De La Salle University-Dasmariñas

Dasmariñas, Cavite

In partial fulfillment of the requirements for Income Taxation

(Tax101)

Submitted by:
Marquez, Angelica Joyce Peliño, Faith Anne
Miralles, Maria Isabella Perey, John Jahaziel
Ocampo, Katrina Amor

Mr. Charles C. Onda, CPA, MSC, MD

Professor
 Home Development Mutual Fund

The Home Development Mutual Fund (abbreviated as HDMF), more popularly known as the
Pag-IBIG Fund, is a Philippine government-owned and controlled corporation under the Housing
and Urban Development Coordinating Council responsible for the administration of the national
savings program and affordable shelter financing for Filipinos employed by local and foreign-
based employers as well as voluntary and self-employed members. It offers its members short-
term loans and access to housing programs.

MEMBERSHIP

MANDATORY MEMBERSHIP

Membership to the fund is exclusive to all Filipino citizens who are or ought to be covered by
the Social Security System (SSS), provided that actual membership in the SSS shall not be a
condition precedent to the mandatory coverage in the fund. It shall include, but are not limited
to:

 A private employee, whether permanent, temporary, or provisional who is not over sixty
(60) years old;
 A household helper earning at least ₱1,000 a month. A household helper is any person
who renders domestic services exclusively to a household such as a driver, gardener,
cook, governess, and other similar occupations;
 A Filipino seafarer upon the signing of the standard contract of employment between
the seafarer and the manning agency, which together with the foreign ship owner, acts
as the employer;
 A self-employed person regardless of trade, business or occupation, with an income of
at least ₱1,000.00 a month and not over sixty (60) years old;
 An expatriate who is not more than sixty (60) years old and is compulsorily covered by
the Social Security System (SSS), regardless of citizenship, nature and duration of
employment, and the manner by which the compensation is paid. In the absence of an
explicit exemption from SSS coverage, the said expatriate, upon assumption of office,
shall be covered by the Fund.
 An expatriate shall refer to a citizen of another country who is living and working in the
Philippines.
 All employees who are subject to mandatory coverage by the Government Service
Insurance System (GSIS), regardless of their status of appointment, including members
of the judiciary and constitutional commissions;
 Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire
Protection, the Bureau of Jail Management and Penology, and the Philippine National
Police;
 Filipinos employed by foreign-based employers, whether they are deployed locally or
abroad or a combination thereof.
 VOLUNTARY MEMBERSHIP

Membership is also extended to individuals of at least 18 years old but not more than 65 years
old under their voluntary membership program. However, the said individual shall be required
to comply with the set of rules and regulations for Pag-IBIG members including the amount of
contribution and schedule of payment. In addition, they shall be subject to the eligibility
requirements in the event of availment of loans and other programs/benefits offered by the
Fund.

The following shall be allowed to apply for voluntary membership:

 Non-working spouses who devote full-time to managing the household and family
affairs, unless they also engage in another vocation or employment which is subject to
mandatory coverage, provided the employed spouse is a registered Pag-IBIG member
and consents to the Fund membership of the non-working spouse;
 Filipino employees of foreign government or international organization, or their wholly
owned instrumentality based in the Philippines, in the absence of an administrative
agreement with the Fund;
 Employees of an employer who is granted a waiver or suspension of coverage by the
Fund under RA 9679;
 Leaders and members of religious groups;
 A member separated from employment, local or abroad, or ceased to be self-employed
but would like to continue paying his/her personal contribution. Such member may be a
pensioner, investor, or any other individual with passive income or allowances;
 Public officials or employees who are not covered by the GSIS such as Barangay
Officials, including Barangay Chairmen, Barangay Council Members, Chairmen of the
Barangay Sangguniang Kabataan, and Barangay Secretaries and Treasurers;
 Such other earning individuals/groups as may be determined by the Board by rules and
regulations.

When does membership with the Fund begin?

Membership with the Fund becomes official only upon remittance of the first monthly
membership savings. Thus, membership begins only upon the said date as evidenced by the
Pag-IBIG Fund Receipt.

How much should a member contribute?

