of continuous membership similar to the “optional retirement in the government service.” It likewise retained the provision allowing the board of trustees of Pag-IBIG to “invest not less than 70 percent of its investible funds to housing programs.”

The new Act also restores the tax-exemption provided by Republic Act  No. 7742 to Pag-IBIG Fund and all its assets and properties. “The tax exemption status of the Fund will free around P2 billion annually that can be invested for more housing projects, and can be lend to enabling borrowers,” Zubiri said.