Historical Background of Home Development Fund or Pag-IBIG Fund

The birth of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund, was an answer to the need for a national savings program and an affordable shelter financing for the Filipino worker. The Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530 primarily to address these two basic yet equally important needs. Under the said law, there were two agencies that administered the Fund. The Social Security System handled the funds of private employees, while the Government Service Insurance System handled the savings of government workers. Less than a year after on 1 March 1979, Executive Order No. 527 was signed. The order directed transferring the administration of the Fund to the National Home Mortgage Finance Corporation, which was one of the operating agencies of the then Ministry of Human Settlements. Seeing the need to further strengthen the stability and viability of the two funds, Executive Order No. 538 was issued on 4 June 1979, merging the funds for private and government personnel into what is now known as the Pag-IBIG Fund. However, it was only on 14 December 1980 when Pag-IBIG was made independent from the NHMFC with the signing of PD 1752, which amended PD 1530. With the improved law in effect, the Fund's rule-making power was vested in its own Board of Trustees. Likewise, PD 1752 made Pag-IBIG membership mandatory for all SSS and GSIS member-employees. Months after former President Corazon Aquino assumed leadership in the country, PAGIBIG Contributions were suspended from May to July 1986. On August 1, 1986, she directed the resumption of PAG-IBIG membership under Executive order No. 35. Membership was still mandatory basis but under more liberal terms. The employee and employer rates were reduced, and the maximum fund salary was raised from P3,000 to P5,000. January 1, 1987 marked the return of the PAG-IBIG Fund to a voluntary program under Executive Order No. 90. It was during the years as voluntary fund that PAG-IBIG introduced innovative benefit programs that heeded the calls for expansion of membership, and addressed the immediate financial as well as housing needs of its members.

After eight years as a voluntary fund, PAG-IBIG membership reverted to mandatory on June 17, 1994 when former President Fidel V. Ramos signed Republic Act No. 7742 which became effective on January 1, 1995. More than a decade after Republic Act 7742 was implemented, the PAG-IBIG fund, former President Gloria Macapagal-Arroyo signed into a law Republic Act No. 9679 or the Home Development Mutual Fund Law of 2009 on July 21, 2009. This law made PAG-IBIG membership mandatory for all, including Filipinos employed by foreign-based employers.

Vision
To be the premier and globally competitive provident and financial institution.

Mission
To uplift the quality of life of the members through savings.

Goals
1. To motivate the employed and other earning groups to save, with contributory support of the employers, through an integrated nationwide provident savings system. 2. To provide affordable housing finance to the Funds members to enable them to meet their housing needs.

Membership
A. Mandatory Membership
y y Employers and employees who should be covered by the SSS and the GSIS; Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, Bureau of Jail Management and Penology, and the Philippine National Police; y Filipinos employed by foreign-based employers, whether they are deployed here or abroad or a combination thereof.

B. Voluntary Membership
Membership to the Fund is also open to individuals 18 to 65 years old, provided they comply with the set rules and regulations for Pag-IBIG members including the amount of contribution and schedule of payment. This may include the following: y 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. y 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; y Employees of an employer who is granted a waiver or suspension of coverage by the Fund under RA 9679; y y Leaders and members of religious groups; A member separated from employment, local or abroad, or ceased to be selfemployed but would like to continue paying his personal contribution. Such member may be a pensioner, investor, or any other individual with passive income or allowances; y Public officials or employees who are not covered by the GSIS such as Barangay Officials, including Barangay Chairmen, Barangay Council Members, Chairmen of the Sangguniang Kabataan, and Barangay Secretaries and Treasurers;

Such other earning individuals or groups as may be determined by the Board by rules and regulations.

Requirement for Application of Pag-IBIG Membership

y One Valid ID, which may be any of the following o o o o o o o Company ID Passport Drivers License Professional Regulation Commission ID Social Security System Card Government Service Insurance System e-Card Government Office and GOCC ID  o o o o o o o e.g. Armed Forces of the Philippines ID Integrated Bar of the Philippines ID Senior Citizen Card Overseas Workers Welfare Administration ID Overseas Filipino Worker ID Seafarers Identification and Record Book Postal ID Voters ID

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

Membership Registration
1. Log on to Pag-IBIG Fund website at www.pag-ibigfund.gov.ph. 2. Accomplish and submit on-line membership registration form. 3. Print system-generated Membership Data Form (MDF) reflecting Registration Tracking Number . 4. Proceed to the nearest Pag-IBIG NCR/Regional Branch or any extension service office or field service center. 5. Present system-generated MDF and pay Membership Contribution.

Member Contribution
The contribution of all members, except for non-working spouses of Pag-IBIG members, shall be as follows:

Monthly Compensation Contribution Rate Employee Employer (if any) P1,500 and below Over P1,500 1.0% 2.0% 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 or her monthly compensation. Said employee may opt to pay the employer counterpart. The maximum monthly compensation to be used in computing the employee and employer contributions shall not be more than P5,000.00 Employer shall remit 2% of the monthly compensation of the contributing member as counterpart contribution. The employer is not entitled to deduct from wages or remuneration of or, otherwise recover from the employee the employers contribution.