The membership savings (MS) rate of all members, except for non-working spouses of Pag-IBIG
members, shall be as follows:
 MS Rate
Monthly Compensation
Employee Employer (if any)
P1,500.00 and below 1.0% 2.0%
Over P1,500.00 2.0% 2.0%

A Filipino employee working abroad and whose employer is not subject to mandatory coverage
shall contribute an amount equivalent to 2% of his/her monthly compensation. Said employee
may opt to pay the employer counterpart.

The maximum monthly compensation to be used in computing the membership savings shall
not be more than five thousand pesos (P5,000.00).

Employer shall remit two percent (2%) of the monthly compensation of the contributing
member as counterpart contribution. The employer is not entitled to deduct from the wages or
remuneration of or, otherwise, to recover from the employee the employer's contribution.

A non-working spouse of a Pag-IBIG member shall contribute as follows:

Fifty Percent (50%) of MS Rate

Working Spouse’s
Monthly Compensation
P1,500 and below 1.0%
Over P1,500 2.0%

Notwithstanding the said MS rates, a member may contribute more than what is prescribed.

How will MS be remitted to the Fund?

Formally employed members shall contribute through salary deduction. Their employers shall
have the responsibility to remit said contributions to the Fund on a monthly basis.

Other members may pay directly to the Fund or through any of its authorized collecting agents.
For those who want to contribute on a monthly basis, MS shall be remitted on or before the 10th
day of the following calendar month. For quarterly payments, remittance must be made on or
before the 10th day of the first month of the following quarter.
 BENEFITS OF THE FUND

I. PROVIDENT PROGRAMS

Benefits Claim

Pag-IBIG Fund guarantees the refund of member's total accumulated savings (TAV),
which consists of the member's accumulated contributions, the employer counterpart
contributions, if any, and the dividend earnings credited to the member's account upon
occurrence of any of the following grounds for withdrawal:

1.) Membership maturity. The member must have remitted at least 240 monthly
membership contributions with the Fund. For Pag-IBIG Overseas Program (POP) members,
membership with the Fund shall be at the end of five (5), ten (10), fifteen (15), or twenty (20)
years depending on the option of the member upon membership registration.

There are actually three types of Savings Programs under Pag-IBIG, namely:

1. The Pag-IBIG I (P1) Program

This is the most popular Savings program and one that recently become
mandatory for all Filipino employees based in the Philippines. The minimum
monthly contribution to the Pag-IBIG I program is only PhP 200 (combined
employee-employer contribution.)

2. Pag-IBIG Overseas Program (POP)

This savings program is applicable to overseas Filipino workers (OFW)

and Filipino immigrants abroad. Minimum monthly contribution to the Pag-IBIG
Overseas Program is only USD 5; actual contribution will be converted to
Philippine Peso upon payment.

3. Pag-IBIG II (P2) Program

This is the lesser known Savings program of Pag-IBIG Fund, maybe

because it is non-mandatory. It was first introduced in 1989 for members who
want to avail of larger amount for housing loan. That is, large loan must have
bigger contributions. But a lot of changes has been made since then. Today,
Pag-IBIG II is much similar to P1 and POP, but with much higher dividend. The
minimum month contribution to the program is PhP 500 only; this is on top of
your contributions to P1 and/or POP.

2.) Retirement. The member shall be compulsorily retired upon reaching age 65. He may
however, opt to retire upon the occurrence of any of the following:
 • Actual retirement from the SSS, the GSIS or a separate employer provident/retirement
plan, provided the member has at least reached age 45.

• Upon reaching age 60.

Pag-IBIG Balik Savings

Pag-IBIG Fund members who have reached 65 years of age can fully claim their monthly
contributions, employer’s counterparts, and earned dividends. This service financially assists
retired and Filipino senior citizens, who deserve to enjoy the fruits of their years of hard work.

3.) Permanent and Total Disability or Insanity. The following disabilities shall be deemed
total and permanent:

• Temporary total disability lasting continuously for more than 120 days;

• Complete loss of sight of both eyes;

• Loss of two limbs at or over the ankle or wrist;

• Permanent complete paralysis of two limbs;

• Brain injury resulting in incurable imbecility or insanity; and

• Such other cases which are adjudged to be total and permanent disability by a duly
licensed physician and approved by the Board of Trustees.

