AFTER several months of public consultation, Home Development Mutual Fund (HDMF), more popularly known as the 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 last 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,” Secretary Eduardo D. del Rosario, chairman of the Housing and Urban Development Coordinating Council and Pag-IBIG Fund board of trustees, was quoted in a statement as saying. “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.”
Del Rosario added housing officials spent the last six months consulting with labor unions, non-government organizations of overseas Filipino workers, employer groups, and other stakeholders to seek their views on our plan to increase the membership savings rate.”
He said that from April to September,
Pag-IBIG Fund executives have been in talks with the Trade Union Congress of
the Philippines, Philippine Government Employees Association, Kapisanan ng mga
Manggagawa sa GOCCs at GFIs, Federation of Free Workers, the Filipino Migrant
Workers Group, the National Anti-Poverty Commission, and the
Employers Confederation of the Philippines.
Pag-IBIG Fund CEO Acmad Rizaldy P. Moti was quoted in the statement as saying 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.
According to Moti, the demand for HDMF home loans has grown annually at an average of 17.5 percent in the past five 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,” he said adding that this is the highest-ever amount released for any January-to-September period, and is a 13.5-percent 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-percent average growth rate in home loans until 2024,” Moti said. “But as we expect demand to remain strong with growth at around 15 percent 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.”
He said the HDMF is proposing to adjust the members’ savings rate to P200 per month by 2021, which will be matched by an equivalent amount by their employers.
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, Moti added. He said the HMDF wishes to remind its members “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,” Moti said. “They will also receive higher lump-sum savings once they retire, or once they reach 20-year membership maturity,” he added.
Image credits: Roy Domingo