GROUP 5

PAG-IBIG
MEMBERS:
Lababo, Andro
Licodini, Jessica
Limbago, Raiza
Malaiba, Allina Angela
Manalop, Argel
Manzano, Allaiza

BBF 4-15s
THE BIRTH OF THE HOME DEVELOPMENT MUTUAL FUND

The birth of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund,
was an answer to the need for a national savings program and an affordable shelter financing for the
Filipino worker. The Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530
primarily to address these two basic yet equally important needs. Under the said law, there were two
agencies that administered the Fund. The Social Security System handled the funds of private employees,
while the Government Service Insurance System handled the savings of government workers.

Less than a year after on 1 March 1979, Executive Order No. 527 was signed. The order directed
transferring the administration of the Fund to the National Home Mortgage Finance Corporation, which
was one of the operating agencies of the then Ministry of Human Settlements.

Seeing the need to further strengthen the stability and viability of the two funds, Executive Order No. 538
was issued on 4 June 1979, merging the funds for private and government personnel into what is now
known as the Pag-IBIG Fund. However, It was only on 14 December 1980 when Pag-IBIG was made
independent from the NHMFC with the signing of PD 1752, which amended PD 1530. With the improved
law in effect, the Fund's rule-making power was vested in its own Board of Trustees. Likewise, PD 1752
made Pag-IBIG membership mandatory for all SSS and GSIS member-employees.

A NEW ADMINISTRATION, SOME CHANGES IN PAG-IBIG

Months after former President Corazon C. Aquino assumed leadership of the country, Pag-IBIG
contributions were suspended from May to July 1986. This gave way to the Presidential Task Force on
Shelter to conduct a thorough review of the Fund and its operations. The task force later affirmed that Pag-
IBIG Fund was run professionally and that there were no anomalies in the Fund. On 1 August 1986, former
President Aquino directed the resumption of Pag-IBIG membership under Executive Order No. 35.
Membership was still on a mandatory basis but under more liberal terms. For one, contribution rate was
reduced from three percent to one percent for employees earning over P1,500. Employer share was
likewise cut from three percent to a fixed rate of two percent. The Maximum Fund Salary was raised from
P3,000 to P5,000.

1 January 1987 marked the return of the Pag-IBIG Fund to a voluntary program under Executive Order No.
90. While many companies chose to discontinue their Pag-IBIG membership, quite a number, including big
companies like PLDT and Dole Philippines, nevertheless opted to retain their membership to the Fund
despite the voluntary nature of registration.merging the funds for private and government personnel into
what is now known as the Pag-IBIG Fund. However, It was only on 14 December 1980 when Pag-IBIG was
made independent from the NHMFC with the signing of PD 1752, which amended PD 1530. With the
improved law in effect, the Fund's rule-making power was vested in its own Board of Trustees. Likewise, PD
1752 made Pag-IBIG membership mandatory for all SSS and GSIS member-employees.

FACING CHALLENGES HEAD ON

 Confronted with the sudden reduction in its membership base, Pag-IBIG stood unfazed and took the
challenges head on. As a first step, the Fund implemented an intensified marketing campaign that focused
on membership retention and generation.

It was during the years as a voluntary fund that Pag-IBIG evolved from an institution primarily for savings
and housing into an agency with a wider reach that covers almost all other needs.

Pag-IBIG introduced innovative benefit programs that heeded the calls for expansion of membership to
include self-employed groups with informal income, overseas Filipino workers, and non-earning spouses. It
also launched other novel programs such as the Multi-Purpose Loan for its short-term loans program, and
shelter programs that address both individual and institutional housing requirements.

Clearly, the voluntary nature of Pag-IBIG membership did not stop the Fund from growing in depth and
breadth. During the period, the Pag-IBIG Fund has claimed its rightful place in the country's economic and
financial system, finally gaining the acceptance of its members, not by force, but by its continuing efforts to
impress upon the members that the Fund exists solely for their benefit as well as their beneficiaries.

After eight years as a voluntary fund, the nature of Pag-IBIG membership reverted to mandatory on 17
June 1994 when President Fidel V. Ramos signed Republic Act 7742. The new law became effective on 1
January 1995.

Today, more than a decade after the universal Pag-IBIG coverage law was implemented, the Pag-IBIG Fund
continues to be a strong partner in realizing Filipino workers' dreams. Over the years, it initiated more
programs and projects, particularly those that address the needs of members belonging to the bottom
economic level. The Fund has established special housing partnerships with teachers and uniformed men,
among others. The Rent-to-Own Program was introduced, providing members another affordable way of
homeownership.

The Fund's efforts towards housing the Filipino did not go unnoticed. During the World Habitat Day
celebration in October 2006, Pag-IBIG was given the prestigious Scroll of Honour Awards by the United
Nations Human Settlements Program (UN-Habitat) for "making the dream of affordable housing a reality
for hundreds of thousands of households." Pag-IBIG is the first Philippine government agency to be
awarded such recognition.

The Fund likewise strengthened its partnership with accredited developers by way of its various
institutional lending programs, among which is the much-sought after program for the development of
medium and high-rise condominium buildings. The program provides a ready inventory of condominium
units for sale at affordable prices, and allows members to experience condominium style living in areas
close to their places of work.

In recent years, the Fund has embarked on its successful bid in the financial market, moving a step closer to
its vision of becoming a premier and globally competitive provident financial institution. In 2001, the Fund
floated P2 billion-worth of Pag-IBIG Housing Bonds to generate additional funds for its shelter financing
programs, which was warmly received by both institutional and individual investors. The bonds matured in
late 2006.

HDMF LAW OF 2009

 Recognizing HDMF's contributions through the years and the need to further strengthen its capability as
the biggest source of housing finance in the country to date, President Gloria Macapagal-Arroyo signed
into law Republic Act No. 9679 or the Home Development Mutual Fund Law of 2009. The law was signed
on 21 July 2009.

Under the new HDMF law, membership to the Pag-IBIG Fund is made mandatory for all SSS- and GSIS-
covered employees; uniformed members of the AFP, BFP, BJMP and PNP; as well as Filipinos employed by
foreign-based employers. Now more than ever, Filipino workers will enjoy the benefits that are available
only to Pag-IBIG members.

Likewise, the law grants the HDMF exemption from tax payments like other government provident
institutions. With its tax-exempt status reinstated, Pag-IBIG will have more funds to finance housing and
short-term loans as well as investments in government securities. Income from these endeavors is
distributed exclusively to Pag-IBIG members in the form of dividends.

The HDMF Law of 2009 also gives the Board of Trustees the authority to set the contribution rates, thereby
paving the way for members to save more for their future. Similarly, this will bolster the Fund's resources
for home financing.

Pag-IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at
Gobyerno. To this day, the Pag-IBIG Fund continues to harness these four sectors of the society to work
together towards providing Fund members with adequate housing through an effective savings scheme.

IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9679

Or the

“Home Development Mutual Fund Law of 2009, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan:
lkaw, Bangko, Industriya at Gobyerno) Fund”

HOME DEVELOPMENT MUTUAL FUND

RULE| PRELIMINARY PROVISIONS

Section 1. Title. These Rules shall be referred to as the Rules and Regulations Implementing Republic Act No. 9679
or the Home Development Mutual Fund Law of 2009, otherwise known as Pag- IBIG (Pagtutulungan sa
Kinabukasan: lkaw, Bangko, Industriya at Gobyerno) Fund”.

Section 2. Construction. Any doubt in the interpretation of these Rules shall be resolved in favor of the members.

RULE Il DECLARATION OF STATE POLICY AND STATEMENT OF THE FUND’S OBJECTIVES

Section 1. Declaration of State Policy. It is the policy of the State to establish, develop, promote, and integrate a
nationwide sound and viable tax-exempt mutual provident savings system suitable to the needs of the employed
and other earning groups, and to motivate them to better plan and provide for their housing needs, by
membership in the Home Development Mutual Fund, with mandatory contributory support of the employers in
the spirit of social justice and the pursuit of national development.

Section 2. Statement of Fund’s Objectives. In general, the objectives of the Fund are:
a.Improve the quality of life of its members by developing and promoting an integrated nationwide, sound, and
viable tax-exempt mutual provident savings system suitable to the needs of the employed and other earning
groups;

b.Improve the quality of life of its members by promoting home ownership through the extension of affordable
housing loans;

c. Stimulate and assist the shelter industry through the extension of developmental and institutional financing;

d.Invest the provident savings of its members taking into consideration profitability and safety of the funds as a
means of providing them provident benefits upon termination of their membership in the Fund;

e.Provide small and short term loans, other benefits and assistance programs to its members, consistent with the
Fund's provident character; and

f. Design and implement other programs that shall further promote and mobilize savings and provide
additional resources for the mutual benefit of its members with appropriate returns on the savings and
investments.

