Pag-IBIG Fund said Wednesday it will soon raise the three-decade-old mandatory savings rate of P100 per month of its members, and after months of public consultations and getting the support of labor and employer groups.
Pag-IBIG said that, on Nov. 6, the agency’s 11-member board approved the increase from P100 to P150 by January 2021 and to P200 by January 2023.
The same increase will also be applied to the counterpart share of employers.
“For us to continue offering the lowest loan rates to our members, the Pag-IBIG Fund board has thoroughly discussed as early as the first quarter of this year the need to increase the monthly savings of our members,” said Secretary Eduardo del Rosario, chairman of the Housing and Urban Development Coordinating Council and Pag-IBIG Fund board of trustees.
“And, because President Rodrigo Roa Duterte has standing orders to consider the plight of the Filipino workers, we have decided to implement the adjustment over a staggered period to allow all our stakeholders to prepare.”
Pag-IBIG Fund chief executive Acmad Rizaldy Moti said the increase in the demand for the agency’s home loans may soon outpace the growth in its collections partly derived from the P100 monthly savings of its members.
He said the agency’s home loan releases alone grew at an average rate of 17.5 percent annually in the last five years.
“The demand for our home loans has grown tremendously through recent years. To give you a better idea, in 2014 our home loan releases totaled P40.5 billion, but in 2018 the amount almost doubled to P75.3 billion,” Moti said.
“And we have been able to sustain the double-digit growth so far in 2019. Our home loan releases from January to October increased 13 percent year-on-year to P66.47 billion.
“At the current monthly savings rate, in addition to our housing and short-term loan payment collections, we have more than enough funds to support up to 10 percent average growth rate in home loans.
“But we expect demand to remain strong with a growth of around 15 percent annually in the coming years. Adjusting the monthly savings amount will provide the necessary additional funds to sustain the low loan interest rates we currently offer to our members.”
Moti said they spent the past several months consulting with labor unions, non-government organizations, employer groups and other stakeholders on the planned increase.
“I’m happy to report that our stakeholders have expressed their support in raising the monthly savings of our members, as well as the counterpart share of employers,” Moti said.
“We thank them for recognizing that the increase in monthly savings is an increase in members’ benefits because every peso they save will go to their Pag-IBIG Fund Savings, entitle them to higher cash loans at low rates should they need it, and allow them to earn higher dividends annually.”