Pag-IBIG Fund looking to hike monthly contributions

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Pag-IBIG Fund
PAG-IBIG Fund wants to hike employees’ monthly contribution to support growing demand for housing loans.

THE HOME Development Mutual Fund (Pag-IBIG Fund) is considering to increase the monthly contribution share of employees to support growing demand for housing loans projected in the coming years.

In a press conference, Pag-IBIG Fund Chairman of the Board Eduardo D. Del Rosario floated the idea of increasing the monthly contribution to P300 from the current P200, which may be done as early as 2021.

“Actually, we have discussed this during our previous board meeting. If ever the demand will be so high, then we might increase from P100 to P150,” Mr. Del Rosario told reporters late Wednesday.

“We are thinking about 2021. We will see how the market grows and the demand. We will watch the trend for the housing sector.”

Currently, the minimum monthly contribution of Pag-IBIG Fund is at P200, equally shared by the employer and the employee.

Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti explained the mutual fund may opt to increase its contribution to address the financing gap, given that demand for home loans is increasing.

According to the 2018 financial report delivered by Mr. Del Rosario on Wednesday, Pag-IBIG Fund’s home loan takeouts reached P75.31 billion, 16% higher than the P65.1 billion tallied the previous year.

“To continuously fund the lending of our members…we can also encourage members to support an increase in monthly contribution,” Mr. Moti said.

Apart from increasing its monthly contribution, Pag-IBIG Fund said it is also considering to adjust its rates or borrow additional fund to support the growing demand for housing loans.

“Based on projections…it looks like 2020, we would hit the P100 billion (home loan takeouts). If that trend holds, then we’ll have to look for other fund-sourcing activities of ours, either we do bond flotation… or increase [the members’] savings rate,” Mr. Moti said.

However, he added that the mutual fund still does not see any reason to borrow.

The mutual fund said the last time it adjusted the contribution rate was in 1982, with the value of P100 around that time now valued at P1,866.

“I think it’s better that we open this in the meantime so all the members will be aware of the possibility and they won’t be surprised,” Mr. Del Rosario said.

“If we will make [the monthly contribution to] P150 [for employees, we can] ensure that we can maintain the interest rate and we can provide the best services that Pag-IBIG Fund can offer.” — K.A.N. Vidal