RULE Il DEFINITION OF TERMS

Section 1. Definition of Terms. For purposes of these Rules and Regulations, the following terms shall, unless the
context indicates otherwise, have the following meanings:

a.Beneficiaries. Person or persons who are entitled to receive the member's TAV arising from the death of the
member who shall be the heirs, as provided for under the Civil Code of the Philippines, of said member.

b. Board. The duly constituted Board of Trustees of the Home Development Mutual Fund.

c.Compensation. Basic monthly salary plus mandated cost of living allowance (COLA). Basic monthly salary shall
refer to compensation for services in whatever form paid, including but not limited to fees, salaries, wages, and
similar items received in a month. It shall mean the remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or
other method of calculating the same, which is payable by an employer to an employee or by one person to
another under a written or unwritten contract of employment for work done or to be done, or for services
rendered or to be rendered.

d.Contributions. The amount payable to the Fund by the members and/or their employers, in accordance with R.A.
9679 and these Rules.

e.Dividends. A corporate profit set aside, declared and ordered by the Board of Trustees to be paid to the
members proportionately according to their respective interests which shall be credited to their Total
Accumulated Value, payable out of the netincome of the preceding year.

f. Employee. Any person who performs services for an employer in which either or both mental and physical
efforts are used and who receives any compensation for such service.

g.Employer. Any person, natural or juridical, domestic or foreign, who carries on in the Philippines, or outside of
the Philippines, any trade, business, industry, undertaking or activity of any kind, and uses the services of another
person who is under his order as regards such services; the Government and any of its national and local offices,
political subdivisions, branches, agencies, or instrumentalities, including corporations owned and/or controlled by
the government.

h.Employment. Any service performed by an employee for his or her employer within the Philippines.
i. Fund. The Home Development Mutual Fund, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan:
l|kaw, Bangko, Industriya at Gobyerno) Fund, created under R.A. 9679, whichis a government financial
institution involved in mobilizing provident funds primarily for shelter finance .

It replaces the Home Development Mutual Fund established under Presidential Decree No. 1752.

j. GSIS. The Government Service Insurance System created under Commonwealth Act No. 186, as amended.

k.Investible Funds. The funds available for investments after

deducting cost of operations and expenses, reserves for benefit claims, provisions for a sinking fund for the return
of the members’ equity upon maturity and provision for reserve for loan repayments.

. 88S. The Social Security System created under Republic Act No. 1161, as amended.

m.Member. Any person coverable under R.A. 9679, whether on a mandatory or voluntary basis, and pays the
mandated contributions .

n. Member-Borrower. A member who has an outstanding account under any of the Fund's loan programs.

o.Member-Saver. Amember who has no outstanding account under any of the Fund's loan programs .

p. Membership Term. A period of twenty (20) years commencing from the first day of the month to which the
member's initial contribution to the Fund applies: Provided, that the member shall have contributed a total
of two hundred forty (240) monthly contributions at the time of maturity.

o g. Monthly. The period from the end of the last payroll period of the preceding month to the end of the last
payroll period of the current month if compensation is on hourly, daily or weekly basis; if on any other basis,
“monthly” shall mean a period of one calendar month.

r. Net Fund Asset. The total assets of the Fund less current liabilities.

s. Net Income. The balance of realized or accrued earnings for a given period after deducting all costs and
expenses, interests, taxes, losses and charges of every character, including depreciation and depletion for
the period.

t. Permanent Total Disability. The loss or impairment of a physical and mental function resulting from injury or
sickness which completely incapacitates a member to perform any work or engage in any business or
occupation as determined by the Fund.

u. Total Accumulated Value (TAV). The sum of the member's contributions and the employer’s required
contributions, when appropriate, and the corresponding dividends credited thereto .

RULE IV ORGANIZATION, ADMINISTRATION, POWERS AND FUNCTIONS OF THE HOME DEVELOPMENT MUTUAL
FUND

Section 1. Home Development Mutual Fund, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan: lkaw,
Bangko, Industriya at Gobyerno) Fund. The Home Development Mutual Fund or the Pag-1BIG Fund created under
R.A. 9679 is a government financial institution involved in mobilizing provident funds primarily for shelter finance.
It is a nationwide tax-exempt mutual provident savings system for private and government employees and other
earning groups, supported by matching mandatory contributions of their respective employers in the spirit of
social justice and the pursuit of national development, with housing as the primary investment.

Section. 2. Provident Character. The Fund shall be private in character, owned wholly by the members,
administered in trust and applied exclusively for their benefit. All the personal and employer contributions shall be
fully credited to each member, accounted for individually and transferable in case of change of employment. They
shall earn dividends as provided for in these Rules. The said amounts shall constitute the provident fund of each
member, to be paid to him or her, his or her estate or beneficiaries upon termination of membership, or from
which peripheral benefits for the member may be drawn.

Section 3. Powers and Functions of the Fund. In addition to the usual corporate powers under existing laws, the
Fund shall have the following specific powers and functions:

a. To formulate, adopt, amend and/or rescind such rules and regulations as may be necessary to carry out the
provisions and purposes of R.A. 9679, as well as the effective exercise of the powers and functions, and the
discharge of duties and responsibilities of the Fund, its officers and employees;

b.To adopt or approve the annual and supplemental budget of receipts and expenditures including salaries and
allowances of the Fund’'s personnel; to authorize such capital and operating expenditures and disbursements of
the Fund as may be necessary and proper for the effective management and

operation of the Fund;

c. To submit annually to the President of the Philippines not later than March 15, a report of its activities and
the state of the Fund during the preceding year, including information and recommendations for the
development and improvement thereof;

d. Toinvest not less than seventy percent (70%) of its investible funds to housing, in accordance with R.A. 9679;

e. To acquire, utilize, or dispose of, in any manner recognized by law, real or personal properties to carry out
the purposes of R.A. 9679;

f. To set up its own accounting and computer systems; to conduct continuing actuarial and statistical studies
and valuations to determine the financial viability of the Fund and its projects; to require reports,
compilations and analysis of statistical and economic data, as well as make such other studies and surveys as
may be needed for the proper administration and development of the Fund;

g. To have the power of succession; to sue and be sued; and to adopt and use a corporate seal;

h. To enter into and carry out contracts of every kind and description with any person, firm or association or
corporation, domestic or foreign;

. Toborrow funds from any source, private or government, foreign or domestic;

j. To invest, own or otherwise participate in equity in any establishment, firm or entity; to form, organize,
invest in or establish and maintain a subsidiary or subsidiaries in relation to any of its purposes;

k.To maintain a provident fund, which shall consists of contributions made by both the Fund and its officers and
employees and their earnings, for the payment of benefits to such officials and employees or their heirs under
such terms and conditions as it may prescribe;

I. To design and adopt an Early Retirement Incentive Plan (ERIP) for its own personnel;

m.To establish field offices and to conduct its business and exercise its powers in these places;

n.To approve restructuring proposal for the payment of due but unremitted contributions and unpaid loan
amortizations under such terms and conditions as the Board of Trustees may prescribe;

o.To determine, fix and impose interest and penalties upon unpaid contributions due from employers and
employees;

p. To ensure the collection and recovery of all indebtedness, liabilities and/or accountabilities, including unpaid
contributions in favor of the Fund arising from any cause or source or whatsoever, due from all obligors,
whether public or private; to demand payment of the obligations referred to herein, and in the event of
 failure or refusal of the obligor or debtor to comply with the demand, to initiate or institute the necessary or
proper actions or suits, criminal, civil, administrative, or otherwise, before the courts, tribunals,
commissions, boards or bodies of proper jurisdiction: Provided, however, that the Fund may compromise or
release, in whole orin part, any interest, penalty or civil liability to the Fund in connection with the collection
of contributions and the lending operations of the Fund, under such terms and conditions as prescribed by
the Board of Trustees. Provided, further, that the Board may, upon recommendation of the Chief Executive
Officer, deputize any member of the Fund's legal staff to act as special sheriff in foreclosure cases, in the sale
or attachment of the debtor’s properties, and in the enforcement of court writs and processes in cases
involving the Fund. The special sheriff of the Fund shall make a report to the proper court after any action
taken by him, which shall treat such action as if it were an act of its own sheriffs in all respects;

q. To design and implement other programs that shall further promote and mobilize savings and provide
additional resources for the mutual benefit of the members with appropriate returns on the
savings/investments. The program shall be so designed as to spur socio-economic take-off and maintain
continued growth;

r. To conduct continuing actuarial and statistical studies and valuations to determine the financial condition of
the Fund and taking into consideration such studies and valuations and the limitations herein provided,
readjust the benefits, contributions, interest rates of the allocation or reallocation of the funds to the
contingencies covered; and

s. To exercise such powers and perform such acts as may be necessary, useful, incidental or auxiliary to carry
out the provisions of R.A. 9679.

