. .  
c j j . ~ ~ ,  
c 
,i:ci., .. , ,~ 
FOURTEENTH CONGRESS OF THE ) 
REPUBLIC O F  THE PHILIPPINES 
) 
SECOND REGULAR SESSION 
1 
8 FlEC 15 1’::ljg 
COMMITTEE REPORT NO. 
Prepared and submitted jointly by the Committee on Banks, Financia1 Institutions 
and Currencies; Urban Planning, Housing and Resettlement; and Ways and Means 
on DEC 1 5 2008 
. 
RE 
: Senate Bill No. 2971 
Recommending its approval in substitution of Senate Bills No. 2450, 2262 and 2284. 
Sponsor 
: Senator Edgardo J. Angara 
Mr. President 
The Committees on Banks, Financial Institutions and Currencies; Urban 
Planning, Housing and Resettlement; and Ways and Means to which were referred 
Senate Bill No. 2262, introduced by Senator Zubiri, entitled; 
“AN ACT FURTHER STRENGTHENING THE HOME DEVELOPMENT MUTUAL 
FUND, TO BE KNOWN HEREON AS THE PAG-IBIG FUND, AMENDING FOR 
THE PURPOSE PD 1152, AS AMENDED, AND FOR OTHER PURPOSES” 
Senate Bill No. 2284, introduced by Senator Trillanes, entitled: 
“AN ACT FURTHER STRENGTHENING THE PAG-IBIG FUND AND FOR 
OTHER PURPOSES” 
Senate Bills No. 2450 introduced by Senator Gordon, entitled; 
“AN ACT AMENDING PRESIDENTIAL DECREE NO. 1152, OTHERWISE 
KNOWN AS THE HOME DEVELOPMENT MUTUAL FUND LAW OF 1980, AS 
AMENDED” 


have considered the same and have the honor to report them back to the Senate 
with the recommendation that the attached Senate Bill No. 2 71 
prepared 
by the Committees, entitled: 
“AN ACT FURTHER STRENGTHENING THE HOME DEVELOPMENT MUTUAL 
FUND, TO BE KNOWN HEREON AS THE PAG-IBIG FUND, AMENDING FOR 
THE PURPOSE PD NO. 1152, AS AMENDED, AND FOR OTHER PURPOSES’’ 
be approved in substitution of Senate Bill No. 2262, 2284 and 2450 with Senators 
Zubiri, Trillanes and Gordon and the members of the Committees on Banks, 
Financial Institutions and Currencies; Urban Planning, Housing and Resettlement 
and Ways and Means as authors thereof. 
Respectfully Submitted: 
Chairman 
Committee on Urban Planning, 
Housing and Resettlement 
Member, Committee on Ways 
and Means 
Chairman 
Committee on Banks, Financial 
Institutions and Currencies, 
Member, Committee on Urban 
Planning, Housing and Resettlement 
Member, Committee on Ways and Means 
PA A?Y 
I 0 
LACSON 
mittee on Ways and Means 
on Banks, 
Financial Institutions and Currencies 
Members: 
FRANCIS G. ESCUDERO 
Member, Committee on Urban 
Member, Committee on Banks, Financial 
Planning, Housing and Resettlement 
Institutions and Currencies 
Member, Committee on Ways and 
Member, Committee on Urban Planning, 
Means 
Housing and Resettlement 
Member, Committee on Ways and Means 
ALAN PETER S. CAYETANO 


ember, Committee on Banks, 
P- 
Financial Institutions and Currencies 
er, Committee on Urban 
Housing and Resettlement 
1 
Member, Committee on Ways and Means 
G” REVILLA, JR. 
