Republic Act No 9679 PAG IBIG

7/27/2019 Republic Act No 9679 PAG IBIG

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H. o. 5220S.. o. 291 I

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Begun and held in Metro Manila, on Monday, the twenty-eighthday of July, two thousand eight.

[REPUBLICACT No. 9679 ]AN ACT FURTHER STRENGTHENING THE HOME

DEVELOPMENT MUTUAL FUND, AND FOR OTHERPURPOSES

Be i t enacted by the Senate and House of Represeninfives of thePhilippines in Congress assenib/ed:SECTION. Title. - This Act shall be known as the Home

Development Mutual Fund Law of 2009, otherwise known asPag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko,Industriya at Gobyerno) Fund.

SEC. 2. Declaration of Policy. - I t is the policy of theState to establish, develop, promote, and integrate a nationwidesound and viable tax-exempt mutual provident savings systemsuitable to the needs ofthe employed and other earning groups,and to motivate them to better plan and provide for theiv housing


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needs, by membership in the Home Development MutualFund,with mandatory conhibutom support of the employersin the spiritof social justice and the pursuit of national development.

S E C . 3. Stat em en t of Objectives. - Towards this end, theState shall integrate all laws reIating t o the Home DevelopmentMutual Fund toeffectively achieve the following objectives:

(a) To improve the quality of life of itscitizens by providingthem w i t h sufficient shelter;(b) To provide for an integrated nationwide providentsavings system; and

(c) To provide housing through mobilization of funds forshelter finance.SEC. 4. Def in it ion o fTer ms . - The following terms shall

mean:(a) Board- the duly constituted Board of Trustees of theHome Development Mutual Fund.(b) Compensation - basic monthly sdary plus mandatedcost of living allowance.(c) Contributions - the amount payable to the Fund bythe members and their employers, in accordance with this Act.(d) Dependents - refers to legal dependents of a deceasedmember, as defined under the Family Code.(e) Employee - a n y person in the serviceof an employerwho receives compensation of such services.(f) Employer - any person, na tur al or juridical,domestic or foreign, who carries on in the Pliilippines, or outsideof the Philippines, any trade, business, industry, undertaking

or activity of any kind, and uses the servicqsof another personw h o is under his order as regards such services; the


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government, its national and local offices, political subdivisions,branches, agencies, or instrumentalities, including corporationsowned andlor controlled by the government, and the localgovernment units.

(g) %mployment - any service performed by an employeefor hisher employer within the Philippines: Provided, owever,That any foreign government, international organization or theirwholly-owned ins trumentali ty employing workers in thePhilippines or employing Filipinos outside of the Philippines,may enter into an agreement with the Fund for the inclusion oftheir employees as members of the Fund: Provided, fur ther ,That the term of such agreement conform with the provisions ofthis Act.

(h) Fund - the fund created under this Act which is agovernment financial institution involved in mobilizing providentfunds primarily for shelter finance;

(i) GSIS - the Government Service Insurance Systemcreated under Commonwealth Act No: 186,as amended.6 ) Investible Funds shall mean funds available after

deducting cost of operations and expenses, administrative andgeneral expenses, reserves for benefit claims, provisions for asinking fund for the return of the members equity upon maturityand provision for reserve for loan repayments.

(k) Member . nemployee coverable under this Act andpays the mandated contributions.(l)Membership Term - a period of twenty (20) yearscommencing from the first day of the month to which themembers initialcontribution to the Fund applies: Provided, That

he shallhave contributed a total of two hundred forty (240)monthlycontributions at the time of maturity.

(m) Net Fund Asset - the total assets of the Fund lesscurrent liabilities.


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(n) Permanent Total Disability - loss or impairment of aphysical and mental function resulting from injury or sicknesswhich completely incapacitates a member to perform any work orengage in any business or occupation as determined by the Fund.

(0) SSS - the Social Security System created underRepublic Act No. 1161, as amended.SEC. 5. Fund System. - To carry out the purposes ofthis Act, there is hereby created the Home DevelopmentMutual

Fund of 2009, alfio referred to herein as the Fund, a mutualprovident savings system for private and government employeesand other earning groups, supported by matching mandatorycontributions of their respective employers w i t h housing as theprimary investment.

The Fund shall be a body corporate, with principal officeinMetro Manila, and shall replace the Home Development MutualFund established under PresidentialDecree No. 1752.