Section 4. Board of Trustees. The corporate powers and functions of the Fund shall be vested in and exercised by
the Board that shall be composed of the following :

a.The Chairperson of the Housing and Urban Development Coordinating Council, as the ex officio Chairman ;

b. The Secretary of the Department of Finance, as the ex officio Vice Chairman.

c. The Secretary of the Department of Labor and Employment, or his/her duly designated undersecretary, as ex
officio member;

d. The Secretary of the Department of Budget and Management, or his/her duly designated undersecretary, as
ex officio member;

e. The Secretary of the Department of Trade and Industry, or his/her duly designated undersecretary, as ex
officio member;

f. The Chief Executive Officer of the Fund; and

g.Five (5) appointive members, two (2) representatives of private employees, two (2) representatives of private
employers and one (1) representative of government employees.

The four (4) private sector representatives shall each be appointed by the President of the Philippines for a term of
two (2) years. Provided, however, that of the first to be appointed, one (1) representative of the employers shall
have a term of only one (1) year.

The representative of the government employees shall be appointed by the President of the Philippines for a term
of two (2) years.

The Chairman, Vice Chairman and members of the Board shall be entitled to a reasonable per diem for each
meeting actually attended and other allowances at such amounts as may be fixed by the Board, in accordance with
existing laws, rules and regulations.
Section 5. Powers of the Board. The Board shall have the following powers :

a.To formulate policies, rules and regulations to carry out effectively the functions of the Fund under R.A. 9679;

b. To promulgate such rules and regulations as may be necessary or proper for the effective exercise of the
powers and functions, as

well as the discharge of the duties and responsibilities of the Fund, its officers and employees;

c. To authorize expenditures of the Fund in the interest of effective administration and operations; to adopt
from time to time the budgets for said purposes;

d. To approve the annual and supplemental budget of receipts and expenditures including salaries and
allowances of the Fund personnel; to authorize such capital and operating expenditures and disbursements
as may be necessary and proper for the effective management and operation of the Fund;

e.To condone, in whole or in part, penalties imposed on loans of members and borrowers who, for justifiable
reasons prescribed by the Board, failed to pay on time any obligation due to the Fund; Provided, that such
exclusive power to condone shall likewise apply to penalties imposed on employers, who justifiably fail to remit
when due the required contributions of their employees;

f. To approve the Fund's organizational and administrative structures and staffing pattern, and to establish, fix,
review, revise and adjust the appropriate compensation package for the officers and employees of the Fund
in accordance with Section 8 , Rule IV hereof;

g.To approve or confirm appointments of officers and other personnel of the Fund, as the case may be; and

h. To exercise such powers as may be necessary to carry into effect the powers and accomplish the purposes
for which the Fund is established.

Section 6. Rule-Making Power. The Board shall make and change needful rules and regulations, which shall be
published in accordance with law or at least once in a newspaper of general circulation in the Philippines, to
provide for, but not limited to, the following matters:

a.The effective administration, custody, development, utilization and disposition of the Fund or parts thereof,
including payment of amounts credited to members or to their beneficiaries or estates; b.Grounds for and effects
of termination of membership other than by completion of term ;

c.Fund earnings and their distribution, investment and/or plowing back for the exclusive benefit of the members;

d.Interim disbursements of accumulated values to members of ameliorative and similar purposes;

e.Benefits, contributions including their rates, premium rates, and interestrates ;

f. Housing and other loan assistance programs to members;

g.Adjudication and settlement of claims and disputes and the procedures for the same on any matters involving
the interests of members in the Fund;

h.Optimize the effectiveness of the Fund’s coverage;

. Extension of Fund coverage to other earning groups, with or without employer contributions, and waiver or
suspension of coverage or its enforcement by reasons of nature of employment, condition of business, ability to
make contributions and other reasonable considerations; and
J.Other matters that, by express or implied provisions of R.A. 9679, shall require implementation by appropriate
policies, rules and regulations.

Section 7. Chief Executive Officer. The Chief Executive Officer of

o the Fund shall be appointed by the President of the Philippines and shall execute and administer the policies and
resolutions approved by the Board of Trustees, prepare its agenda, and direct and supervise the operations and
management of the Fund. The Chief Executive Officer, subject to the approval of the Board in case of approval of
appointments to managerial positions and above, and the confirmation of the Board in appointments to below
that of manager level, shall appoint the personnel of the Fund, remove, suspend or otherwise discipline them for
cause, and prescribe their duties and qualifications, in accordance with existing civil service laws, rules and
regulations, to the end that only competent personnel may be employed.

Section 8. Organizational and administrative structures and staffing pattern. The organizational and administrative
structures and staffing pattern of the Fund shall be as determined by the Board. All positions in the Fund shall be
governed by a compensation and position classification system and qualification standards approved by the Board
based on a comprehensive job analysis, wage compensation study and audit of actual duties and responsibilities;
Provided, that the compensation plan shall be comparable with prevailing compensation plans in the private sector
and shall be subject to the periodic review of the Board no more than once every four (4) years without prejudice
to yearly merit reviews or increases based on productivity and profitability. The Fund shall, therefore, be exempt
from any laws, rules and regulations on salaries and compensations.

Section 9. Administration Costs. The Fund shall bear the costs of its administration and development, in such
amounts and/or limits as the Board of Trustees may deem appropriate, but not exceeding two (2%) percent of the
Net Fund Assets of the previous year, excluding operating cost directly relating to the lending operations of the
Fund.

Section 10. Audit. The Chairman of the Commission on Audit shall act as the ex-officio auditor of the Fund and,
accordingly, is empowered to appoint a representative and other subordinate personnel to perform and report on
such audit duties, responsible to and removable only by the Commission on Audit Chairman, without prejudice,
however, to the power of the Board of Trustees to contract for another mode of independent audit service, in
addition to that provided by the Commission on Audit as provided for under Presidential Decree No. 1445,
otherwise known as the Government Auditing Code of the Philippines.

Section 11. Exemption from Tax, Legal Process and Lien. All laws to the contrary notwithstanding, the Fund and all
its assets and properties, all contributions collected and all accruals thereto and income or investment earnings
therefrom, as well as all supplies, equipment, papers or documents shall be exempt from any tax, assessment, fee,
charge, or customs or import duty; and all benefit payments made by the Pag-IBIG Fund shall likewise be exempt
from all kinds of taxes, fees or charges, and shall not be liable to attachments, garnishments, levy or seizure by or
under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled
thereto, except to pay any debt of the member to the Fund. No tax measure of whatever nature enacted shall
apply to the Fund, unless it expressly revokes the declared policy of the State in Section 2 of R.A. 9679 granting tax
exemption to

the Fund. Any tax assessment against the Fund shall be null and void.

Section 12. Money Investments. All moneys of the Fund not needed to meet current administrative and
operational requirements, shall be invested with due and prudent regard for its safety, growth and liquidity needs.
Provided, that at least seventy percent (70%) of the Fund's investible funds shall be invested in housing, in
accordance with R.A. 9679.

Section 13. Visitorial and Enforcement Powers.

a. The Fund or its duly authorized representative is empowered to inspect the premises, books of accounts and
records of any person or entity covered by R.A. 9679; require to submit its reports regularly, and act on
violations of any provision of R.A. 9679.

b.Particular aspects of the Fund's administration may be subject to supervision, visitation or verification by
appropriate agencies of the government as may be designated and authorized by the President of the Philippines.

RULEV FUND COVERAGE AND MEMBERSHIP

Section 1.Mandatory Coverage and Membership of Employees. Coverage under and membership in the Fund shall
be mandatory for the following:

a.All employees who are compulsorily covered by the SSS;

Provided, that for purposes of mandatory coverage in the Fund of

persons who are compulsorily covered by the SSS, the term

employee shall be understood the manner by which the SSS defines it, and shall include, but not limited to :

1.A Private employee, whether permanent, temporary or provisional, who is not over 60 years old.

2.A household-helper earning at least P1,000 a month. A household-helper is any person who renders domestic
services exclusively to a household such as driver, gardener, cook, governess, and other similar occupations.