mittee on Banks, Financial 
Member, Urban Planning, Housing 
and Resettlement 
M. A. MADRIGAL 
Member, Committee on Urban Planning, 
Housing and Resettlement 
Member, Committee on Ways and Means 
Member, Committee on Ways and Means 
LOREN B. LEGARDA 
Member, Committee on Banks, Financial 
Institutions and Currencies 
Member, Urban PIanning, Housing 
and Resettlement 
Member, Committee on Ways and Means 
MIRIAM DEFENSOR SANTIAGO 
Member, Committee on Banks, 
Financial Institutions and Currencies 
BENIGN0 S. AQUINO 111 
Member, Committee on Urban Planning, 
Housing and Resettlement 
MAR A. ROXAS 
Member, Committee on Banks, 
Financial Institutions and Currencies 
Member, Committee on Ways and Means 
and Means 
Member, Committee on Ways and Means 
JOKER P. ARROYO 
Member, Committee on Ways and Means 
EX-OFFICIO MEMBERS 
4Minoriiy Leader 
Majority Leader 
n 
Pre ‘dent Pro-Tempore 
u- 


wFFc-f: 
<,p . / I  
.,i ,,,!,,, : 
FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
1 
e, igl: 15 1’ :: :!.:6 
SENATE 
/ 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
L 
Prepared by the Committees on Banks, Financial Institutions and Currencies; 
Urban Planning, Housing and Resettlement and Ways and Means 
AN ACT FURTHER STRENGTHENING THE HOME DEVELOPMENT 
AMENDING FOR THE PURPOSE PD NO. 1752, AS AMENDED, AND FOR 
OTHER PURPOSES 
MUTUAL FUND, TO BE KNOWN HEREON AS THE PAG-1BIG FUND, 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Tifle. This Act shall be known as the “Pag-IBIG Fund Law of 
2008”. 
SEC. 2. Declaration of 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 
Pag-IBIG Fund, with mandatory contributory support of the employers in the spirit of 
social justice and the pursuit of national development. 
SEC. 3. Stafernent of Objectives. - Towards this end, the state shall integrate all 
laws relating to the Pag-IBIG Fund to effectively achieve the following objectives: 
(a) To improve the quality of life of its citizens by providing them with sufficient 
shelter; 
(b) To provide for an integrated nationwide provident savings system; and 
(c) To provide housing through mobilization of funds for shelter finance. 
SEC. 4. Definition of Terms. The following terms shall mean: 
(a) “Board” -the duly constituted Board of Trustees of the Pag-IBIG Fund; 
(b) “Compensation” - basic monthly salary plus mandated cost of living 
allowance; 
(c) “Contributions” - the amount payable to the Fund by the members and their 
employers, in accordance with this Act; 
(d) “Dependents” - refer to legal dependents of a deceased member, as defined 
under the Family Code. 
(e) “Employee” - any person in the service of an employer who receives 
compensation of such services; 
1 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
I6 
17 
I8 
19 
20 
21 
22 
23 
24 
25 
2G 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
( f )  “Eniploper” - ‘my 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, its 
national a%d local offices, political subdivisions, branches, agencies, or 
instrumentalities, including corporations owned and/or controlled by the 
governmeiit, and the local government units; 
(g) “Employment” - any service performed by an employee for his/lier employer 
within the Philippines: Provided, however, that any foreign govermnent, 
inteniatioiial organization or their wliolly-owned instrumentality employing 
workers in the Philippines or employing Filipinos outside of the Philippines, 
may enter into an agreemeut with the Fund for the inclusion of their 
employees as members of the Fund: Provided, further, that the term of such 
agreement conform with the provisions of this Act. 
(h) “Fund” - the fund created under this Act which is a government finaiicial 
institution involved in mobilizing provident fund’s primarily for shelter 
finance; 
(i) “GSIS” - the Government Service Insurance System created under 
Commonwealth Act No. 186, as amended; 
(j) “Investible Funds” - shall mean funds available after deducting cost of 
operations and expenses, admiiiistrative and general expenses, reserves for 
benefit claims, provisions for a sinkiiig fund for the return of the members’ 
equity upon maturity and provision for reserve for loan repayments. 
(I<) “Member” - an employee coverable under this Act and pays the mandated 
contributions; 
(1) “Membership Term” - a period of twenty (20) years commencing fiom the 
first day of the month to which the member’s initial contribution to the Fund 
applies: Provided, that he shall have contributed a total of two hundred forty 
(240) monthly contributions at the time of maturity; 
(m)“Net Fund Asset” - the total assets of the Fund less current liabilities; 
(n) “Permanent Total Disability” - loss or impairment of a physical aiid 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; 
(o) “SSS” - the Social Security System created under Republic Act No. 1161, as 
amended; 
SEC. 5. Flind Systen7. To carry out the purposes of this Act, the Pag-IBIG Fund 
38 
is hereby created. The Fund is a mutual provident savings system for private aiid 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
1s 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
government employees and other earning groups, supported by matching niandatovy 
contributions of their respective employers with housing as the primary investment. 