A Non-Working Spouse of a Pag-IBIG member shall contribute as follows:

50% of Working Spouses Monthly Compensation Contribution Rate P1,500 and below Over P1,500 1.0% 2.0%

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

Remittance of Contribution to the Fund

Formally employed members shall contribute through salary deduction. The employees shall have the responsibility to remit said contributions to the Fund on a monthly basis. Other members may pay directly to the Fund through any of its authorized agents. For those who want to contribute per month, contributions must be remitted on or before the 10th day of the following month. For quarterly contributions, remittance must be made on or before the 10th day of the first month of the following quarter. Pag-IBIG Overseas Program (POP) members shall remit in accordance with the rates herein prescribed.

Duration of Pag-IBIG Membership

Membership with the Fund shall be for a term of 20 years with a total of 240 monthly membership contributions or upon the occurrence of any of the following grounds for membership termination: y y y y y y Membership term maturity Death Retirement Permanent Total Disability or Insanity Termination from service by reason of health Other causes as may be provided for by the Board of Trustees

List of Pag-IBIG Programs and Services

A. Short-Term Loan (STL) Program
a.) Multi-Purpose Loan Program (MPL) this program aims to provide financial assistance to Pag-IBIG members for purposes of minor home improvement, livelihood, medical, education, purchase of appliance and furniture and other needs. Borrower Eligibility New Loan y y With at least 24 monthly contributions. An active member at the time of loan application, with at least five monthly contributions for the last six months. y Member-applicants net take home pay shall not fall below the minimum requirement of the General Appropriations Act (GAA) or company policy, whichever is applicable. y If with existing calamity loan, a member shall be allowed to avail of the MPL only after payment of at least six monthly amortizations. The outstanding balance, together with any accrued interests, penalties and charges, shall be deducted from the proceeds of MPL. Loan Renewal y With payment of at least six amortizations. The outstanding balance, together with any accumulated interests, penalties and charges, shall be deducted from the proceeds of the new loan. y An active member at the time of loan application, with at least five monthly contributions for the last six months. y Member-applicants net take home pay shall not fall below the minimum requirement of the General Appropriations Act (GAA) or company policy, whichever is applicable. b.) Calamity Loan Program This program aims to provide financial assistance to PagIBIG Fund member-victims in calamity-stricken areas, as declared b the Office of the President or the Sangguiniang Bayan.

Borrower Eligibility New Loan y y With at least 24 monthly contributions. An active member at the time of loan application, with at least five monthly contributions for the last six months. y Member-applicants net take home pay shall not fall below the minimum requirement of the General Appropriations Act (GAA) or company policy, whichever is applicable. y y A resident of the calamity-stricken area. If with existing MPL, the outstanding balance, together with any accrued interests, penalties and charges, shall be deducted from the proceeds of the calamity loan. Loan Renewal y Should another calamity occur in the same area, the borrower may renew his calamity loan any time. The outstanding balance of his existing loan, together with any accrued interests, penalties and charges, shall be deducted from the proceeds of the new loan. Availment Period The member must avail of a loan under the program within a period of 90 days from the occurrence of the calamity. Additional Requirements for Calamity Loan 1.) For formally-employed members y Declaration of Being Affected by Calamity

2.) For farmers, including landlords, fisher folks and livestock farmers y Certification from the Municipal Agricultural Office that their products were damaged or killed due to calamity. 3.) For business owners or market investors y Certification from Market Vendors Association or certification from Municipal Mayor, if not member of association, attesting that it is

engaged in selling of farm products, vegetable, meat or fish and his source of livelihood was affected by calamity. 4.) For Pag-IBIG Members or any of his immediate family members affected by diseases such as diarrhea, cholera, skin diseases, paralytic shellfish poisoning (red tide bloom), heat cramps, heat exhaustion, heat stroke, chickenpox, measles and hypertension y Medical Certificate from the doctor and such occurrence was caused or aggravated by the said calamity.

B. Provident Benefits Claim

Pag-IBIG Fund guarantees the refund of the members Total Accumulated Savings (TAV), which consists of the members accumulated contributions, the employer counterpart contributions, if any, and the dividend earnings credited to the members account of any of the following grounds of withdrawal: 1.) Membership Maturity the member must have remitted at least 240 monthly membership contributions with the Fund. For the Pag-IBIG Overseas Program (POP) members, membership with the Fund shall be at the end of 5, 10, 15 or 20 years, depending on the option of the member upon membership registration. 2.) Retirement the members shall be compulsorily retired upon reaching age 65. He may, however, opt to retire upon the occurrence of the following: y Actual retirement from SSS, the GSIS or a separate employer provident or retirement plan, provided that member has at least reached 45. y Upon reaching the age 60. 3.) Permanent and Total Disability or Insanity the following disabilities shall be deemed total and permanent y Temporary total disability lasting continuously for more than 120 days. y Complete loss of both eyes. y Loss of two limbs or over the ankle or wrist. y Brain injury resulting in incurable imbecility or insanity y Such other causes which are adjudged to be total and permanent disability by duly licensed physician and approved by Board of Trustees.