3.A Filipino seafarer upon the signing of the standard contract of employment between the seafarer and the
manning agency which, together with the foreign ship owner, act as employers.

4.A self-employed person, regardless of trade, business or occupation, with an income of at least P1,000 a month
and not over 60 years old. This includes, but not limited to: self- employed professionals; business partners, single
proprietors and board directors; actors, actresses, directors, scriptwriters and news reporters who are not under
an employer-employee relationship; professional athletes, coaches, trainers and jockeys; farmers and fisherfolks;
and workers in the informal sector such as cigarette vendors, watch-your-car boys, among others. Provided, that a
self-employed person subject to compulsory coverage by the SSS shall be treated by the Fund as both employee
and employer at the same time, and shall therefore be required to pay both the employee and the corresponding
employer contributions.

Provided finally, that actual membership in the SSS shall notbe a condition precedent for mandatory coverage in
the Fund, it being

O sufficient that the person ought to be covered compulsorily by the SSS.

b. All employees who are subject to mandatory coverage by the GSIS, regardless of their employment status.

c. Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, the Bureau of Jail
Management and Penology, and the Philippine National Police.

d.Filipinos employed by foreign-based employers. Coverage under the Fund shall be mandatory for Filipinos
employed by foreign- based employers whether deployed here or abroad, or a combination thereof, but whose
respective employers are exclusively based outside of the Philippines. The employers shall not be subject to
mandatory coverage. Provided, that if the employer maintains an office or agent in the Philippines that effectively
acts as an employer of the Filipino, then such office or agent shall be deemed an employer subject of mandatory
coverage under R.A. 9679.

Section 2. Mandatory Coverage of Employers. Coverage under the Fund shall be mandatory for the following :
a.Employers of employees compulsorily covered by the SSS. These shall include private employers previously
granted waiver or suspension of coverage for whatever reason under Presidential Decree 1752, as amended.
Provided, that manning agencies together with the foreign ship owners shall be considered jointly and severally as
the employers of Filipino Seafarers. Provided finally, that a self-employed person subject to compulsory coverage
by the SSS shall be treated by the Fund as both employee and employer atthe same time .

b.Employers of employees subject of mandatory coverage by the GSIS.

c.The Armed Forces of the Philippines, the Bureau of Fire Protection, the Bureau of Jail Management and
Penology, and the Philippine National Police.

Section 3. Voluntary Coverage. Persons who are at least eighteen (18) years old but not more than sixty five (65)
years old and are not subject to mandatory coverage may be covered by the Fund on a voluntary basis, subject to
such terms and conditions stated in these Rules or as the Board may impose, and shall include, but not limited to,
the following :

a.Spouses who devote full time to managing the household and family affairs, unless they also engage in another
vocation or employment which is subjectto mandatory coverage.

b.Filipino employees of foreign government or international organization, or their wholly-owned instrumentality

based in the Philippines, in the absence of an administrative agreement with the Fund.

c.Employees of an employer who is granted a waiver or suspension of coverage by the Fund under R.A. 9679 .

d. Leaders and members of religious groups;

e. A member separated from employment, local or abroad, or

ceased to be self-employed, but would like to continue paying his

or her personal contribution. Such member may be a pensioner,

investor, or any other individual with passive income or

allowances.

Public officials or employees who are not covered by the GSIS,

such as Barangay Officials, including Barangay Chairmen,

Barangay Council Members, Chairmen of Sangguniang Kabataan, and Barangay Secretaries and Treasurers .

g.Such other earning groups as may be determined by the Board by rules and regulations.

Provided, that any foreign government, international organization or their wholly-owned instrumentality
employing workers in the Philippines or employing Filipinos outside of the Philippines, may enter into an
agreement with the Fund for the inclusion of their employees as members of the Fund; Provided, further, that the
terms of such agreement shall conform with the provisions of R.A. 9679 and these Rules on coverage and amount
of payment of contributions and benefits; Provided, finally, that the provisions of the said Act shall be
supplementary to any such agreement.

Section 4. Effective Date of Mandatory and Voluntary Membership and Coverage. Mandatory coverage of the
employer shall take effect on the first day of his business operation, and that of the employee on the date of his or
her employment: Provided, that for:
a. Employees and employers who are not subject of mandatory coverage prior to R.A. 9679 and these Rules,
including the uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, the
Bureau of Jail Management and Penology, and the Philippine National Police, and their respective employers,
as well as Filipinos employed by foreign based employers, mandatory coverage shall take effect on January 1,
2010, unless a different date is set by the Board by resolution;

b.Employers whose coverage had been previously suspended or waived for whatever reason under PD 1752, their
coverage as well as that of their employees shall take effect after the expiration of their respective suspension or
waiver of coverage;

c.Voluntary members, coverage shall commence on the actual date of registration.

Provided, finally, that actual membership in the Fund shall commence only upon remittance of the initial
contribution and not at point of registration.

Section 5. Registration of Employers. All new employers shall first register with the Fund prior to the start of their
business operations. Provided, that all employers who are not subject of mandatory coverage prior to R.A. 9679
and these Rules, shall register for coverage before January 1, 2010, unless a different date is set by the Board by
resolution .

Section 6. Registration of Employees. It shall be the duty of all employers to register all their employees subject of
mandatory coverage, by submitting to the Fund all data and information that it may require in relation to the
employers’ respective businesses and employees, within thirty (30) days from the start of their business
operations. For newly hired employees, the employer shall register them with the Fund within thirty (30) days
from the start of their employment.

Section 7. Registration of the Self-employed. The self-employed who are subject to compulsory coverage shall
register with the Fund within thirty (30) days from the date he or she started to be self- employed. Provided, that if
the self-employed shall be required to

D obtain the necessary permits and/or licenses, other than the license required for practicing a particular
profession, prior to the practice of his or her self-employment, he or she shall register with the Fund prior to
engaging in such.

Section 8. Membership Term. Membership in the Fund shall be for a period of twenty (20) years commencing from
the first day of the month to which the member's initial contribution to the Fund applies; Provided, that the
member shall have contributed a total of two hundred forty (240) monthly contributions at the time of maturity .

Section 9. Termination of Membership. Membership in the Fund shall be terminated anytime upon the occurrence
of any of the following, provided that the member’s financial obligations with the Fund are first fully settled:

a. Membership Term Maturity;

b. Death;

c. Retirement;

d. Permanent Total Disability or Insanity;

e. Permanent departure from the country;

f. Termination from the service by reason of health;

g.Other causes as may be provided for by the Board of Trustees

Occurrences other than the above, such as resignation, lay-off or suspension from employment, shall not
constitute a ground for termination of membership. Such occurrences shall only result to suspension of
contributions.

Provided finally, that in the event the member after membership termination continues or subsequently places
him or herself in a situation which would subject him or herself to mandatory coverage, then the member shall
continue to be mandatorily covered by the Fund and his or her employer is mandated to continue deducting and
remitting the employee's required contribution together with the corresponding employer’s contribution pursuant
to these Rules.

Section 10. Retirement. Any member shall be compulsorily retired under the Fund upon reaching age sixty-five
(65). The member may however, opt to retire earlier under the Fund upon the occurrence of any of the following
events, provided the member is not a member- borrower:

a. Actual retirement from the SSS or GSIS, or from government service by provision of law;

b.Retirement under a separate employer provident or retirement plan. Provided, thatthe member is at least forty-
five (45) years of age at the time of retirement;

c. Upon reaching age sixty (60).

Provided finally, that in the event the member opts to retire earlier from the Fund for reasons stated under items b
and c above, and thereafter continues or subsequently places him or herself in a situation which would subject him
or herself to mandatory coverage, then the member shall continue to be mandatorily covered by the Fund and his
or her employer is mandated to continue deducting and remitting the employee’s required contribution together
with the corresponding employer’s contribution pursuant to these Rules.

Section 11. Permanent Total Disability. The following disabilities shall be deemed total and permanent:

Qo

a. Temporary total disability lasting continuously for more than one

hundred twenty (120) days;

b. Complete loss of sight of both eyes;

c. Loss of two limbs at or over the ankle or wrist;

d. Permanent complete paralysis of two limbs;

e. Braininjury resulting in incurable imbecility or insanity; and

f. Such other cases which are adjudged to be total and permanent disability by a duly licensed physician and
approved by the Board.