The Fund shall be a body corporate, with principal office in Metro Manila, and 
shall replace the Home Development Mutual Fund established under Presidential Decree 
No. 1752, as amended. 
SEC. 6. Fund Coverage. Coverage in the Fund shall be mandatory upon: (a) all 
employees covered by the SSS and the GSIS, and their respective employers, 
iiotwithstanding any waiver of coverage previously issued, including the uniforined 
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; (b) 
Filipinos employed by foreign-based employers; and (c) spouses who devote full time to 
managing the household and family affairs, unless they also engage in another vocation 
or einploynient which is subject to mandatory coverage, may be covered by the Fund 011 a 
voluntary basis adopting as a basis of contributions one-half (1/2) of the monthly 
coinpensation income of the employed spouse. 
Coverage may also be extended to other working groups, with or without 
employer contributions, as may be determined by the Board of Trustees. 
SEC. 7 .  Fund Generation and Contributions. The Funds of the Fund shall be 
generated by the provident savings that the covered employees shall contribute for the 
purpose every month, and the equal amounts that their respective employers shall 
rnandatory contribute. 
Covered employees and employers shall contribute to the Fund based on the 
Monthly Compensation of covered employees as follows: 
“Employees earning not more than One thousand five hundred pesos 
(P1,500.00) per month - one percent (1%). 
“Employees earning inore than One thousand five hundred pesos 
(P1,500.00) per month- two percent (2%). 
“All employers - two percent (2%) of the monthly compensation of 
all covered employees. 
The inaxiinum monthly compensation to be used in computing employee and 
employer contributions shall not be more than five thousand pesos (P5,OOO.OO); Provided, 
that this maximum may be fixed from time to time by the Board of Trustees through rules 
and regulations adopted by it, taking into consideration actuarial calculations and rates of 
benefits. 
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. 
3 


I 
2 
3 
4 
5 
6 
7 
X 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
SEC. 8. Membership Term. Mcnibership in the Fund shall be for a period of 
twenty (20) years: Provided, that tlie member shall have contributed a total of two 
hundred forty (240) monthly contributions at thc time of maturity, except when earlier 
terminated by reason of retirement, disabilily, separation from the service due to health 
reasons, insanity, death, departure from the country or other causes as may be provided 
for by the Board ofTrustees. 
Resignation, separation or suspension from employment may not necessarily 
constitute a ground for membership termination, except for suspension of contributions. 
SEC. 9. Waiver or Siispensiorz of Coverage. Coverage of the Fund and/or the 
payment of monthly contribution to the same may, by rules or resolutions of tlie Board or 
Trustees, be waived or suspended by reasons or nature of employment, condition of 
business, ability to make contributions and other reasonable considerations. 
SEC. 10. Provident Clinracter. The Fund shall be private in character, owned 
wholly by the members, administered in trust and applied exclusively for their benefit. 
All the personal aiid 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 may be provided for in the implementing rules. The said amounts shall 
constitute the provident fund of each member, to be paid to him, his estate or 
beneficiaries upon termiliation of membership, or from which peripheral benefits for the 
member may be drawn. 
SEC. 11. Housing Features. A member of good standing shall be eligible to 
apply for housing loans, uiider such terms and conditions as may be authorized by the 
Board of Trustees, taking into account ability to pay. The Board of Trustees shall institute 
policies to ensure that lower-income members obtain such housing loans. 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 tlie enforcement of court writs and processes in cases 
involving tlie Fund. The Special Sheriff of tlie Fund shall male a report to tlie 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. 
SEC. 12. Implementing Body. The Pag-IBIG Fund created uuder this Act, shall 
implemeut the provisions hereof. 
