- Amended Guidelines on the Pag-IBIG Fund Multi-Purpose Loan (MPL) Program
- HDMF Circular No. 350-14
November 5, 2014
HDMF CIRCULAR NO. 350-14
|SUBJECT||:||Amended Guidelines on the Pag-IBIG Fund Multi-Purpose Loan (MPL) Program|
Pursuant to Item XVI of DaHISE
I. Loan Purpose
To provide financial assistance to Pag-IBIG Fund member for:
1. Minor Home Improvement;
2. Livelihood/Additional Capital in Small Business;
3. Home enhancement, i.e., purchase of appliance and furniture;
4. Payment of Utility/Credit Card Bills;
6. Special Events;
7. Car Repairs; or
8. Other purposes.
II. Definition of Terms
For the purpose of implementing this program, the following terms shall be defined as follows:
1. Active Member shall refer to a member with monthly mandatory savings within the last six (6) months.
2. Desired Loan Amount shall refer to the amount indicated in the loan application form.
3. Monthly Amortization refers to the installment amount to be paid by the borrower which shall cover the principal and interest.
4. Other Authorized Deductions may refer to Authorized Deductions under the General Appropriations Act on which it shall include deductions from salaries, emoluments or other benefits accruing to any government employee.
5. Other Obligations shall include any money owed to Pag-IBIG Fund and/or another entity. DACTSa
6. Short-Term Loan (STL) shall refer to the loan programs offered by the Fund such as but not limited to: Multi-Purpose Loan (MPL) and Calamity Loan.
7. Total Accumulated Value (TAV) shall refer to the sum of the monthly mandatory savings, which includes upgraded MS, if any, and employer's counterpart, when appropriate, and the corresponding dividends credited thereto.
8. TAV Offsetting shall refer to the process of deducting from the member's TAV the outstanding MPL balances.
9. Total Savings shall refer to the sum of the monthly mandatory savings, which includes upgraded MS, if any, and the employer's counterpart.
III. Borrower's Eligibility
The program shall be open to a Pag-IBIG Fund member who satisfies the following requirements:
1. Has made at least twenty four (24) monthly mandatory savings (MS);
1.1 A member, whose MS are still short of the required number of MS, may be allowed to apply for an MPL, provided his total savings is at least equivalent to 24 MS based on the mandatory rate inclusive of employee share and employer counterpart.
2. Has five (5) MS for the last six (6) months as of month prior to date of loan application;
3. If with existing Pag-IBIG Fund Housing Loan, the account must not be in default as of date of application; and
4. If with existing MPL and/or Calamity Loan, the account/s must not be in default as of date of application.
IV. Loan Amount
A qualified Pag-IBIG Fund member shall be allowed to borrow an amount based on the lowest of the following:
1. Loan Entitlement
1.1 Equivalent to eighty percent (80%) of TAV.
1.2 However, if the borrower has an existing Calamity Loan, the loanable amount shall be the difference between the eighty percent (80%) of the borrower's TAV and the outstanding balance of his Calamity Loan.
2. Capacity to Pay
The loanable amount shall be limited to an amount which will not render the borrower's Net Take Home Pay (NTHP) to fall below the minimum requirement as prescribed by the General Appropriations Act (GAA) or company policy, whichever is applicable.
Accordingly, the borrower's NTHP shall refer to the member's monthly compensation net of statutory deductions, monthly repayment of monthly amortizations for loan applied for, other authorized deductions (e.g., other obligations). Statutory deductions, on the other hand, shall refer to income tax withheld as well as contributions/premiums for GSIS/SSS, Pag-IBIG Fund and PhilHealth.
3. Desired Loan Amount
V. Interest Rate
The loan shall bear an interest at the nominal rate of 10.50% (equivalent interest rate of 17.50% based on diminishing principal balance) per annum, with interest during the grace period and shall be amortized equally over the term of the loan. TEHIaD
VI. Loan Term
The loan shall be repaid over a maximum period of twenty-four (24) months with a grace period of two (2) months.
VII. Loan Release
The loan proceeds shall be released through any of the following modes:
1. Crediting to the borrower's disbursement card;
2. Crediting to the borrower's bank account through LANDBANK's Payroll Credit Systems Validation (PACSVAL); or
3. Other acceptable modes of disbursement.
VIII. Loan Payments
1. The loan shall be repaid in equal monthly payments in such amounts as may fully cover the principal and interest over the loan period. Said amortization shall be made, whenever feasible, through salary deduction.
1.1 For self-employed individuals, Overseas Filipino Workers (OFWs), or other types of individual payors, monthly payments shall be paid over-the-counter or any other modes of payment approved by the Fund.