SEC. 6. Fund Coueruge. - Coverage in the Fund shallbemandatory upon: (a) all employees covered by the SSS and theGSIS, and their respective employers, notwithstanding any waiverof coverage previously issued, including the uniformed membersof the Armed Forces of the Philippines, the Bureau of FireProtection, the Bureau of Jail Management and Penology, andthe Philippine National Police;(h)Filipinos employed by foreign-based employers; and (c) spouses who devote full-time to managingthe household and family affairs, un less they also engage inanother vocation or employment which is subject to mandatorycoverage, may be covered by the Fund on a voluntary basisadopting as a basis of contributions one-half(U2) of the monthlycompensation income of the employed spouse.

Coverage may also be extended to other working groups,with o r without employer contributions, as may be determinedby the Board of Trustees.

SEC. 7. Fund Generation and Contributions. - Themoney of the Fund shnU be generated by the provident savingsthat the covered employees shallcontribute for the purpose every


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month, and the equal amounts that their respective employersshall mandatorily contribute.Covered employees and employers shall contribute to the

Fund based on the monthly compensation of covered employeesas follows:

Employees earning not more than One thousand fivehundred pesos (P1,500.00)per month - one percent (1%).

Employees earning more than One thousand five hundredpesos (P1,500.00) per month - two percent (2%).

All employers - two percent (2%) of the monthlycompensation of all covered employees.

The maximum monthly compensation to he used incomputing employee and employer contributions shall not he morethan Five thousand pesos (P5,000.00): Provided , That thismaximummay be fixed from time to time by the Board of Trusteesthrough rules and regulations adopted by it, taking intoconsideration actuarial calculations and rates of benefits.

Notwithstanding any contract to the contrary, anemployer shall not deduct, directly or indirectly, from thecompensation of its employees covered by the Fund, or otherwiserecover from them, the employer's contribution with respectto such employees.

SEC.8. Membership Term. - Membership in the Fundshall be for a period of twenty (20) years, except when earlierterminated by reason of retirement, disability, insanity, death,departure from the country o r other causes as may be providedfor by the Board ofTrustees: Prouided, That those who becomemembersof the Fund after the effectivityof this Act may withdrawthe total accumulated value of their contributions to the Fundafter the Bteenth (ltith)year of continuous membership: Provided,further, That said members have no outstanding housing loanswith the Fund: Prouided, finally, That this option shall notprejudice the member's continuing membership in the Fund.


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Resignation, layoff or suspension from employment maynot necessarily constitute a ground for membership termination,except for suspension of contributions.

SEC. 9. Waiver or Suspension of Couerage. - Coverageof the Fund and/or the payment of monthly contribution t o thesame may, by rules or resolutions of the Board of Trustees, bewaived or suspended by reasons of nature ofemployment,conditionof business, ability t o make contributions and other reasonableconsiderations.

S EC. 10. Provident Character. - The Fund shall beprivate in character, owned wholly by the members,administered in trust and applied exclusively for their benefit.All the personal and employer contributionsshallbe fully creditedto each member, accounted for individually and transferable incase of change of employment. They shall ea rn dividends asmay be provided for in the implementing ules. The said amountsshallconst itute the provident fund of each member, t o be paidt o him, his estate or beneficiaries upon termination ofmembership, or from which peripheral benefits fo r the membermay be drawn.

SEC. 11. H ous ing Features. - A member of goodstanding shallbe eligible to apply for housing loans, under suchterms and conditions as may be authorized by the Board ofTrustees, taking into account ability t o pay. The Board ofTrustees shall inst itute policies t o ensure th at lower-incomemembers obtain such housing loans.

SEC.12. ImplementingBody. - The Home DevelopmentMutual Fund created under this Act, shall implement theprovisions hereof.