Section 12. Existing Membership and Coverage. Membership and coverage under the Fund established under
Presidential Decree No. 1752, as amended, together with the amounts and benefits already accrued to the
members, including employer’s counterpart contributions, as well as covering records and documents, shall be
transferred, continued, and integrated into the new Fund established under R.A. No. 9679, and shall be subject
henceforth to policies and rules that the Board shall adopt under the said law. All rights vested, duty imposed,
penalty accrued, or proceeding commenced under Presidential Decree No. 1752, as amended, particularly those
under Republic Act No. 7742, shall continue to subsist and shall be enforced under the provisions of R.A. 9679 and
these Rules.

RULE VI CONTRIBUTIONS
Section 1. Rate of Contributions. Covered employees and employers shall contribute to the Fund based on the
monthly compensation of covered employees as follows:

a.Employees earning not more than One thousand five hundred pesos (P1,500.00) per month—one percent (1%).

b. Employees earning more than One thousand five hundred pesos (P1,500.00) per month—two percent (2%).

c. All employers — two percent (2%) of the monthly compensation of all covered employees.

The maximum monthly compensation to be used in computing employee and employer contributions shall not be
more than Five thousand pesos (P5,000.00); Provided, that this maximum and the contribution rates may be fixed
from time to time by the Board through rules and regulations adopted by it, taking into consideration actuarial
calculations and rates of benefits. Provided further, that the foregoing rates shall likewise be the same for the self-
employed and voluntary members.

A member may, however, be allowed to contribute more than what is required herein should he or she so desires.
The employer, however, shall only be mandated to contribute what is required under these Rules unless the
employer agrees to match the member’'s increased contribution.

Notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly, from the
compensation of its employees covered by the Fund, or otherwise recover from them, the employer’s contribution
with respect to such employees.

Section 2. Full-time Spouse. Full-time spouses who volunteer to be covered by the Fund as provided for under
these Rules, shall

& adopt as a basis of monthly contributions one-half (’2) of the monthly compensation income of the employed
spouse. The full-time spouse shall not be required to pay the employer’s contribution .

Section 3. Contributions of Member with Multiple Employers. In cases where a member has two or more
employers, such member shall contribute monthly to the Fund a percentage of his or her monthly compensation
per employer, which shall be matched by the latterin accordance with Section 1 of this Rule.

RULE VII COLLECTION AND REMITTANCE

Section 1. Employer’s Fiduciary Obligation. The employer assumes a fiduciary relationship with both the Fund and
the member concerned as regards the latter's contribution and the required employer contribution, as well as the
remittance thereof to the Fund.

The employer likewise assumes the same fiduciary relationship with both the Fund and the member concerned as
regards the collection and remittance of the latter’s loan amortizations or payments to the Fund when the same is
made through salary deductions as provided in the succeeding sections of this Rule .

Section 2 . Method of Collection and Payment. Monthly contributions of members to the Fund shall be collected
through payroll deductions by their respective employers, who for this purpose shall act as agent both of the Fund
and the member.

If a member avails of any loan from the Fund and the member consents in writing to amortize or pay the same
through salary deductions, the employer shall be duty-bound to faithfully implement the same and shall continue
to do so until the loan is fully paid. Until the loan is fully paid, the employer shall not discontinue the salary
deductions without the prior written consent of the Fund. For this purpose, the employer shall likewise act as
agent both of the Fund and the employee.

If a member-borrower who has previously consented to amortize or pay his loans through salary deductions
resigns or otherwise separates from the service of the employer, the employer shall be bound to inform the Fund
of such resignation or separation immediately upon notice thereof, but not later than thirty (30) days from the
effectivity of said resignation or separation.

Every employer shall issue corresponding receipts for all contributions or loan amortizations or payments
deducted from the employee’s compensation or shall indicate such deductions on the employee’s pay slip.

Section 3. Remittance of Collections.

a. All employers shall remit to the Fund their contributions and the contributions of their covered employees as
well as the latter’s loan amortizations or payments to the Fund, as provided for under Section 2 of this Rule,
when applicable, within fifteen (15) days from the date the same were collected unless another period is
previously agreed upon between the employer and the Fund, or within such periods as the Fund may
prescribe otherwise.

(13

C.

The Fund may prescribe a different remittance schedule for Filipinos employed by foreign based employers
depending on the nature of their contracts or manner of their deployment abroad. Every employer required to set
aside and remit such contributions as prescribed under R.A. No. 9679 and these Rules shall be liable for their
payment, and non-payment thereof shall further subject the employer to a penalty of three percent (3%) per
month of the amounts payable from the date the contributions fall due until paid. Every employer who actually
deducts from the salary of his employee the latter’s loan amortization or payments to the Fund, as provided for
under these Rules, shall be liable for their payment, and non-payment thereof shall likewise further subject the
employer to a penalty of three percent (3%) per month of the amounts payable from the date the loan
amortizations or payments fall due until paid. It shall be mandatory and compulsory for all government
instrumentalities, agencies, including government-owned and controlled corporations, to provide the payment of
contributions in their annual appropriations. Penal sanctions shall be imposed upon these employers who fail to
include the payment of contributions on time, or delay the remittance of the required contributions to the Fund.
The heads of offices and agencies shall be administratively liable for non-remittance of the required contributions
to the Fund. Failure or refusal of the employer to pay or to remit the contributions herein prescribed shall not
prejudice the right of the covered employee to the benefits under this Act. No retroactive payment of
contributions shall be allowed, except for unremitted collections that are paid by the employer which shall be
applied retroactively upon presentation of proof that said contributions were previously collected or deducted
from the employee. Without prejudice to the employer’s civil, criminal and administrative liabilities, the employer
shall likewise be liable for all the applicable interests and penalties arising from the late remittance of
contributions and loan amortizations or payments actually collected from the member, as well as the dividends
which the contributions should have earned have it been remitted on time. Such interests and penalties, excluding
the penalty prescribed under Section 3b of Rule VII, shall be applied for the account of the member concerned and
the dividends added to said member's TAV. Provided, that if the employer did not collect from his employee during
the period of his delinquency, but pays the mandatory employer counterpart for that period, the same shall not be
given retroactive effect but shall be treated as a single contribution for the month in which the payment is made in
favor of the concerned member. In the same manner, when an employee opts to pay the sum of his or her
personal contributions during the period of his or her employer’s delinquency, such payment shall be treated as a
single contribution . The contributions under R.A. 9679 and these Rules, in cases where an employer refuses or
neglects to pay the same, shall be collected by the Fund in the same manner as taxes are made collectible under
the National Internal Revenue Code, as amended.

The right to institute the necessary action against the employer may be commenced within twenty (20) years from
the time delinquency is known or the assessment is made by the Fund, or from the time the benefit accrues, as the
case may be.
e Section 4. Remittance of Contributions by Self-employed and Voluntary Members. Self-employed and voluntary
members may remit their monthly contributions on a monthly or quarterly basis, provided thatin the latter case
payments shall be remitted before the 10th day of the beginning month of the succeeding quarter. Monthly
remittances shall be made directly to the Fund before the 10th day of the following calendar month .

Section 5. Effect of Leave Without Pay or Suspension from Employment. Inthe event a member-saver goes on leave
without pay oris subjected to disciplinary action where he is suspended from work, the member-saver's monthly
contribution together with the corresponding employer's monthly contributions shall be suspended for the
duration of the leave without pay or suspension from work. Provided, that such member-saver may opt to
continue paying and remitting to the Fund directly his or her monthly contributions together with the employer
counterpart to be shouldered by him or her. A member-borrower, on the other hand, shall continue to pay and
remit directly to the Fund his or her monthly contributions and loan amortizations or payments. The duty of the
employer to deduct monthly amortizations or payments for the member-borrower’s outstanding loan with the
Fund as provided for under Section 2 of this Rule shall be suspended for the duration of the leave without pay or
suspension from work. Provided, that it shall be the duty of the employer to inform the Fund of the member’s
leave without pay or suspension from work within thirty (30) days from the first day of such leave or suspension.

Section 6. Effect of Resignation or Separation from Employment. In the event a member-saver resigns or is
otherwise separated from employment, the member-saver's monthly contribution together with the
corresponding employer's monthly contributions to the Fund shall cease. Provided, that such member- saver may
opt to continue paying and remitting to the Fund directly his or her monthly contributions together with the
employer counterpart to be shouldered by him or her. Amember-borrower, on the other hand, shall continue to
pay and remit directly to the Fund his or her monthly contributions and loan amortizations or payments. The duty
of the employer to deduct monthly amortizations or payments for the member-borrower's outstanding loan with
the Fund as provided for under Section 2 of this Rule shall likewise cease. Provided, that it shall be the duty of the
employer to inform the Fund of such resignation or separation immediately upon notice thereof, but not later than
thirty (30) days from the effectivity of said resignation or separation.

