After months of public consultations and getting the support of both labor and employer groups, Pag-IBIG Fund will soon raise the three decades-old P100 monthly savings rate of its members.
On November 6, the agency’s 11-member Board of Trustees approved the increase of the Pag-IBIG Fund members’ mandatory monthly savings from the current P100 to P150 by January 2021, and to P200 by January 2023. The same increase shall also be applied to the counterpart share shouldered by 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. 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,” said Secretary Eduardo D. del Rosario, Chairman of the Housing and Urban Development Coordinating Council (HUDCC) and Pag-IBIG Fund Board of Trustees.
Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti noted that 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 that the agency’s home loan releases alone have been growing at an average rate of 17.5% 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. 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% year-on-year to P66.47 billion,” Moti said.
“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% average growth rate in home loans. But we expect demand to remain strong with growth at around 15% 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,” he added.
Moti also said that they spent the past several months consulting the planned increase with labor unions, OFW non-government organizations (NGOs), employer groups, and other stakeholders.
“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. 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,” Moti said.