SEC.13. Powers and Functions of the Fund. - TheFund shall have the powers and functions specified in this Actand the usual corporate powers:

(a) Toformulate, adopt, amend and/or rescind such rulesand regulations as may be necessary t o carry out the provisionsand purposes of this Act, a s well as the effective exercise of the


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powers and functions, and the discharge of duties andresponsibilities of the Fund, its officers and employees;@) To adopt or approve the annual and supplementalbudget of receipts and expenditures including salaries and

allowances of the Fund personnel, t o authorize such capital andoperating expenditures and disbursements of the Fund as maybe necessary and proper for the effective management andoperation of the Fund;

(c) To submit annually to the President of the Philippinesnot later than March 15, a report of its activities and the stateof the Fund during the preceding year, including informationand recommendations for the development and improvementthereoE

(d) To invest not less than seventy percent (70%) of itsinvestible funds to housing, in accordance with this Act;(e) To acquire, utilize, or dispose of, in any mannerrecognized by law, real or personal properties t o carry out the

purposes of this Act;(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 andits project; to require reports, compilations and analysis ofstatistical and economic data, as well a s make such other studiesand surveys as may be needed for the proper administration anddevelopment of the Fund;

(g) To have the power of succession; to sue and be sued; toadopt and use a corporate seal;(h) To enter into and carry out contracts of every kindand description with any person, firm or associationor corporation,

domestic or foreign;(i) To borrow fu nd s from any source, priv ate o rgovernment, foreign or domestic;


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fj) To invest, own or otherwise participate in equity inany establishment, Grm or entity; t o form, organize, invest in orestablish and maintain a subsidiary or subsidiaries in relation toany of its purposes;

(k) To approve appointments in the Fund exceptappointmentstopositions which are policy determining, primarilyconfidential or highly technical in nature according to the civilservice rules and regulations: Prouided,That all positions in theFund shall be governed by a compensation and positionclassification system and qualification standards approved by theFund's Board of Trustees based on a comprehensive ob analysis,wage compensation study and audit of actual duties andresponsibilities: Prouided, further, That the compensation planshall be comparable wi t h prevailing compensation plans in theprivate sector and shall be subject t o the periodic review of theBoard no more than once every four (4) ears without prejudice toyearly merit reviews or increases based on productivity and 'profitability. The Fund shall, therefore, be exemptfiom any laws,rules and regulations on salaries and compensations;

(l)o maintain a provident fund, which shall consist ofcontributions made by both the Fund and tsofficersand employeesand their earnings, for the payment ofbenefits to such officialsand employeesor their heirs under such terms and conditions asit may prescribe;

(m) To design and adopt an early retirement incentive plan(ERIP)for its own personnel;(n) To establish field offices and t o conduct its businessand exercise its powers in these places;(0 ) To approve restructuring proposal for the payment of

due but unremitted contributions and unpaid loan amortizationsunder such terms and conditions as the Board of Trustees mayprescribe;

(p) To determine, fix and impose interest and penaltiesupon unpaid contributions due from employers and employees;


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(s) To ensure the collection and recovery of allindebtedness, liabilities and/or accountabilites, including unpaidcontributions in favor of the Fund arising from any cause orsource or whatsoever, due from all obligors, whether public orprivate; to demand payment of the obligations referred to herein,and in the event of failure or refusal of the obligor or debtor tocomply with the demand, to initiate or insti tute the necessaryor proper actions or sui ts, criminal, civil, administrative, orotherwise, before the courts, tribunals, commissions, boards orbodies of proper jurisdiction: Prou ided , howeuer, That the Fundmay compromise or release, in whole or in part, any interest,penalty or civil liability to the Fund in connection with thecollection of contributions and the lending operations of the Fund,under such terms and conditions as prescribed by the Board ofTrustees: Prou ided , fuither, That the Board may, uponrecommendation of the Chief Executive Officer, deputize anymember of the Fund's legal staff to act as special sheriff inforeclosure cases, in the sale or attachment of the debtor'sproperties, and in the enforcement of court writs and processes incases involving the Fund. The special sheriff of the Fund shallmake a report to the proper court after any action taken byhimwhich shall treat such action as if it were an act of its own sheriffsin all respects;

(r) To design and implement other programs tha t willfurther promote and mobilize savings and provide additionalresources for the mutual benefit of the members with appropriatereturns on the savingslinvestments. The program shall be sodesigned as to spur socioeconomic take-off and maintain continuedgrowth;

(s) To conduct continuing actuarial and statisticalstudiesand valuations'to determine the financial condition of the Fundand taking into consideration such studies and valuations andthe limitations herein provided, readjust the benefits,contributions, interest rates of the allocation or reallocation ofthe funds to the contingencies covered; and

(t) To exercise such powers and perform such acts as maybe necessary, useful, incidental or auxiliary to carry out theprovisions of this Act.