4.) Separation from service due to health reason. 5.) Permanent departure from the country 6.) Death the Fund benefits shall be divided among the members legal heirs in accordance with the New Civil Code as amended by the Family Code. C. Housing Loans a. ) Maagang Pabahay, Disenteng Buhay Program (Circular No. 266) Under this program, the Funds acquired assets are put up for sale, initially to government employees, at reduced rates. Discounts of 15% to 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 loan. b.) End-User Financial Program (Circular No. 247) Under the End-User Financing Program, a member may avail of a loan to finance any of the following: a.) Purchase of a fully developed lot not exceeding one 1,000 square meters, which should be within a residential area b.) Purchase of a residential house and lot, townhouse or condominium unit, inclusive of a parking slot. The unit may be y Old or brand new y A property mortgaged with the Fund; or y An acquired asset, which is disposed of through sealed public bidding, negotiated sale, or the Rent-to-Own Program. c.) Construction or completion of a residential unit on a lot owned by the member. d.) Home improvement y Like any alteration in an existing residential unit intended by a homeowner to be a permanent integral part of the property, which will enhance its durability and material value;

e.) Refinancing of an existing mortgage with an institution acceptable to the Fund, provided that: y The loan is not in default within the 12 months prior to the date of application; y The said loan has a repayment history of at two years with the original mortgagee f.) Combination of loan purposes, which shall be limited to the following: y Purchase of a fully developed lot not exceeding 1,000square meters and construction of a residential unit thereon; y Purchase of a residential unit, whether old or new, with home improvement; y Refinancing of an existing mortgage with home improvement;

To qualify for a Pag-IBIG housing loan, a member must satisfy the following requirements: 1. Must be a member under the Pag-IBIG I for at least 24 months, as evidenced by the remittance of at least 24 monthly contributions at the time of loan application. 2. Not more than 65 years old at the date of loan application and must be insurable; provided further that he is not more than 70 years old at loan maturity; 3. Has the legal capacity to acquire and encumber real property; 4. Has passed satisfactory background/credit and employment/business checks conducted by the developer and the Pag-IBIG Fund; 5. Has no outstanding Pag-IBIG housing loan, either as a principal borrower or coborrower; 6. Has not availed of a Pag-IBIG housing loan that was foreclosed, cancelled, bought back due to default, or subjected to dacion en pago, which shall include cases where the borrower is no longer interested to pursue the loan and surrenders the property; 7. May have an outstanding Pag-IBIG multi-purpose loan but which is updated in payments at the time of loan application. A member whose multi-purpose loan is in arrears shall be required to pay his arrears over the counter to update his account.

Documents Required Upon Loan Application

1. Housing Loan Application with recent ID photos of borrower 2. Membership Status Verification Slip 3. Proof of Income 3.1. For locally-employed, any of the following: y y Notarized certificate of employment and compensation (Pag-IBIG format) Notarized certificate of employment and compensation (Employers format) y Income Tax Return or Certificate of Tax Withheld (BIR Form No. 2316) and latest one month payslip 3.2. For Self-Employed/Other Sources of Income y ITR, Audited Financial Statements, and Official Receipt of tax payment from bank supported with DTI Registration and Mayors Business Permit. y Commission vouchers reflecting the issuers name and contact details (for the last 12 months) y Bank statements or passbook for the last 12 months (in case income is sourced from foreign remittances, pensions, etc.) y Copy of Lease Contract and Tax Declarations (if income is rental payments) y Certified True Copy of Transport Franchise issued by appropriate government agency (LGU for tricycles, LTFRB for other Public Utility Vehicles) y y Certificate of Engagement issued by owners of business Other documents that would validate sources of income

3.3. For Overseas Filipino Workers y y Employment Contract (with English translation if in foreign language) Original Employers Certificate of Income (with English translation if in foreign language). If document submitted is photocopy, it shall be duly

validated and certified/initiated by HDMF Information Officer assigned in the country where member works. y Other proofs of Income, whether original or photocopy, shall be duly validated and certified or imitated by HDMF Information Officer assigned in the country where the member works. 4. Photocopy (back-to-back) of one valid ID of principal borrower and spouse, co-borrower and spouse, and attorney-in-fact, if applicable. The same ID must be presented during the conduct of borrowers validation. 5. Contract to Sell or similar agreement between buyer and seller. 6. Authorization to Conduct or Credit Background Investigation. 7. For OFWs, Special Power of Attorney notarized to date of departure or duly certified and authenticated by the Philippine Embassy or Consulate in the country where member is staying, if abroad. 8. Insurance Coverage a. Health Statement Form (Medical Questionnaire) i. OFW members over 60 years old ii. Loans over P2.0 M to P3.0 M and aged up to 60 years old. 9. Marriage Contract (for all married borrower/s, co-borrower/s, spouse, family member/s included on the computation of aggregate income) 10. Birth Certificate or any proof of relationship if with co-borrower/s or family members included on computation of aggregate income.