Pag-IBIG Fund gets nod from labor, employer groups to raise decades-old savings rate

October 23, 2019

After several months of public consultation, Pag-IBIG Fund has secured the support of labor and employer groups to raise the three decades-old P100 monthly savings rate of its members, top executives said Friday.

“The low interest rates of our home loans make homeownership within reach of our members, so much so that the availment of our home loans has grown tremendously. And for us to continue financing the growth in home loans of our members under such low rates, there is a need to increase our members’ P100 monthly savings. But because President Rodrigo Roa Duterte has standing orders to consider the plight of the Filipino workers, we have spent the last six months consulting with labor unions, OFW non-government organizations (NGOs), employer groups, and other stakeholders to seek their views on our plan to increase the membership savings rate,” said Secretary Eduardo D. del Rosario, Chairman of the Housing and Urban Development Coordinating Council (HUDCC) and Pag-IBIG Fund Board of Trustees.

He said that from April to September, Pag-IBIG Fund has been in talks with the Trade Union Congress of the Philippines (TUCP), Philippine Government Employees Association (PGEA), Kapisanan ng mga Manggagawa sa GOCCs at GFIs (KAMAGGFI), Federation of Free Workers (FFW), the Filipino Migrant Workers Group, OFW NGOs, the National Anti-Poverty Commission (NAPC), and the Employers Confederation of the Philippines (ECOP).

Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti explained that the consultations revolved around the agency’s proposal to adjust the monthly savings of Pag-IBIG Fund members, which has remained at P100 for more than three decades.

“Demand for our home loans has grown annually at an average of 17.5% in the past 5 years. We have been able to sustain this double-digit growth in 2019 with the release of P58.73 billion in home loans in the last nine months.  This is the highest-ever amount released for any January to September period and is a 13.5% increase from the P51.76 billion released in the same period last year.  At the current membership savings rate, in addition to our housing and short-term loan collections, we have more than enough funds to support up to 10% average growth rate in home loans until 2024.  But as we expect demand to remain strong with growth at around 15% annually in the coming years, we need to find additional sources of funds to sustain the low loan interest rates we currently offer to our members. Our proposal is to adjust the members’ savings rate to P200 per month by 2021, which will be matched by an equivalent amount by their employers,” Moti said.

The proposed adjustments will provide the agency additional funds to address its loan demand, and thus allow interest rates on its home loans and calamity loan to remain low at least until 2024, he added.

“We thank the labor unions, OFW NGOs, employer groups and all our stakeholders who recognize that raising our savings rate will allow Pag-IBIG Fund to continue to provide affordable home loans to its members in the coming years,” Moti said.

“As for our members, we wish to remind them that this is an increase in their benefit because every peso they save will go to their Pag-IBIG Fund Savings. This will allow them to save more with Pag-IBIG Fund and earn higher dividends annually. They will be entitled to bigger cash loans as a result of their higher savings.  They will also receive higher lump-sum savings once they retire or once they reach 20-year membership maturity,” he added.