4.) Separation from the service due to health reason

5.) Permanent departure from the country

6.) Death. In case of death, the Fund benefits shall be divided among the member's legal heirs
in accordance with the New Civil Code as amended by the New Family Code.

BASIC REQUIREMENTS FOR PROVIDENT BENEFITS CLAIM

1. Application for Provident Benefits Claim (APB, HQP-PFF-040)

2. Pag-IBIG Transaction Card and one (1) valid ID card with photo and signature of
Claimant
Notes :

a. If the Pag-IBIG Transaction Card is not available, two (2) valid ID cards with
photo and signature of Claimant.

b. Pag-IBIG Transaction Card and one (1) valid ID card with photo and signature of
Claimant.

3. Service Record (For Government Employee)

 4. Statement of Service (For AFP)

ADDITIONAL REQUIREMENTS

(The following additional documents shall be submitted depending on the reason for claim)

A. For Death
1. NSO Certified True Copy of Member’s Death Certificate
2. Notarized Proof of Surviving Legal Heirs (HQP-PFF-030)
3. NSO Certified True Copy of Birth Certificate of all children or
Baptismal/Confirmation Certificate (If with child/children)
4. Notarized Affidavit of Guardianship (HQP-PFF-028) (if with child/children below 18
years old, or if child/children is/are physically/mentally incompetent)
5. To establish kinship with the deceased member, the claimant shall submit any
one of the following:
 NSO Certified True Copy of Member’s/Claimant’s Birth Certificate
 NSO Certified True Copy of Non-Availability of Birth Record and Notarized
Joint Affidavit of Two (2) Disinterested Persons (HQP-PFF-029)
 Certified True Copy of Member’s/Claimant’s Baptismal/Confirmation
Certificate
 If Member is single, Certificate of No Marriage (CENOMAR)
 If Member is married, NSO Certified True Copy of Member’s Marriage
Contract and Advisory on Marriage.
B. For Retirement
1. Any one of the following:
 NSO Certified True Copy of Birth Certificate
 NSO Certified True Copy of Non-Availability of Birth Record and Notarized
Joint Affidavit of Two (2) Disinterested Persons (HQP-PFF-029)
2. Notarized Certificate of Early Retirement (For Private Employee only, at least 45
years old)
3. GSIS Retirement Voucher (For Government Employee)
4. Order of Retirement (For AFP)
5.

C. For Permanent Total Disability or Insanity/Termination from the Service by

Reason of Health
1. Physician’s Certificate/Statement (With clinical or medical abstract)
2.
D. For Permanent Departure from the Country
1. Photocopy of Passport with Immigrant Visa/Residence Visa/Settlement Visa or its
equivalent
2. Notarized Sworn Declaration of Intention to Depart from the Philippines
Permanently (HQP-PFF-031) (No need to submit if already based abroad)
Multi- Purpose Loan

This program aims to provide financial assistance to Pag-IBIG members for purposes of minor
home improvement, livelihood, medical, educational, purchase of appliance and furniture and
other needs.

Borrower Eligibility:

• New Loan

1.) With at least twenty-four (24) monthly contributions.

2.) An active member at the time of loan application, with at least five (5) monthly
contributions for the last six (6) months.

3.) Member-applicant’s net take home pay shall not fall below the minimum requirement
of the General Appropriations Act (GAA) or company policy, whichever is applicable.

4.) If with existing calamity loan, a member shall be allowed to avail of the MPL only
after payment of at least six (6) monthly amortizations. The outstanding balance,
together with any accrued interests, penalties and charges, shall be deducted from the
proceeds of the MPL.

• Loan Renewal

1.) With payment of at least six (6) monthly amortizations. The outstanding balance,
together with any accumulated interests, penalties and charges, shall be deducted from
the proceeds of the new loan.

2.) An active member at the time of loan application, with at least five (5) monthly
contributions for the last six (6) months.

