The Home Development Mutual Fund otherwise known as Pag-IBIG Fund is planning to revive an earlier proposal for an increase in contribution through flexible options on the part of employee and employer to possibly double its fund to P50 billion.
Pag-IBIG Fund chief executive officer Atty. Darlene Marie B. Berberabe said she will attempt to propose this plan again by next year to the Pag-IBIG Board.
According to Berberabe, the Pag-IBIG board in 2010 already approved to double the monthly contribution to P200 to shore up its fund but this was shoot down because other government financial institutions like PhilHealth and Social Security System were already planning to increase their membership contributions.
Actually, Berberabe said, there was no problem with the employees' part but it was the employers' side as represented by the Employers Confederation of the Philippines who opposed the increase in contribution because it would cause additional burden on their part with the implementation of the increased SSS and PhilHealth mandatory contributions.
As a result, the Pag-IBIG Board passed a resolution not to implement the decision.
Vice-president Jejomar Binay, who is also Pag-IBIG chairman, then directed Pag-IBIG to raise its funds by recruiting more members. At that time, there were only 9 million members including overseas Filipino workers.
"So in two years, we are able to increase our membership by 3.6 million," said Berberabe.
The increase in membership has also raised its collections to P25 billion last year from an estimated P23 billion fund in 2011.
This, she said, could possibly justify a revival of its plan to also increase their mandatory contributions.
"I will attempt to bring this up next year," she said.
According to Berberabe, there are plans to make the increase in contributions more flexible. It could be that it would start from the employees first or the employers can contribute lesser than the employees.
Doubling of the members' P100 monthly contribution could possibly double the Pag-IBIG fund to P50 billion.
With bigger funds, Pag-IBIG can expand its loans to real estate developers and individual housing loans.
So far, Pag-IBIG accounts for 50 percent of the total mortgage industry as the Central Bank has imposed a 20 percent capped on real estate loans to ensure there is no overexposure in the real estate sector.
Savings through Pag-IBIG also earns more, Berberabe said. Under its Modified Pag-IBIG 2 program, interest on savings this year alone is 4.17 percent or a five-year average interest of between 4 to 5 percent.
Aside from the high interest income, Pag-IBIG savings are government guaranteed and tax free. (BCM)