Pag-IBIG contribution to increase in January

MANILA, Philippines — The Home Development Mutual Fund, commonly known as Pag-IBIG Fund, is expected to finally push through with the long delayed contribution hike at the onset of the new year.

Pag-IBIG CEO Marilene Acosta said the agency is awaiting the final papers from President Marcos for the contribution hike, scheduled to take effect in January 2024.

“It will continue, we already informed the President. It’s good to go,” Acosta told reporters. 

“We just want something in writing and we already sent the memo last week of November,” she said.

Acosta expressed confidence that there would be no objection to the contribution increase given that it has not been done for nearly four decades now. 

“The President is also aware that the last time that the contribution rate was set was 1986. It is long overdue,” Acosta said.

The rate increase is expected to translate to about P34 billion in Pag-IBIG resources annually. With this, an employee will be adding P100 and will be matched by the employer for the same amount. 

“Those savings if translated into housing units (that we can finance) will be a lot. The additional P100 will go to their savings and we also give dividends,” Acosta 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 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.

Currently, Pag-IBIG has 15.58 million active members.

Pag-IBIG  was originally scheduled to raise contribution rates in 2021, considering the increase as necessary.

At that time, Pag-IBIG  projected that the amount of loans disbursed would eventually outpace the total collections from both loan payments and members’ contributions.

However, the move was deferred for three years due to the impacts of the pandemic on members and the business community.