RULE VIl WAIVER OR SUSPENSION OF FUND COVERAGE

Section 1. Waiver or Suspension of Coverage.The Board may, by rules or resolution, waive or suspend an
employer’s mandatory coverage under the Fund by reason of nature of employment, condition of business, ability
to make contributions and other reasonable considerations.

Section 2. Existing Waiver or Suspension. All existing waivers or suspension granted previously for whatever reason
under P.D. 1752, as amended, shall continue to be in full force and effect until its expiration as stated in said
waiver or suspension .

RULE IX BENEFITS

Section 1. Mandatory Contributory Support of the Employer. In the spirit of social justice and the pursuit of
national development, the member's contribution to the Fund shall be with the mandatory contributory support of
the employer as provided for under these Rules or as may be provided for by the Board. Notwithstanding any
contract to the contrary, an employer shall not deduct, directly or indirectly, from the compensation of its
employees covered by the Fund, or otherwise recover from them, the employer's contribution with respect to
such employees.

Section 2. Acts of the Employer shall not prejudice the member. Failure or refusal of the employer to pay or to
remit the contributions herein prescribed, or as may be provided for by the Board, shall not prejudice the right of
the covered employee to the benefits under R.A.9679 and these Rules.

Section 3. Exemption from Tax, Legal Process and Lien. All laws to the contrary notwithstanding, all contributions
collected and all accruals thereto and income or investment earnings therefrom, shall be exempt from any tax,
assessment, fee, charge, or customs or import duty; and all benefit payments made by the Fund shall likewise be
exempt from all kinds of taxes, fees or charges, and shall not be liable to attachments, garnishments, levy or
seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or
persons entitled thereto, except to pay any debt of the member to the Fund.

Section 4. Dividends. The Board shall set aside annually an amount which in no case shall be less than seventy
percent (70%) of the annual netincome of the Fund, to be paid in the form of dividends to members. The
member’s contributions, inclusive of employee's and employer’s contributions, shall earn dividends which shall be
distributed annually and credited to his or her TAV. Only members with outstanding TAV as of year-end shall be
entitled to dividends declared for that particular year. All dividend earnings shall be tax- free.

Section 5. Return of Contributions. A member shall be entitled to receive his Total Accumulated Value upon
termination of membership in accordance with Section 9 of Rule V of these Rules, less any and all pending
obligations with the Fund. In the event of death, the member's heirs shall likewise receive the same less any and all
pending obligations with the Fund.

Section 6. Housing Features. Amember of good standing shall be eligible to apply for housing loans, under such
terms and conditions as may be authorized by the Board, taking into account ability to pay. The Board of Trustees
shall institute policies to ensure that lower- income members obtain such housing loans.

Section 7. Benefit Programs. A member may avail of the Fund's various short term loans and other benefit
programs, provided that he or she satisfies the eligibility requirements set by the Board.

Section 8. Portability of Membership. A member who transfers to another employer or who becomes self-
employed carries with him

D his Total Accumulated Value.

Section 9.0ptional Withdrawal of Contributions. Those who become members of the Fund after the effectivity of
R.A. 9679 shall have the option to withdraw his or her Total Accumulated Value on the fifteenth (15th) year of
continuous membership. Provided, that said member has no outstanding housing loan with the Fund at the time of
withdrawal.

The exercise of this option by the member shall not be considered as a ground to terminate his membership with
the Fund. The member shall continue to be mandatorily covered by the Fund and his or her employer is mandated
to continue deducting and remitting the employee’s required contribution together with the corresponding
employer's contribution pursuant to these Rules .

Section 10. Death Benefits. Upon the death of a member, his or her beneficiaries shall be entitled to death benefits
in an amount to be determined by the Board in addition to the Total Accumulated Value as mentioned provided
for under in Section 5 hereof.

Section 11. Government Guarantee. The benefits prescribed under R.A. 9679 shall not be diminished and to
guarantee said benefits the Government of the Republic of the Philippines accepts general responsibility for the
solvency of the Fund .

Section 12. Pag-IBIG Contributions are Excluded from the Computation of the Gross Income. Pursuant to Section
32 (B) (7) (f) of the National Internal Revenue Code of 1997, as amended, Pag- IBIG Contributions are excluded
from the computation of the gross income and shall be exempt from taxation.

RULE X ADJUDICATION OF CLAIMS AND DISPUTES

Section 1. Facility of Payment of Claims and Benefits. The Fund shall promptly pay the benefits provided for in Rule
IX hereof to the member or to such persons as may be entitled thereto in accordance with the provisions of said
Rule provided that the necessary supporting documents are submitted together with the application for provident
claims. In relation thereto, the Chief Executive Officer shall issue the necessary rules and procedures to facilitate
the processing and payment of the said benefits and claims.

Section 2. Adjudication and Settlement of Claims and Disputes. The Fund shall have original and exclusive
jurisdiction over all claims and disputes on any matter relative to the implementation of the provisions of R.A.
9679 and these Rules affecting the rights and interest of the members. The decision of the Chief Executive Officer
of the Fund shall be final and executory, unless appealed to the Board, after the lapse of thirty (30) days from
receipt by the aggrieved party of such decision. The decision of the Board shall, unless appealed to a competent
court, become final and executory afterfifteen (15) days from receipt of such decision.

The Chief Executive Officer shall prescribe the forms to be used and

the procedures to be followed in the adjudication and settlement of the aforementioned claims and disputes.

Section 3. Proof of Death of a Member. The proof of death of a member shall be established by a duly certified
death certificate ora certified extract from the Death Register issued by the Civil Registrar or National Statistics
Office (NSO) or by such other officer authorized to issue such extracts. The Fund may likewise accept as additional
proof such other documents as it may, in its discretion, deemacceptable.

RULEXI MISCELLANEOUS PROVISIONS

Section 1. Unclaimed Savings/Dividends. Any amount standing to the credit of any member for a period of one
year after termination of membership shall be regarded as unclaimed savings and shall be reclassified as an
account payable to the former member by the Fund. If any such amount standing to the credit of such person
remains unclaimed for a period of more than ten (10) years, the same shall be reverted to the Fund's retained
earnings.

Section 2. Employment Records and Reports.

a. Each employer shall immediately report to the Fund the names, ages, civil status, occupations, salaries, and
dependents of its covered employees within such periods as provided under these Rules or as may be
prescribed by the Fund.

b. Every employer shall keep true and accurate work records for such period and containing such information
as the Fund may prescribe, in addition to the annual register of new and separated employees which shall be
secured from the Fund, when the employee shall enter on the first day of employment or on the effective
date of separation, the names of the persons employed or separated from employment and such other data
that the Fund may require and said annual register shall be submitted to the Fund in the month of January of
each year. Such record shall be open for inspection by the Fund or its authorized representatives quarterly or
as often as the Fund may require.

RULE Xl GENERAL PROVISIONS

Section 1. Penalty Clause. Pursuant to Section 25 of R.A. 9679, refusal or failure without lawful cause or with
fraudulent intent to comply with the provisions of said law and these Rules, particularly with respect to
registration of employees, collection and remittance of employee-savings as well as the required employer
contributions, or the correct amount due, within the time set under these Rules or the policies and guidelines
adopted by the Board, or specific call or extension made by the Fund Management, shall constitute an offense
punishable by a fine of not less than, but not more than twice, the amount involved or imprisonment of not more
than six (6) years, or both such fine and imprisonment, in the discretion of the Court, apart from the civil liabilities
and/or obligations of the offender or delinquent.
When the offender is a corporation, the penalty shall be imposed upon the members of the governing board and
the President or General Manager, without prejudice to the prosecution of related offenses under the Revised
Penal Code and other laws, revocation

D and denial of operating rights and privileges in the Philippines, and deportation when the offender is a foreigner.

In case of government instrumentalities, agencies or corporations, the treasurer, finance officer, cashier,
disbursing officer, budget officer or other official or employee who fails to include in the annual budget the
amount corresponding to the employers' contributions, or who fails or refuses or delays by more than thirty (30)
days from the time such amount becomes due and demandable or to deduct the monthly contributions of the
employee shall, upon conviction by final judgment, suffer the penalties of imprisonment of not more that six (6)
years, and a fine of notless than, but not more than twice the amount involved.

Section 2. Separability Clause. If, for any reason, any provision of these Rules, or the application thereof to any
person or circumstances, is held invalid or unconstitutional, the remaining provisions not affected thereby shall
continue to be in full force and effect.