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SEC.14. Board of P ' us t ees . - The corporate powers andfunctions of the Fund shall be vested in and exercised by theBoard of Trustees appointed by the President of the Philippines,composedof the following:

(a) The Chai rper son of the Hous ing and UrbanDevelopment and Coordinating Council, as the ex of f ic ioChairman;

@) The Secretary of the Department of Finance, as theex officio Vice Chairman;(c) The Secretary of the Department of Labor andEmployment or hidher duly designated undersecretary, asex officio member;(d) The Secretary of the Department of Budget andManagement or hisher duly designated undersecretary, as

ex officiomember;(e) The Secretaryof the Department of Trade and Industry,or hish er duly designated undersecretary, as exofficio member;(0 The Chief Executive Officerof the Fund, asmember; and(g) Five (5) appointive members, two (2) representativesofprivate employees, two (2) representatives ofprivate employers

and one (1) representative of government employees.The four (4)private sector representatives shall each beappointed by the President of the Philippines for a term of two (2)

years: Prouided, however, That of the first to be appointed,one (1) epresentative of the employers shall have a term of on lyone (1)year. The representative of the government employeesshall be appointed by the President of the Philippines for a termof two (2)years.

The Chairman, Vice Chairman and members of the Boardshallbe entitled toa reasonableper diem for each meeting actuallyattended at such amounts as may be fixed by the Board inaccordance with existing l aws , rules and regulations.


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SEC. 15. Powers of the B o a r d . - The Board shall havethe followingpowers:

(a) To formulate policies, rules and regulations to carryout effectively the functions of the Fund under this Act;(b) To promulgate such rules and regulations as may benecessary or proper fo r the effective exercise of the powers and

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

(c) To authorize expenditures of the Fund in the interestof effective administration and operations; to adopt from time totime the budgets for said purposes;

(d) To approve the annual and supplemental budget ofreceipts and expenditures including salaries and allowances ofthe Fund personnel; t o authorize such capital and operatingexpenditures and disbursements as may be necessary and properfor the effective management and operation of the Fun d

(e) To condone, in whole or in part, penalties imposed onloans of memberslborrowers who, fo r justifiable reasons prescribedby the Board, failedto pay o n time any obligation due to the Fund:Prouided, That such exclusive power t o condone shall Likewiseapply to penalties imposed on employers, who justifiably fail toremit when due the reqnired contributions of their employees;

(0 To approve the Fund's organizational andadministrative structures and staffing pat tern, and to establish,fix, review, revise and adjust the appropriate compensationpackage fo r the officers and employees ofthe Fund in accordancewith Section 13%) hereof; and

(g) To exercise such powers as may be necessary to carryinto effect the powers and accomplish the purposes for which theFund is established.

SEC.16. Rule-Making ower . - The Board of Trustees ishereby authorized to make and change needful rules andregulations, which shall be published in accordance with law or


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a t leas t once in a newspaper of general circulation in thePhilippines, to provide for, but n o t limited to, the followingmatters:

(a) The effoctive administration, custody, development,utilization and disposition of the Fund or parts thereof, includingpayment of amounts credited to members or to their beneficiariesor estates;

(b) Grounds for and effects or termination of membershipother than by completion of term;(c) Fund earnings and their distribution, investmentandlor plowing back for the exclusive benefit of the members;,(d) Interim disbursements of accumulated values tomembers of ameliorative and similar purposes;(e) Benefits, contributions including their rates, premium

rates and interest rates;(0 Housing and other loan assistance programs formembers;(g) Adjudication and settlement of claims and disputes andthe procedures for the same onany matters involving the interestsof members in the Fund;(h) Optimize the effectiveness of the Funds coverage; and(i) Other matters that, by express or implied provisionsof this Act, shall require implementation by appropriate policies,rules and regulations.SEC.17. Powers and Du ties of the Ch ief ExecutiueOfficer. - The Chief Executive Officer of the Fund shallexecute

and administer the policies and resolutions approved by the Boardof Trustees, prepare its agenda and direct and supervise theoperations and management of the Fund. The Chief ExecutiveOfficer, subject to the approval of the Board in case of approval of


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managerial positions and above, and the confirmationof the Boardinbelow that of manager level, shall appoint the personnel of theFund, remove, suspend or otherwise discipline them for causeand prescribe their duties and qualifications, in accordance withexisting civil service laws, rules and regulations, t o the end thatonly competent personnel may be employed.

SEC. 18. Money Inuestments. - All monies of the Fundnot needed t o meet current administrative and operationalrequirements, shall be invested with due and prudent regard forits safety, growth and liquidity needs.