3.) Member-applicant’s net take home pay shall not fall below the minimum requirement
of the General Appropriations Act (GAA) or company policy, whichever is applicable.

Basic Requirements for Short-Term Loan

1. Duly accomplished Multi-Purpose Loan Application Form (MPLAF) or Calamity Loan
Application Form (CLAF) (Downloadable from the Pag-IBIG website,
www.pagibigfund.gov.ph)
2. Two (2) valid IDs (refer to page 9)
3. Proof of Income
 Formally-employed - The “Certificate of Monthly Net Income” portion at the
back of the application form must be accomplished by the employer or submit
photocopy of latest payslip duly authenticated by company’s authorized
representative.
 Self-Employed or Individual Payors
Photocopy of any of the following:
 - Business Permit/Mayor’s Permit;
- Commission Voucher; or
- Any other proof acceptable to the Senior Management Committee

Calamity Loan

1.) Who are eligible?

The calamity loan program is open to any Pag-IBIG member who:

• Has made at least 24 monthly savings;

• Is an active member with at least 5 monthly savings for the last 6 months as of month
prior to the date of loan application; and

• Resides in an area which is declared by the Office of the President or the Local
Sanggunian concerned as under a state of calamity. If the member has an existing
Housing Loan, Multi-Purpose Loan (MPL) and/or Calamity Loan, the account must not be
in default as of date of loan application.

If the member has an existing Housing Loan, Multi-Purpose Loan (MPL) and/or Calamity Loan,
the account must not be in default as of the date of the loan application.

2.) How much can one loan?

An eligible member may borrow up to a maximum of 80% of his Total Accumulated Value (TAV)
subject to the terms and conditions of the program.

The current interest rate for the Calamity Loan is 5.95% per annum.

3.) What is the payment period?

The Calamity Loan is amortized over a period of 24 months with a grace period of 3 months.
Said member shall start paying his loan on the 4th month following the date of his DV/Check
date.

4.) Can a member still avail of a Calamity Loan even if he has an outstanding
MPL/Calamity Loan?

Yes, said member may still avail of a Calamity Loan subject to certain conditions. In no case,
however, will the aggregate short-term loan (MPL and Calamity Loan) exceed 80% of the
borrower’s TAV.

If, in addition to an outstanding MPL, the member also has an outstanding calamity loan in the
amount of P2,000, in the example above, the member is still granted a new calamity loan of
P3,000 but will only receive P1,000 because the P2,000 will pay off the existing calamity loan
balance. This means that at any given time, a member can have both MPL and calamity loan,
but only one calamity loan.

5.) Until when can an eligible member avail of the loan?

Eligible borrowers must avail of the Calamity Loan within a period of 90 days from the
declaration of a state of calamity.

6.) What are the documentary requirements for the loan application?

• Completely filled-up Calamity Loan Application Form*

• Photocopy of at least 2 valid IDs

• Proof of Income

• For formally employed members, duly accomplished Declaration of Being Affected by

Calamity*.

* Said documents can be downloaded from the Pag-IBIG Fund website at

www.pagibigfund.gov.ph or can be secured at any Pag-IBIG Fund office.

7.) Where can one apply for a loan?

The borrower may submit his requirements to any Pag-IBIG Office nationwide.

Additional Requirements for Calamity Loan

1. For formally-employed members,
- Declaration of Being Affected by Calamity (FLS006)
2. For farmers, including landlords, fisher folks and livestock farmers,
- Certification from the Municipal Agricultural Office (MAO) that their products were
damaged/killed due to the calamity.
3. For business owners/market vendors,
- Certification from the Market Vendors Association or certification from the Municipal
Mayor (if not member of the association) attesting that he is engaged in the selling of
farm products, vegetable, meat or fish and that his source of livelihood was affected by
the calamity.
4. For Pag-IBIG Members or any of his immediate family members afflicted by diseases
such as diarrhea, cholera, skin diseases, paralytic shellfish poisoning (red tide bloom),
heat cramps, heat exhaustion, heat stroke, chickenpox, measles and hypertension,
- A Medical Certificate from the Doctor stating that such disease/illness is brought by
the onset of calamity.
II. HOUSING PROGRAMS