Section 3. Repealing Clause. All rules and regulations, policies, orders and issuances contrary to or inconsistent
with these Rules are hereby repealed or modified accordingly. All rights vested, duty imposed, penalty accrued, or
proceeding commenced under Presidential Decree No. 1752, as amended, particularly those under Republic Act
No. 7742, shall continue to subsist and shall be enforced under the provisions of R.A. 9679 and these Rules.

Section 4. Effectivity. These Rules shall take effect fifteen (15) days after the publication thereof in two (2)
newspapers of general circulation.

For more information please get in touch with the Pag-IBIG Fund call center at 724-4244(Pag-IBIG). You may also
visit the Pag-IBIG Fund branch office nearest you.
 BENEFITS

A. HOUSING LOAN

Having their own house is the ultimate dream of every Filipino family. But the truth is, most of those who plan to
purchase a house do not have a ready cash to pay for it, or even if they have, they would prefer to apply for a loan
to complete it.

Saving for your first home purchase may take for a couple of years, and by the time that you are ready for it, the
house that you wanted must have long been sold. Or the value of your money can no longer purchase the same
quality house you’d always wanted. You might want to consider applying for a housing loan to realize your dream.

When we hear of a housing loan, the Home Development Mutual Fund or commonly known as PAG IBIG housing
loan fund comes first to our mind. We definitely will not miss it because a small amount of our salary is deducted
to pay for our monthly contribution. Providing loan to finance our houses is one of the services provided by the
institution.

If you are shopping around for the best house to buy, you might want to shop around for housing loanprovided by
banks too because you might find a better deal. Many of us are a bit intimidated to inquire from banks, we may be
thinking of higher interest rate, stricter requirements, or lesser chance that the loan may be approved.

Some home purchasers prefer bank services when it comes to housing loan for a reason or two. And some would
prefer PAG IBIG housing loan. Let us compare what each offers on every factor we need to consider arriving at a
sound decision.

Qualifications
PAG IBIG BANKS
1. Must be a member, and must have 24 5. No membership needed, no contributions
monthly contributions to qualify. Members required, no need to have a savings account
can pay 24 months in a lump sum. 6. Must be Filipino citizen, or have a Visa
2. Not more than 65 years old requirement for foreigners
3. No existing multi-purpose loan in arrears 7. Must have a monthly family income of
4. No other PAG IBIG housing loan that had Php40,000.00
been foreclosed, cancelled or bought back 8. Must have a stable source of income, must
have stayed at least 2 years in the current
company or have 3 years of profitable
operation if running a business or practising
profession.

Loan Purposes
PAG IBIG BANKS
9. Can be used to purchase a lot not exceeding 13. Can be used to purchase a town house,
1,000 sq. Meters. condominium unit.
10. Can be used to purchase town house or 14. Can be used to finance housing construction.
condominium. 15. Can apply for re-financing.
11. Can be used to complete construction. 16. Also offer home equity service.
12. Refinancing.
How Much You Can Borrow

PAG IBIG BANKS

17. Maximum of Php 6,000,000.00 19. Some banks offer a minimum of PHP
18. Subject to other qualifiers like the actual 300,000.00 some offer minimum of PHP
need of the member, capacity to pay. 500,000.00.
Loan Appraisal Value Ratio
PAG IBIG BANKS
20. Loans not lower than Php 400,000, 100% 1. Some banks offer 80% – 90%, some banks offer as
21. Loans more than Php 400,000.00, 90% low as 70%.

Interest Rates (subject to change)

PAG IBIG
22. 6.99% for the first three years, subject to re-
pricing up to 11.375% (30 years).
BANKS
23. Some banks offer as low as 5.50% for the first
year, subject to re-pricing.
24. Some banks offer a fixed rate of 6 – 7.5% for
the first 5 years also subject to re-pricing.
25. Due to regular re-pricing, on 20th Year, banks
offers an average of 9- 12% interest rate.

Repayment Process
PAG IBIG BANKS
Maximum of 30 years 5 – 35 years

Requirements
PAG IBIG BANKS
26. Pag Ibig Housing Loan Application Form 38. Application form
27. Membership Status Verification Slip 39. Photocopy of government issued ID with
28. TCT/CCT in the name of the borrower photo & signature
29. Photocopy of the New Tax Declaration 40. Marriage contract if applicable
30. The Collection Servicing Agreement or Post 41. Alien Certificate of Registration for foreigners
dated checks 42. ITR for employees
31. Proof of billing address 43. Last 3 months of payslips or Certificate of
32. Notarized Loan and Mortgage Agreement employment for employees
33. Notarized Promissory Note 44. Business Registration Papers for businessmen
34. Disclosure Statement on Loan Transaction 45. Financial Statements for businessmen
35. Occupancy Permit (if applicable) 46. Bank Statements for businessmen
36. Building Plans (if applicable) 47. Trade References for businessmen
37. Deed of Absolute Sale (if applicable) 48. Lease Contracts or copy of Title for
businessmen
49. Photocopy of TCT/CCT
50. Building plan with vicinity map
51. Master of Deed of Declaration of Restrictions
for condominiums
52. Building plan for construction
53. Bill of materials and Labor Cost
54. Statement of Account for Refinancing
Miscellaneous Fees

PAG IBIG BANKS

55. Php 1,000 during loan application 57. Appraisal Fee of Php3,500 – Php 4,000.00
56. Php 2,000 before the release of loan 58. Handling Fee of Php 5,000.00
59. Notarial Fee of Php 500
60. Registration Fee
61. Doc Stamps Tax

Insurance Needed
PAG IBIG BANKS
The insurance premium will be included in monthly 62. MRI or Mortgage Redemption Insurance in
amortization the case of death before the full payment of
the loan
63. Fire Insurance

Processing Time
PAG IBIG BANKS
15 business days 5 – 7 business days

Pag-ibig Financing vs Bank Financing: Which One Best Suits You?

Not many Filipinos can purchase their dream house in an instant. But thanks to different housing loan options
(namely Pag-IBIG and bank financing), Filipino’s dream of being a homeowner is now possible. The question now
though is: which of the 2 housing loan options is better?

De facto, none is better than another. Why? It’s because each have their own advantage and disadvantage and it’s
a matter of which one you are qualified to and best fit your capacity to pay.

To guide you make a better decision, let’s look at its pros and cons.

But before we get into that, let’s look at their similarities, too. Both have the same purpose: to help borrowers
purchase their dream home through financing.

Both are long-term—ranging between 15-25 years—and require down payment. These 3 features are where their
parallels end. Now, let’s look at their differences.

Membership

Obviously, Pag-IBIG is exclusive to its members while anyone can avail of bank financing. However, it doesn’t mean
that if you’re a Pag-IBIG member, you will automatically be granted a loan.

Read: Step by Step Guide on how to Avail Pag-ibig Home Loan

They have a list of qualifications and if your record is not impressive, your loan application might be affected.

As for banks, they do not have exclusivity. This means that a borrower can apply for a loan from any bank. A
borrower is free to select which bank he thinks offer the best loan.

Income Requirements

For each one, the loan amount entitlement is relative to the borrower’s income. For Pag-IBIG, two important
factors affect loan entitlement and these are the amount of your contribution and the Net Disposable Income.

If you want a bigger loan amount, you need to increase contribution and show that your Net Income can at least
cover your preferred monthly amortization amount.

As for banks, they more strict with your credit standing and income stability before they grant you a loan.

Loan Amount

The minimum amount that Pag-IBIG grants is Php 100K while the maximum is P 3M. Moreover, members are now
allowed to take out multiple loans up to P 6M depending on the following conditions: actual need for the funds,
capacity to pay, and loan-to-appraisal value ratio.

The average minimum loan that banks grant is Php 800K, but sometimes, it also depends on the location. If the
housing project is outside Metro Manila, the amount is lesser.

Unlike Pag-IBIG, the maximum loanable amount depends on numerous factors including: capacity to pay,
appraised value of the property, proposed collateral, etc.

Additionally, banks don’t give an amount ceiling as long you’re not really a risky borrower based on their
assessment of your financial documents. You have to fill out a detailed Financial Information Sheet and they
always verify this.

Moreover, as an overall rule, your gross income should be at least 3x more than your monthly mortgage fee to
have a better chance of loan approval.

Loan Term

One of the reasons why Pag-IBIG is a popular choice among Filipinos is its longer loan term at 20-30 years. Banks,
on the other side, have shorter loan terms. Average period is 5-10 years, a 20 year term is very rare.

Interest Rates

To encourage more members to avail of the housing loans, the Pag-IBIG Fund have decreased their interest rates.
Their new rates are as follows:

Meanwhile, the interest rates of banks differ and is actually lower than Pag-IBIG Fund. For example, BDO and
Metrobank offer 5.5% for the first year.