SEC. 13. Powers and Fuizctions of the Fund The Fund shall have the powers 
and functions specified in this Act aiid the usual corporate powers: 
(a) To formulate, adopt, amend and or rescind such rules and regulations as may 
be necessary to carry out the provisions and purposes of this Act, as well as 
tlie effective exercise of the powers and functions, aiid the discharge of duties 
and responsibilities of the Fund, its officers and employees; 
4 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
31 
(b) To adopt or approve the aiinual and supplemental budget of receipts aud 
expenditures including salaries and allowances of tlie Fund 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 tlie preceding year, 
including information and recommendations for the development and 
improvement thereof; 
(d) To invest its Funds in accordance with this Act; 
(e) To acquire, utilize, or dispose of, in any manner recognized by law, real or 
personal properties to 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 and its project; 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 tlie Fund; 
(8) To have the power of succession; to sue and be sued; 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 corporations, domestic or foreign; 
(i) To borrow 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 approve appointments in the Fund except appointments to positions which 
are policy determining, primarily confidential or highly technical in nature 
according to the civil service rules and regulations; Provided, that all positions 
in the Fund shall be governed by a compensation and position classification 
system qualification standards approved by the Fund’s Board of Trustees 
based on a comprehensive job analysis, wage compensation study and audit of 
actual duties and responsibilities; Provided, further, that the cornpensation 
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; 
5 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
(1) To maintain a provident fund, wliich shall consists of Contributions made by 
both the Furid and its officers and employees and their earnings, for the 
payment of benefits to such o€ficials aiid employees or their heirs under such 
terms and conditions as it may prescribe; 
(m) To design and adopt an ear!y retirement incentive plan (ERIP) for its own 
personnel; 
(11) To establish field offices aid to conduct its business and exercise its powers in 
these places; 
(0) To approve restructiuing 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; 
(p) To determine, fix aud impose interest and penalties upon unpaid contributions 
due from employers and employees; 
(q) To ensure the collection and recovery o f  all indebtedness, liabilities and/or 
accountabilities, iiicluding 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 or in part, any interest, penalty or civil 
liability to tlie Fund in connection with the collection of contributions and the 
lending operations of the Funds, under such terms and Conditions as 
prescribed by the Board of Trustees; 
(r) To design and implement other programs that will further promote and 
mobilize savings and provide additional resources for the mutual benefit of 
the ineiiibers with appropriate returns on the savings/investmellts. The 
program shall be so designed as to spur socio-economic take-off aiid maintain 
continued growth; 
(s) To conduct continuing actuarial and statistical studies and valuations to 
determine tlie financial condition of the Fund and talcing into consideration 
such studies and valuatioiis and the limitations herein provided, readjust the 
benefits, contributions, interest rates of the allocation or reallocation of lhe 
Funds to the contingencies covered; and 
(t) To exercise such powers and perform such acts as may be necessary, useful, 
incidental or auxiliary to carry out tlie provisions o f  this Act. 
6 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
SEC. 14. Bocrrd of Trustees. 'The corporate powers and functions of the Fund 
shall be vested in and exercised by the Board of Trustees appointed by the Presideut of 
the Philippines, composed of the following: 
(a) The Chairperson of the Housing and Urban Development and Coordinating 
Council, as the ex-officio Chairman; 
(b) The Secretary o€ the Departineiit of Finance, as the ex-officio Vice Chairman; 
(c) The Secretary of the Departmeut of Labor and Employment or his/her duly 
designated undersecretary, as ex-officio member; 
(d) The Secretary of Budget and Management or hidher duly designated 
undersecretary, as ex-officio member; 
(e) The Secretary of Department of Trade aid Industry, as ex-ofJicio member; 
(f) The Chief Executive Officer of the Fund, as member; 
(g) Five (5) appointive members, two (2) representatives of private employees, 
two 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, oiie 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 or the Philippines for a term of two (2) years. 
The Chairman, Vice Chairman, and members of the Board shall be entitled to per 
diem for each meeting actually attended at such amounts as may be fixed by the Board in 
accordance with existing laws, rules and regulations. 
SEC. 15. Powers of tlze Buard. 'The Board shall have the following powers: 
(a) To forinulate policies, rules and regulations to carry out effectively the 
functions of the Fund under this Act; 
(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 inanageinent and operation of the Fund; 
(e) To condone, in whole or in part, penalties imposed on loans of 
niembershorrowers who, for justifiable reasons prescribed by the Board, 
7 


I 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
21 
28 
29 
30 
31 
32 
1 
.1 
3 3 
34 
35 
36 
37 
38 
failed to pay on tinre any obligation due to the Fund; Provided that SUCI, 
exclusive power to condone shall likewise apply to penalties imposed 011 
employers, who justifiably fail to remit when due the required contributions of 
their employees; 
(0 To exercise such powers as may be necessary to carry into effect the powers 
and accomplish the purposes for which the Fund is established. 
