The Home Development Mutual Fund Law of 1980

PRESIDENTIAL DECREE NO. 1752as amended by RA No. 7742

HISTORY AND OBJECTIVE

The Home Development and Mutual Fund (HDMF) Law or Presidential Decree No. 1530
was enacted on 11 June 1978, creating a voluntary provident fund primarily for savings
generation and mobilization, as well as for financing decent and affordable housing to Filipino
workers.

The SSS and GSIS initially administered the provident fund scheme for their respective
members. In 1979, fund administration was transferred to the National Home Mortgage Finance
Corporation (NHMFC) through Executive Order No. 527. In the same year, E.O. 538 was
issued to merge the funds administered by the SSS and GSIS into what is now known as the
Pag‐IBIG1 Fund.

Membership to the Pag‐IBIG Fund became compulsory on 1 July 1981 under P.D. 1752
of 1980, making the HDMF a corporation independent of the NHMFC. It reverted to a voluntary
program in 1987 by virtue of E.O. 90.

On 17 June 1994, Republic Act No. 7742, or the Pag‐IBIG Universal Coverage Law, was
signed, thus amending P.D. 1530 and 1752. The new law brought back the mandatory nature
of the scheme effective 1 January 1995.

CORPORATE POWERS

1. Make policies and guidelines, as well as adopt, amend rescind rules/regulations

necessary to carry out the provisions and purpose of the law.
2. Submit annually to the President of the Philippines not later than March 15, a public
report with regard to the implementation of the HDMF Law
3. Invest its funds, directly or indirectly in accordance with the HDMF Law
4. Acquire, utilize or dispose of, in any manner real or personal properties to carry out the
purposes of the law
5. Set up its own accounting and computer systems and make studies and surveys
6. Have Power of Succession; sue and be sued and use a corporate seal
7. Enter into and carry out contracts of every kind and description with any person, firm or
association or corportation, domestic or foreign
8. Borrow funds from any source, private or gov’t, foreign or domestic
9. Invest, own or participate in equity in any establishment, firm or entity; to form, organize
or establish subsidiaries
10. Exercise such powers and perform such acts as may be necessary to carry out the
provisions of the law
COVERAGE

Pag‐IBIG membership is mandatory for all SSS and GSIS members with monthly
earnings of at least P4,000. Voluntary coverage is also open to workers, including self‐
employed persons, and informal workers who earn less than P4,000 a month.

It is also extended on a voluntary basis to overseas Filipino workers, resident

immigrants and naturalized citizens under the Pag‐IBIG Overseas Program. Non‐earning
spouses of Pag‐IBIG members may also register voluntarily.

CONTRIBUTIONS

Contribution is pegged at 1% of the member’s monthly compensation (MC) for those

earning less than P1,500 a month and at 2% of MC for those with P1,500 or more.

Employers are mandated to contribute an additional 2% of the MC of each covered

employee.

The contribution rate is applied up to an MC ceiling of P5,000. Thus, the maximum

combined contribution is P400 per month.

* Employee-members may opt to increase their contributions accordingly, on a voluntary basis.

Voluntary members may opt to pay for the employer counterpart.

REMITTANCE BY EMPLOYER

Failure to remit contributions will subject the employer to a 3% penalty per month.

* Self‐employed members are required to pay their contributions directly to the HDMF.

MEMBERSHIP TERM

SEC. 6. Membership Term. —

Membership in the Fund shall be for a period of twenty (20) years, except when earlier
terminated by reason of retirement, disability, insanity, death, departure from the country or
other causes as may be provided for by the Board of Trustees. Resignation, lay-off or
suspension from employment may not necessarily constitute a ground for membership
termination, except for suspension of contributions.

When may there be withdrawal of contributions?

If a member has no outstanding loans, he may withdraw the accumulated value of their
contributions after the 10th or 15th year of continuous contributions.

HOUSING FEATURES

SEC. 9. Housing Features. —

A member of good standing shall be eligible to apply for a housing loan, with such terms
as may be authorized by the Board of Trustees, taking into account ability to pay.

(See case: CHINA BANKING CORPORATION vs. THE MEMBERS OF THE BOARD OF
TRUSTEES AND THE HDMF; and ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE
LOS ANGELES vs. HDMF)

SUBSTITUTE RETIREMENT PLAN

SEC. 21. Substitute Retirement Plan. —

A private employer shall have the option to treat the coverage by the Fund as a
retirement plan for the employee concerned, within the purview of the Revised Labor Code of
the Philippines, subject, however, to any existing collective bargaining agreement on the matter

PENAL PROVISIONS

SEC. 23. Penal Provisions.

Refusal or failure to register its employees, collect and remit employee contributions as
well as employer counterparts, or the correct amount due, will subject the employer to:

a. fine of not less than, but more than twice the amount involved; or

b. imprisonment of not more than 6 years; or

c. both fine and imprisonment, in the discretion of the court

THE NATIONAL HEALTH INSURANCE ACT OF 1995
REPUBLIC ACT NO. 7875 as amended by REPUBLIC ACT NO. 9241

BASIS AND OBJECTIVE

Section 11, Article XIII of the 1987 Constitution

The State shall adopt an integrated and comprehensive approach to health development
which shall endeavor to make essential goods, health and other social services available to all
the people at affordable cost. There shall be priority for the needs of the under-privileged sick,
elderly, disabled, women, and children. The State shall endeavor to provide free medical care to
paupers.

As a SOCIAL INSURANCE, the Health Insurance Program is prohibited from:

1. Providing direct health care

2. Owning or investing in health care facilities
3. Buying and Dispensing drugs and pharmaceuticals
4. Employing physicians and other professionals for the purpose of directly
rendering care

POLICIES FOR ENROLLMENT OF BENEFICIARIES

Persons Eligible for benefits under:

1. Medicare Program I, including SSS and GSIS members, retirees, pensioners and
their dependents are automatically enrolled
2. Local Health Insurance plans established by PhilHealth Insurance are deemed
enrolled
3. Health insurance plans as part of Program II of Medicare, inluding indigent members
shall be enrolled
4. Government initiated health insurance programs, community based health care
organizations, cooperatives should be enrolled
5. Private non-profit health insurance plans should be enrolled.
REQUIREMENTS FOR ENROLLMENT AS BENEFICIARY

Philhealth Membership Registration Form, with any of the following:

1. Birth Certificate

2. GSIS/SSS member’s ID

3. Passport

4. Any other valid ID/document acceptable to Philippine Health Insurance

Corporation