SEC. 19. Ezempt ion from T ax , Legal Process an d Lien. -All laws to the contrary notwithstanding, the Fund and all itsassets and properties, all contributions collected and al accrualsthereto and income or investment earnings therefrom, as well asall supplies, equipment, papers or documents shall be exempt&om any tax, assessment, fee, charge, or customs or import duty;and all benefit payments made by the Pag-IBIG Fund shallLikewise be exempt from all kinds of taxes, fees or charges, andshall not be liable to attachments, garnishments, levy or seizureby or under any legal o r equitable process whatsoever, eitherbefore or after receipt by the person or persons entitled thereto,except to pay an y debt of the member to the Fund. No tax measureof whatever nature enacted shall apply to the Fund, unless itexpressly revokes the declared policy of the State in Section 2hereof granting tax exemption to the Fund. Any tax assessmentagainst the Fund shall be null and void.

SEC. 20. G o v e r n m e n t G u a r a n t e e . - The benefitsprescribed in this Act shall not be diminished and t o guaranteesaid benefits, the government of the Republic of the Philippinesaccepts general responsibility for the solvencyof the Fund.

SEC.21. Adm inistrat ion Costs . - The Fund shall bearthe costsof its administration and development, in such amountsandfor limits as the Board of Trustees may deem appropriate,but not exceeding two percent (2%)ofthe N et Fund Assets of theprevious year, excluding operating cost directly relating to thelending operations of the Fund.


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SEC. 22. Audit. - The Chairman of the Commission onAudit shall act as the ex officio auditor of the Fund and,accordingly, is empowered to appoint a representative and othersubordinate personnel to perform and report on such audit duties,responsible t o and removable only by the Commissionon AuditChairman, without prejudice, however, t o the power of the Boardof Trustees t o contract for another mode of independent audi tservice, in addition to that provided by the Commission on Auditas provided for under Presidential Decree No. 1445, therwiseknown as the Government Auditing Code of the Philippines.

SEC. 23 . Remit tance of Contribut ions. - a) It shall bethe duty of every employer, private or public, t o set aside andremit the contributions required under this Act in accordancewith a mechanism determined by the Board of Trustees.

@) Every employer required t o set aside and remit suchcontributions as prescribed under this Act shall he liable fortheir payment, and nonpayment shall further subject theemployer t o a penalty of three percent (3%)per month of theamounts payable from the date the contributions fall due untilpaid.

(c) It shall be mandatory and compulsory forallgovernmentinstrumentalities, agencies, including government-owned and-controlled corporations, to provide the payment of contributionsin their annual appropriations. Penal sanctions shall be imposedupon these employers w ho fail to include the payment ofcontributions on time, or delay the remittance of the requiredcontributions t o the Fund. The heads ofoffices and agencies shallbe administratively liable fo r non-remittance of the requiredcontributions to the Fund.

(d) Failure or refusal of the employer to pay or t o remitthe contributions herein prescribed shallnot prejudice the rightof the covered employee to the benefits under this Act.(e) The contributions under this Act, in cases where anemployer refuses or neglects to pay the same, shall be collected

by the Fund in the same manner as taxes a re made collectibleunder the National Internal Revenue Code, as amended.


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SEC. 30. Repea l ing C lause . - Presidential DecreeNo. 1530,as amended by Executive Order Nos. 527 (series of 1979)and 538 (seriesof 1979);Presidential Decree No. 1752,as amendedby Executive Order Nos. 35 (seriesof 1986) and 90 (seriesof 1986);and Republic Act No. 8501 are hereby repealed. Seclion 6 ofRepublic Act No. 7742 is hereby amended accordingly. AU otherlaws, decrees, executive orders, or rules and regulations, or partsthereof inconsistent with or contrary to the provisions of this Actor its purposes are hereby amended or modified accordingly.

SEC. 31. Effectivity. - Th is Act shall takc effect fifteen(15)daysafter the mmpletionofits publicationin the Ofi iaZ Gazetteor in a t east two (2) national newspapers of general circulation.

This Act which is a consolidation of House Rill No. 5220 andSenate Bill No. 2971 was finally passed by the House ofRepresentatives and the Senate on June I , 2009.

Secretary of ;he Senate Secretary GeneralHouse of RepresentativesApproved: J l J L 2 12009

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Republic Act No 9679 PAG IBIG