Labor group Trade Union Congress in the Philippines (TUCP) said it is supporting the Home Development Mutual Fund’s (HDMF) or Pag-IBIG Fund plan to increase the minimum member contribution so that it can provide bigger cash and house loans for its members.
TUCP president Raymond Mendoza said the move will enable the state-owned savings program to afford the growing numbers of workers, who borrow additional cash on hand through its short-term and housing loan facilities, to cope with the rising cost of living and shortage of decent housing.
“In order to accommodate more cash and home loans applications without compromising the fund, the TUCP is open to the Pag-IBIG plan to adjust the maximum salary cap from the present PHP5,000 to PHP15,000 which will translate to a monthly savings rate of PHP300 for the employee and PHP300 for the employer,” Mendoza said.
HDMF, recently announced its plan to increase its minimum member contribution rate from PHP100 to PHP150 by 2021 to address the financing gap between member savings and home loan take-outs.
In an earlier report, Pag-IBI Fund CEO Acmad Rizaldy Moti said the financing gap is currently at PHP25 billion, coming from the PHP40.27 billion-member savings and PHP75.31 billion home loan takeout recorded for 2018.
Moti added that Pag-IBIG Fund officials are still reviewing the move, taking into consideration the openness of members to an increase.
However, Mendoza clarified that the adjustment should be in three portions payable in three to five years.
“To cushion the workers and employers from effects of additional deductions of other social security agencies,” Mendoza added.
TUCP spokesperson Alan Tanjusay said the suggested increase to Pag-IBIG members seeking short-term cash loan facilities such as Pag-IBIG multi-purpose loans means workers and their families are struggling to cope with rising inflation.
“Workers who are helping the economy grow are feeling the pinch of a growing economy. These are in a way smoke signals telling the government that policies on current wages are not enough and existing benefits are no longer sufficient,” Tanjusay said. (PNA)