Premium contributions to the Pag-IBIG Fund are likely to increase if Congress approves a bill strengthening the housing fund scheme.
The bill transfers tha authority to fix the rates of contributions to the Pag-IBIG Fund from Congress to the executive branch through the Fund’s board of trustees, now chaired by Vice President Noli de Castro.
The final version of the bill, which amends the Pag-IBIG fund law (Presidential Decree 1752), has been approved by the bicameral conference committee. It was ratified by the Senate on March 4, before senators went on a Lenten break. But it remains pending before the House of Representatives.
Pag-IBIG Fund has become the single biggest source of housing finance in the country, accounting for 40 percent of the total funds extended to borrowers in 2007.
Since 1986, the premium contributions (employee and employer’s counterpart) have been pegged at 2 percent of a member’s montly compensation, which shall not be more than P5,000. This means that the maximum contributions is P100 from both the employee and the employer.
“Maintaning the employee and employer contribution at P100 each would eventually be detrimental to the viability of the Fund and even endangers its existence,” the proponents said.
Proponents of the bill pointed out that the minimum daily wage in the National Capital Region has been raised to P382 as of last year. Hence, the minimum monthly compensation is now placed at P8,404.
They said that Congress has delegated to the respective commissions or boards of the Social Security System, Government Service Insurance System and PhilHealth the authority to adjust their respective contribution rates, based on members’ compensation, without even requiring the approval of the President of the Philippines.
The possibility of an upward adjustment in Pag-IBIG contributions looms as even as Senator Mar Roxas has proposed a temporary moratorium on Pag-IBIG Fund contributions while the country is reeling from the adverse impact of the global economic meltdown.
The bill restores the tax exemption privilege of the Pag-IBIG Fund. This privilege was revoked under Executive Order 93, which withdrew all tax and duty incentives granted to government and private entities effective 1986. –Fel V. Maragay, Manila Standard Today
World Day for Safety and Health at Work
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