SEC. 16. Rule-Mnking Power. The Board of Trustees is hereby authorized to 
iiialte and change needful rules and regulations, which shall be published in accordance 
with law or at least once in a newspaper of geiieral 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 or 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 interest rates; 
(f) Housing and other loan assistance programs for 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; 
(11) Optimize the effectiveness of the Funds coverage; and 
(i) Other matters that, by express or implied provisions of this Act, shall require 
implementation by appropriate policies, rules and regulations. 
SEC. 17. Powers and Duties of Chief Executive Officer. The Chief Executive 
Officer of the Fund 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 managerial positions and above, and the confirmation of the 
Board in below that of manager level, shall appoint the personnel o f  the Fund, remove, 
suspend or otherwise discipline then 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. 
SEC. 18. Moneuy Investments. All moneys of the Fund as are not needed to meet 
current administrative and operational reqiirements, shall be invested with due and 
prudent regard for its safety, growth and liquidity needs. 
8 


1 
2 
3 
4 
S 
6 
7 
8 
9 
10 
I 1  
12 
13 
14 
1s 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
3s 
SEC. 19. Exxeniption from Tax, LegrrlProcess aidlien. 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 earniilgs therefrom, as well as all supplies, 
eqnipnient, papers or documents shall be exempt from any tax, assessment, fee charge, or 
customs or impoit duty; and all benefit payments made by the Pag-IBIG Fund shall 
likewise be exempt from all lciiids of taxes, fees or charges, and shall not be liable to 
attachments, garnislments, 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 hereof granting tax exemption to the Fund. Any tax assessment against the 
F ~ i d  
shall be null and void. 
SEC. 20. Gaverriment Guarantee. The benefits prescribed in ihis Act shall not be 
diminished aiid to guarantee said benefits, the govermnent of the Republic of the 
Philippines accepts general responsibility for the solvency of the Fund. 
SEC. 21. Admiitistration Costs. The Fund shall bear the costs of its 
administration and development, in such amonnts and/or limits as the Board of Trustees 
may deem appropriate, but not exceeding two percent (2?40) of the Net Fund Assets of the 
previous year, excluding operating cost directly relating to the lending operations of the 
Fund. 
SEC. 22. 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 subordiiiate 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 
P.D. No. 1445. 
SEC. 23. Reniittnrzce ofCoittri6ritions. (a) It shall be the duty of every employer, 
private or public, to set aside and remit the contributions required under this Act in 
accordance with a mechanism determined by the Board of Trustees. 
(b) Every employer required to set aside aiid remit such contributions as 
prescribed under this Act shall be liable for their payment, and non-payment shall further 
subject the employer to a penalty of three percent (3%) per month of the amonnts payable 
fiom the date the contributions fall due untii paid. 
(c) It shall be mandatory and compulsory for all government instrumentalities, 
agencies, including government-owned and controlled corporations, io provide the 
payment of contributions in their annual appropriations. Penal sanctions shall be imposed 
upon these employers ivho fail to include the payinelit of contributioiis on time, or delay 
9 


1 
2 
3 
4 
5 
G 
7 
8 
9 
10 
I 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
25 
29 
30 
3 1  
12 
33 
34 
35 
36 
37 
38 
the reniittance o f  the required contributions to the Funds. The heads o f  offices and 
zgencies shall be administratively liable for non-remittance o f  the required contributions 
to the Fund. 
(d) Failure or refusal of the employer to pay or to remit the contributions herein 
prescribed shall not prejudice the right of lhe covered employee to the benefits under this 
Act. 
(e) The contributions under this Act, in cases where an eniployer 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 coinmend 
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. 
SEC. 24. Enzploynzent Records and Reporfs. (a) Each employer shall 
immediately report to the Fund the names, ages, civil status, occupations, salaries, and 
dependents of its covered employees. 
(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 o f  January each year. Such record shall be open for inspection by the 
Fund or its authorized representatives quarterly or as oflen as the Fund may require. 