Subsequently, their rates increase between 6.25-6.50% for a fixing period of 3 years. Yearly repricing rate for
existing borrowers start at 7% per annum.

Read: Comprehensive Guide to Bank Housing Loan in the Philippines

Have you figured out what’s best for you?

Now that we’ve compared the two, it is evident that it highly depends on your current financial situation and
timeline. We advise that as early as you’ve reached second year of working, you must start researching about
home financing.

Being a homeowner takes a lot of guts and is a major financial decision. It entails a lot of considerations, but once
you weigh the pros and cons of Pag-IBIG and bank financing, it’s only a matter of time before you pinpoint the
ideal set-up fit for you.

B. PROVIDENT PROGRAMS

1. BENEFITS CLAIM

PAG-IBIG Fund guarantees the refund of member’s TAV (Total Accumulated Savings), which consist of the
member’s accumulated contributions, the employer counterpart contributions, if any, and the dividend earnings
credited to the member’s account upon occurrence of any of the following grounds for withdrawal:
  Membership maturity. The member must have remitted at least 240 monthly contribution with the Fund.
For PAG-IBIG Overseas Program (POP) members, membership with the Fund shall be at the endof
5,10,15,20 years depending on the option of the member upon membership registration.
 Retirement. The member shall be compulsorily retired upon reaching age 65. He may however, opt to
retire upon the occurrence of any of the following:
 Actual retirement from the SSS, the GSIS or a separate employer provident/ retirement plan,
provided the member has at least reached age 45.
 Upon reaching age 60.
 Permanent and Total Disability or Insanity. The following disabilities shall be deemed total and
permanent:
 Temporary total disability lasting continuously for more than 120 days;
 Complete loss of sight of both eyes;
 Loss of two limbs at or over the ankle or wrist;
 Permanent complete paralysis of two limbs;
 Brain injury resulting in incurable imbecility or insanity; and
 Such other cases which are adjudged to be total and permanent disability by a duly licensed
physician and approved by the Board of Trustees.
 Separation from the service due to health reason.
 Permanent departure from the country.
 Death. In case of death, the Fund benefits shall be divided among the member’s legal heirs in accordance
with the New Civil Cide as amended by the New Family Code.

2. MULTI-PURPOSE LOAN

This program aims to provide financial assistance to PAG-IBIG members for purposes of minor home improvement,
livelihoof, medical, educational. Purchase of appliance and furniture and other needs.

Borrower Elegibility

New Loan

1. With at least 24 monthly contributions.

2. An active member at the time of loan application, with atleast 1 monthly contribution for the last 6 months.

3. Member- applicant’s net take home pay shall not fall below the minimum requirement of General
Appropriations Act (GAA) or company policy, whichever is applicable.

4. If with existing calamity loan, a member shall be allowed to avail of the MPL only after payment of atleast 6
monthly amortizations. The outstanding balance, together with any accrued interests, penalties and charges, shall
be deducted from the proceeds of the MPL.

Loan Renewal

1. With the payment of atleast 6 monthly amortizations. The outstanding balance, together with any accumulated
interests, penalties and charges, shall be deducted from the proceeds of the new loan.

2. An active member at the time of loan application, with atleast 1 monthly contribution for the last 6 months.
3. Member- applicant’s net take home pay shall not fall below the minimum requirement of General
Appropriations Act (GAA) or company policy, whichever is applicable.

3. CALAMITY LOAN

 Who are eligible? The calamity loan program is open to any PAG-IBIG member who:

 Has made atleast 24 monthly savings;

 Is an active member with atleast 5 monthl savings for the last 6 months as of month
prior to the date of loan application; and

 Resides in an area which is declared by the Office of President or the Local Sanggunian
concerned as under a state of calamity. If member has an exisiting Housing Loan, Multi-
Purpose Loan (MPL) and/or Calamity Loan, the account must not be in default as if date
of loan application.

 How much can one loan? An eligible member ma borrow up to a maximum of 80% of his TAV
subject to the terms and conditions of the program.

 What is the payment period? The Calamity loan is amortized pver a period of 24 months with a
grace period of 3 months. Said member shall start paying his loan on the 4 th month following the
date of his DV/Check date.

 Until when can an eligible member avail of the loan? Eligible borrowers must avail of the
Calamity loan within a period of 90 days from the declaration of a state of calamity.

 What are the documentary requirements for the loan application?

 Member- applicant’s net take home pay shall not fall below the minimum requirement of
General Appropriations Act (GAA) or company policy, whichever is applicable.

 Completely filled- up calamity loan application form

 Photocopy of atleast 2 valid IDs

 Proof of income

 For formally employed members, duly accomplished Declaration of Being Affected by

Calamity.

C. MEMBERSHIP PROGRAMS

1. MANDATORY MEMBERSHIP

 All employees who are or ought to be covered by the SSS, provided that actual membership in
the SSS shall not be a condition precedent to the mandatory coverage in the Fund. It shall
include, but are not limited to:

 A private employee, whether permamnent, temporary, or provisional who is not over 60

years old

 A household helper earning at least P1000.00 a month. A household helper is any

person who rendersdomestic services exclusively to a household such as driver,
gardener, cook, governess, and other similar occupations;
  A Filipino seafarer upon the signing of the standard contract of employment between
the seafarer and the manning agency, which together, ehich together with the foreign
ship owner, acts as the employer;

 A self-employed person regardless of trade, business or occupation, with an income of

atleast P1000.00 a month and not over 60 years old;

 An expatriate who is not more than 60 years old and is compulsorily covered by the SSS,
regardless of citizenship, nature and duration of employment, and the manner by which
the compensation is paid. In the absence of an explicit exemption from SSS, regardless
of citizenship, nature and duration of employment, and the manner by which the
compensation is paid. In the absence of an explicit exemption from SSS coverage, the
said expatriate, upon assumption of office, shall be covered by the Fund. An expatriate
shall refer to a citizen of another country who is living and working in the Philippines;

 All employees who are subject to mandatory coverage by the GSIS, regardless of their
status of appointment, including members of the judiciary and constitutional
commissions;

 Uninformed members pf the AFP, Bureau of Fire Protection, Bureau of Jail Management
and Penology, and PNP;

 Filipinos employed by foreign-based employers, whether they are deployed here or

abroad or a combination thereof.

2. VOLUNTARY MEMBERSHIP

An individual at least 18 years old but not more than 65 years old may register with the Fund under voluntary
membership. However, said individual shall be required to comply with the set of rules and regulations for PAG-
IBIG membership. However, said individual shall be required to comply with the set of rules and regulations for
PAG-IBIG members including the amount of contribution and schedule of payment. In addition, they shall be
subject to the eligibility requirements in the event of availment of loans and other programs/ benefits offered by
the Fund.

The following shall be allowed to apply for voluntary membership:

 Non-working spouses who devote full time to managing the household and family affairs, unless they also
engage in another vocation or employment which is subject to mandatory coverage, provided the
employed spouse is registered PAG-IBIG member and consents to the Fund membership of the non-
working spouse;

 Filipino employees of foreign government or international organization, or their wholly-owned

instrumentality based in the Philippines, in the absence of an administrative agreement with the Fund;

 Employees of an employer who is granted a waiver or suspension of coverage by the Fund under RA 9679;

 Leaders and members of religious groups;

 A member separated from employment, local, or abroad, or ceased to be self-employed but would like to
continue paying his/her personal contribution. Such member may be a pensioner, investor, or any other
individual with passive income or allowances;
  Public officials or employees who are not covered by the GSIS such as barangay officials, including
barangay chairmen, barangay council members, chairmen of the barangay sangguniang kabataan, and
barangay secretaries and treasurers;

 Such other earning individuals/ groups as may be determined by the Board by rules and regulations.

The Modified Pag-IBIG II (MP2)

Salient Features:
The MP2 program is solely a savings scheme, designed to provide Pag-IBIG I members with another savings option
that would grant them with a yield higher than those given under the Pag-IBIG I membership program. The
program took effect on 3 February 2010.

o Minimum contribution of Php 500.00 per month

o Term of 5 years, renewable
o Flexible dividend rates but always higher than Pag-IBIG I
o Contributions & earnings are government guarranteed

Monthly Contributions 5 Years 10 Years

Php 500.00 34,484.17 79,553.59
1,000.00 68,968.33 159,107.18
1,500.00 103,452.50 238,660.78
2,000 137,936.66 318,214.37
3,000 206,905.00 477,321.56
4,000.00 275,873.32 636,428.74
5,000.00 344,841.65 795,535.92