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The Home Development Mutual Fund

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Autor:   •  March 16, 2011  •  Research Paper  •  9,425 Words (38 Pages)  •  3,967 Views

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The Home Development Mutual Fund (HDMF) was created on June 11,1978 by virtue of Presidential Decree No. 1530. Primarily, the Fund was created to address two of the nation's basic concerns: generation of savings and provision of shelter for the workers. Under PD 1530, two agencies administered the Fund. The Social Security Systems (SSS) handled the funds of private employees while Government Service Insurance System (GSIS) handled the funds of government workers.

On March 1, 1979, Executive Order No. 527 took effect, transferring the administration of the Fund to the National Home Mortgage Finance Corporation (NHMFC). The NHMFC is one of the operating agencies of the then Ministry of Human Settlements.

To further strengthen the stability and viability of the two funds, Executive Order No.538 was issued on June 4, 1979 merging the two funds into what is now known as the Pag-IBIG Fund.

On December 14, 1980, Presidential Decree 1530 was amended by PD 1752, making the Pag-IBIG Fund a corporation independent from the NHMFC. The Fund's rule-making power was vested in the Board of Trustees. PD 1752 likewise made Pag-IBIG membership mandatory for all SSS and GSIS member-employees.

Months after the assumption to power of former President Corazon C. Aquino, Pag-IBIG contributions were suspended from May to July 1986. However, on August 1, 1986, Pres. Aquino "directed" the resumption of Pag-IBIG membership under Executive Order No. 35. Membership was still on a mandatory basis but under more liberal terms. For one, contribution rate was reduced from three percent to one percent for employees earning over P1, 500. Employer share was likewise cut from three percent to a fixed rate of two percent. The Maximum Fund Salary was raised from P 3,000 to P 5,000.

January 1, 1987 marked the return of the Pag-IBIG Fund to a voluntary program under Executive Order No. 90. The next eight years witnessed the growth of the Pag-IBIG Fund as a voluntary Fund.

On June 17, 1994, President Fidel V. Ramos signed Republic Act 7742, which reverts the nature of Pag-IBIG membership to mandatory. The new Law became effective on January 1, 1995.

Pag-IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno. In effect, Pag-IBIG harnesses these four sectors of our society to provide its members with adequate housing through as effective savings scheme.



Hon. Vice-President Noli De Castro


Housing and Urban Development Coordinating Council

Hon. U/Sec. Roberto Tan


Representing Sec. Margarito B. Teves

Department of Finance

Hon. U/Sec. Mario L. Relampagos

Rep. Sec. Romulo L. Neri

Dept. of Budget & Management Hon. Zorayda Amelia C. Alonzo

Rep. Sec. Peter B. Favila

Dept. of Trade & Industry Hon. Romero FS. Quimbo


Home Development Mutual Fund Hon. U/Sec. Manuel G. Imson

Rep. Sec. Patricia A.

Sto. Tomas

Dept. of Labor & Employment

Hon. Alexander Hilario G. Aguilar

Private Employees Representative Hon. Jose Luis L. Vera

Private Employees Representative Hon. Rosemarie Adjawie

Gov't. Employees Representative

Hon. Teresita M. Alegre

Private Employers Representative Hon. Lili B. Ramirez

Private Employers Representative



With the signing of Republic Act No. 7742 all SSS and GSIS members earning P4,000 and above monthly are mandatory covered by Pag-IBIG fund.


Membership to the fund is also open to:

* Private and government workers earning less than P 4,000 a month but who wish to join anyway;

* Self-Employed workers such as professionals and businessmen;

* Overseas contract workers (OCW);

* Residents and immigrants in the United Staes and Canada;

* Informal income group such as cooperative members;

* Non-working spouses.


For employees with monthly compensation (Basic+COLA) of P1,500 and less, an amount equivalent to one percent (1%) of their monthly compensation, and two percent (2%) of the monthly compensation of employees earning over P1,500.

2. Over P1,500 , an amount equivalent to two percent (2%) of the monthly compensation of each covered employee.

Employers are mandated to match their employees' monthly contributions with an amount equivalent to two percent (2%) of the monthly compensation of each covered employee. For self-employed members, monthly contribution is equivalent to two percent(2%) of their monthly gross earnings.

Under the Pag-IBIG Overseas Program (POP) ,OFWs with monthly compensation of:

* US $1,000 or less shall contribute US$20 or its peso equivalent monthly.

* Over US $1,000 , monthly contribution of US $40 or its peso equivalent.

* C$1,500 or less, monthly contribution


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