MANILA, Philippines — A labor group is backing the long-delayed contribution hike of the Home Development Mutual Fund, commonly known as Pag-IBIG Fund, to ensure increased benefits among members.
The Trade Union Congress of the Philippines (TUCP) said in a letter to Pag-IBIG that it supports the plan to increase the mandatory monthly savings rate of members starting this month.
This has been TUCP’s position a few years ago but Pag-IBIG deferred such a decision due to the COVID-19 pandemic.
TUCP is one of the country’s largest labor organizations and is composed of 27 labor federations representing workers in the private and public sectors, seafarers, overseas Filipino workers (OFWs) and workers from the informal sector.
TUCP president and House deputy speaker Democrito Mendoza said the adjustment in the savings rates would double the amount of members’ maturity claims, as well as other important benefits of Pag-IBIG members.
These include cash loans, calamity loans and housing loan entitlements.
“An adjustment is necessary to restore the lost real value of the P100 minimum contribution which was set all the way back in 1986,” Mendoza said.
He added that increasing the rates would enable Pag-IBIG to sustain its affordable home loan interest rates.
The rate increase would boost Pag-IBIG resources by about P34 billion annually.
With this, an employee will be adding P100 and will be matched by the employer for the same amount.
Pag-IBIG currently has 15.58 million active members.
Pag-IBIG CEO Marilene Acosta said the increase in the monthly savings rates would benefit members the most because every peso they save would go to their Pag-IBIG Savings.
“Under our new rates, they will have higher Pag-IBIG Savings that earn annual dividends, which they will receive upon membership maturity or retirement,” Acosta said.
“They will also be entitled to higher multi-purpose and calamity loan amounts to help them with their financial needs,” she said.
In March last year, Pag-IBIG decided to postpone the contribution hike that was supposed to take effect last year as workers and business owners are just recovering from the pandemic.
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The article was originally published in PhilStar Global and written by Louise Maureen Simeon.
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