This housing loan program grants opportunities to Pag-IBIG Fund members to avail of housing
loans to finance any one or a combination of the following:

1.) Purchase of a fully developed lot not exceeding 1,000 square meters, which should be
within a residential area;

2.) Purchase of a residential house and lot, townhouse or condominium unit, inclusive of a
parking slot, which may be:

 Old or brand new;

 A property mortgaged with the Fund; or
 An acquired asset, which is disposed of through sealed public bidding, negotiated sale,
the Rent-to-Own Program, or the “Magaang Pabahay, Disenteng Buhay” Program.

3.) Construction or completion of a residential unit on a lot owned by the member;

4.) Home improvement, i.e. any alteration in an existing residential unit intended by a
homeowner to be a permanent integral part thereof, which will enhance its durability and
material value;

5.) Refinancing of an existing mortgage with an institution acceptable to the Fund, provided
that:

The loan is not in default within 12 months prior to the date of application;

The said loan has a repayment history of at least two (2) years with the original mortgagee

6.) Combination of loan purposes, which shall be limited to the following:

 Purchase of a fully developed lot not exceeding 1,000 square meters and construction of
a residential unit thereon;
 Purchase of a residential unit, whether old or new, with home improvement;
 Refinancing of an existing mortgage with home improvement;
 Refinancing of an existing mortgage, specifically a lot loan, with construction of a
residential unit thereon.

There are two (2) modes of applying for a Pag-IBIG housing loan:

(a) Developer-Assisted - the developer assists the member in his/her housing loan
application and

(b) Retail - the member applies directly to the Fund.

“Maagang Pabahay, Disenteng Buhay” Program

In celebration of the National Shelter Month last October 2006 and in compliance with
Memorandum Circular No. 112 signed by President Gloria Macapagal Arroyo, the Fund
implemented the “Magaang Pabahay, Disenteng Buhay” Program.

Under this program, the Fund’s acquired assets are put up for sale, initially to government
employees, at reduced rates. Discounts of 15% and 20% are given to interested buyers who
will purchase properties through housing loan and through cash payment, respectively. An
additional discount of 5% is granted to the buyers if the properties they are acquiring are
illegally occupied. Buyers who are opting to pay through housing loan enjoy 6% interest rate for
the entire term of the loan.

Pag-IBIG Fund Loyalty Card

Loyalty cards are now the “in” thing among malls, department stores, supermarkets, retail
shops, boutiques, restaurants, and many others. Following this trend, the Pag-IBIG Fund also
recently launched its own version. With the new Pag-IBIG Fund Loyalty Card, a member can
enjoy special rewards and discounts when they pay for their medicine, tuition, fuel, and many
more. All they have to do is go to the nearest Pag-IBIG Fund office, apply for a loyalty card
(can be had for a fee of Php100), and enjoy rebates and points for purchases made with the
agency’s partner merchants.

Wide-ranging Payment Facilities and E-services

To ensure easier and faster transactions, individual paying members of the Pag-IBIG Fund can
choose from a variety of payment channels. The Pag-IBIG Fund now accepts payments made
through Bayad Center outlets, SM Business Centers, Save More, and SM Hypermarket. Members
can also pay their monthly contributions through Globe’s GCASH service or using their Visa or
MasterCard credit card.
References
Housing Loan Programs. (n.d.). Retrieved from Home Developmet Mutual Fund:
http://pagibigfund.gov.ph/benpro.aspx

Lamudi. (2016, July 29). Six Unexpected Benefits of Being a Pag-IBIG Fund Member. Retrieved from
http://www.lamudi.com.ph/journal/six-unexpected-benefits-of-being-a-pag-ibig-fund-member/

Membership Programs. (n.d.). Retrieved from Home Development Mutual Fund:

http://pagibigfund.gov.ph/benpromembership.aspx

Provident Programs. (n.d.). Retrieved from Home Development Mutual Fund:

http://pagibigfund.gov.ph/benproprovident.aspx