Senate okay expected on Monday session
STRENGTHENING OF PAG-IBIG FUND LAW ON FULL SWING - ANGARA

Senator Edgardo J. Angara today announced that he expects Senate to approve on third reading sponsoring one of the twin efforts in hurdling the Global Financial Crisis, the strengthening of the Home Development Mutual Fund or the Pag-IBIG Fund.

Senate Bill 2971 or the Pag-IBIG Fund Law of 2008 has been recommended and calendared for plenary approval on Monday, January 26, 2009.

"In these times of financial difficulties, by providing a boost to the Pag-IBIG Fund, not only do we help Filipinos better plan and provide for their housing needs, we also reap other economic benefits that go with a strong housing sector. The housing sector plays an important role in providing jobs. From the data provided by the so-called shelter agencies alone, an additional 607,003 jobs are expected to be created this 2009. Remember that for every housing unit, at least eight jobs are created," said Angara who chairs the Senate Committee on Banks, Financial Institutions and Currencies.

He added, "These domestic employment opportunities, whether from housing construction, public works, mining, micro-finance, small-and-medium enterprises, agriculture, tourism, etc., will serve our people well in the coming year, when working abroad will start losing its luster, and outsourcing jobs we currently rely on will slowly shrink."

Under said act amending Presidential Decree 1752, otherwise known as the Home Development Mutual Fund Law of 1980, three features of the new Pag-Ibig charter will prove key to strengthening the Home Development Mutual Fund or the Pag-IBIG Fund, an integrated nationwide provident savings system established to address the housing needs of the employed and other earning groups.

The key features are the restoration of tax exemption privilege of the Pag-IBIG Fund (under Republic Act 7742, the fund was exempted from all kind of taxes but the exemption was lifted under Executive Order 93 signed by President Corazon C. Aquino in 1987); granting of power to the PAG-IBIG Board of Trustees, to set contribution rates; and adoption of a compensation plan for employees comparable to those prevailing in the private sector.

For the past seven years, Pag-IBIG has been receiving tax subsidy from the Department of Finance. This tax subsidy has helped the Pag-IBIG fulfill its mandate of addressing the issue of lack of shelter, by rechanneling the funds that were supposed to answer for taxes to the much-needed housing programs.

"In restoring the fund's exemption from taxes, the Pag-IBIG Fund Law of 2008 recognizes exactly this point-that Pag-IBIG should experience tax break precisely because these tax payments are better off addressing the shelter shortage. Even the Department of Finance admitted that tax exemption would enhance the housing agency's capability to declare Pag-IBIG members' dividends. The exemption will allow Pag-IBIG to keep P3 billion that it may lend, enabling borrowers to acquire 40,000 more housing units," said Angara.

The Pag-IBIG Fund Law, as a major financial reform, is one of the twin measures the Senate is trying to institute in response to the global economic slowdown, the other reform being the initiative to increase the deposit insurance coverage of the Philippine Deposit Insurance Corporation (PDIC).