SEC. 25. Pend Provisions. Refusal or failure without lawful cause or with 
fraudulent intent to comply with the provisions of this Act, as well as the iniplenieiiting 
rules and regulations adopted by the Board of Trustees, particularly with respect to 
registration of employees, collection and remittance of employee-savings as well as the 
employer counterparts, or the correct amount due, within the time set in the iluplementing 
rules and regulations or specific call or extension made by the Fund Management shall 
constitute an offense punishable by a fine of not Jess 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 delinqueiit 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 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, 
10 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
2s 
26 
21 
28 
29 
30 
31 
32 
33 
34 
35 
36 
disbursing officer, budget officer or other oflkial or employee who fails to include in the 
annual budget the amount corresponding to the eniployers’ contributions, or who fails or 
refuses or delays by more than thirly (30) days from the time such amount becomes due 
and demandable or to deduct the monthly contributions of the einployee sball, upon 
conviction by final judgment, suffer the penalties of imprisonment of not more than six 
(6) years, and a h e  of not less than, but not more than twice the amount involved. 
SEC. 26. Visitorial (2nd Enforcement Powers. (a) The Fund or its duly authorized 
representatives is empowered to inspect the premises, books of accounts and records of 
any person or entity covered by this Act; require it to submit its reports regularly; and act 
on violations of any provisions of this Act. 
(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. 
SEC. 27. Borroivers’ Znsiirnncc Account. (a) As part of its investment 
operations, the Fund may act as insurer of all or part of its interest on properties 
mortgaged to the Fund, or lives of borrowers whose loans are financed by tlie Fund. For 
this purpose, the Fiind may establish a separate account to be known as the “Borrowers’ 
Insurance Account”. All amounts received by the Fund in connection with tlie aforesaid 
insurance operations shall be placed in the Borrowers’ Insurance Account. The assets and 
liabilities of tlie borrowers’ insurance account shall at all times be clearly identifiable and 
distinguishable from the assets and liabilities in all other accounts of the Fund. 
Notwithstanding any provision of law to tlie contrary, the assets held in the borrowers’ 
insurance account shall not be chargeable with the liabilities arising out of any other 
business the Fund may conduct but shall be held and applied exclusively for the benefit 
of the owners or beneficiaries of tlie insurance contracts issued by the Fund under this 
paragraph. 
(b) The Fund may insure any of its interest or part thereof with any private 
coinpany or reinsurer. The insurance commission or its authorized representatives shall 
make an examination into the financial condition and methods of transacting business of 
the Fund at least once in two (2) years, but such examination shall be limited to the 
insurance operation of the Fund as authorized under this paragraph and shall not embrace 
tlie other operations o f  the Fund; and the report of said examination shall be submitted to 
the commission and a copy thereof shall be furnished the office of the President of tlie 
I’liilippines within a reasonable time after tlie close of the examination: Provided, that for 
each examination, the Fund shall pay to the insurance commission an amount equal to the 
actual expenses o f  the insurance commission in tlie conduct of the examination: 
-- 
3 I 
Provida!, further, that the general lau. on insurance and the rules and regulations 
11 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
promulgated thereunder shall have suppletory application insofar as it is not in conflict 
with this Act and its rules and regulations. 
SEC. 28. Implementing RUICS and Regrrlntions. The implementing rules and 
regulations to efkctively carry out the provisions of this Act shall be adopted by and 
promulgated by the Board of Trustees of the Pag-IBIG Fund not later than ninety (90) 
days after the approval of this Act which shall be published in at least two (2) national 
newspapers of general circulation. 
SEC. 29. Separability Clause. If for m y  reason, any provision of this Act, or the 
application thereol' to any person or circumstances, is held invalid or unconstitutional, the 
reniaining provisions not affected thereby shall continue to be in full force and effect. 
SEC. 30. Repealirtg Clause. Presidential Decree No. 1752, as amended by 
Executive Order Nos. 35 and 90 and Republic Act No. 7742, are hereby repealed. All 
other laws, decrees, executive orders, or ruled and regulations, or parts thereof, 
inconsistent with or contrary to the provisions of this Act or its purposes are hereby 
atiiended or modified accordingly. 
SEC. 31. Effectivity. This Act shall take effect fifteen (15) days after the 
completion of its publication in the official gazette or in at least two (2) national 
newspapers of general circulation. 
Approved, 
12