The Home Development Mutual Fund (HDMF), also known as the Pag-IBIG Fund, got an ally in its implementation of increase in the mandatory savings rate for all its members starting this month from a big labor group which argued that rise in contribution for both members and employers will improve the benefits to workers.
In a letter sent to Pag-IBIG, the Trade Union Congress of the Philippines (TUCP) said the existing contribution rate is nearly four-decade old and needs an increase for the benefits of those in the labor sector.
“The TUCP believes that the adjustment in the savings rates will double the amount of members’ maturity claims, as well as other important benefits of Pag-IBIG (Fund) members, such as cash loans, calamity loans and housing loan entitlements,” said lawyer Raymond Democrito T. Mendoza, TUCP president.
“In addition, an adjustment is necessary to restore the lost real value of the P100 minimum contribution which was set all the way back in 1986,” he added.
The TUCP is one of the country’s largest labor organizations and is composed of 27 labor federations representing workers in the private and public sectors, seafarers, Overseas Filipino Workers (OFWs), and workers from the informal sector.
Since 2019, the group has been calling for the increase in the mandatory savings for both the Pag-IBIG members and employers.
Pag-IBIG was supposed to implement the increase in contribution rate but decided to defer it this year due to the effects of the Covid-19 pandemic.
Under Pag-IBIG Fund’s new savings rates, the maximum monthly compensation to be used in computing the required two percent employee savings and two percent employer share of Pag-IBIG Fund members shall be increased to P10,000 from the current P5,000.
As a result, the monthly savings of Pag-IBIG Fund members, for both the employee’s share and the employer’s counterpart, shall increase to P200 from the current P100.
Pag-IBIG Fund Chief Executive Officer Marilene C. Acosta, for her part, was elated with the expression of support of the TUCP and assured the trade union federation and Pag-IBIG Fund members of better benefits as the agency prepares to implement the new rates.
“We thank the TUCP for supporting our plans, and for recognizing that raising our monthly savings rates will allow Pag-IBIG Fund to continue to provide affordable home loans to its members in the coming years,” said Acosta.
“It is also important to note that the increase in our monthly savings rates shall benefit our members the most because every peso they save will go to their Pag-IBIG Savings,” she added.
Under the new rates, Acosta explained that workers will have higher Pag-IBIG Savings that earn annual dividends, which they shall receive upon membership maturity or retirement.
“And, because of their higher savings, they shall also be entitled to higher multi-purpose and calamity loan amounts to help them with their financial needs,” Acosta emphasized.