2. Payments shall be remitted to the Fund on or before the fifteenth (15th) day of each month, starting on the third (3rd) month following the date on the DV/Check or manual disbursement voucher. However, if the due date falls on a non-working day, the monthly amortization shall be paid on the first working day following the due date.
3. The borrower may fully pay the outstanding balance of the loan prior to loan maturity.
4. The borrower shall pay directly to the Fund in case the borrower is unable to pay through salary deduction for any of the following circumstances:
4.1 Suspension from work;
4.2 Leave of absence without pay;
4.3 Insufficiency of take home pay at any time during the term of the loan; or
4.4 Other circumstances analogous to the foregoing.
1. A penalty of one-twentieth of one percent (1/20 of 1%) of any unpaid amount shall be charged to the borrower for every day of delay.
2. For borrowers paying through salary deduction, penalties shall only be reversed upon presentation of proof that non-payment was due to the fault of the employer. In such case, penalties due from the borrower shall be charged to the employer.
Non-remittance of the total loan amortization shall likewise subject the employer with a penalty of one-tenth of one percent (1/10 of 1%) per day of delay of the amounts payable from the date the loan amortizations or payments fall due until paid.
X. Application of Payments
1. Payments shall be applied according to the following order of priorities:
1.1 Penalties (if any);
1.2 Interest; and
2. Any amount in excess of the required monthly amortization shall be applied to succeeding amortizations which will be posted on the next due date. TIaDHE
The borrower shall be in default in any of the following cases:
1. Any willful misrepresentation made by the borrower in any of the documents executed in relation hereto;
2. Failure of the borrower to pay any three (3) consecutive monthly amortizations;
3. Failure of the borrower to pay any three (3) consecutive MS;
4. Default in an outstanding Pag-IBIG Calamity Loan; or
5. Violation by the borrower of any of the policies, rules, regulations and guidelines of Pag-IBIG Fund.
XII. Effects of Default
In the event of default, the outstanding loan obligation shall become due and demandable. As a consequence thereof, the outstanding loan obligation consisting of the principal, interest, and penalties shall be subjected to offsetting against the borrower's TAV after exerting all collection efforts.
Collection efforts shall include, but not limited to:
1. Collection Notice, which shall be sent through registered mail, e-mail or through Fund Coordinator;
2. SMS (Short Message Service);
3. Tele-Calling; and
4. Other mode of collection efforts approved by the Fund in the future.
XIII. Other Provisions
1. The MPL and/or Calamity Loan shall be treated as separate and distinct from each other. Hence, the member shall be allowed to avail of MPL while he still has an outstanding Calamity Loan, and vice versa. Application for loans on these programs shall be governed by their corresponding guidelines.
The outstanding loan balance of the Calamity Loan shall not be deducted from the proceeds of the MPL.
2. In no case, however, shall the aggregate STL exceed eighty percent (80%) of the borrower's TAV.
3. Membership Termination
In the event of membership termination prior to loan maturity, the outstanding loan obligation shall be deducted from the borrower's TAV and/or any amount due him or his beneficiaries in the possession of the Fund.
In case of borrower's death, the outstanding obligation shall be computed up to the date of death. Any payments received after death shall be refunded to the borrower's beneficiaries.
4. Multiple Employers
4.1 An eligible member under more than one employer shall have only one outstanding MPL at any given time.
4.2 At point of application, the member shall choose which employer shall deduct and remit his monthly MPL amortizations.
4.3 However, in the absence of the Provident Fund Management System (PFMS), a member who is an active member under more than one employer may apply for separate MPL simultaneously. Each application shall be filed with the branch to which each of his employers remits his MS.
5. Loan Renewal
5.1 A borrower may renew his MPL:
5.1.1 After payment of equivalent to six (6) monthly amortizations;
5.1.2 Not earlier than sixth (6th) monthly amortization due date; and
5.1.3 Provided that he meets the eligibility in these guidelines.
5.2 The proceeds of the new loan shall be applied to the borrower's outstanding MPL obligation and the net proceeds shall then be released to him.
5.3 In case of full payment prior to loan maturity, a borrower shall be allowed to apply for a new loan anytime thereafter.
6. Immediate Offsetting against the Borrower's TAV
Offsetting of the borrower's outstanding MPL obligation against his TAV shall be effected immediately upon approval of the borrower's request; provided, such request is based on any of the following justifiable reasons and has been verified by the Fund:
6.1 Borrower's unemployment;
6.2 Illness of the member-borrower or any of his immediate family members as certified by a licensed physician that, by reason thereof, resulted in his failure to pay the required amortizations when due;
6.3 Death of any of his immediate family members that, by reason thereof, resulted in his failure to pay the required amortizations when due.
7. Availment of MPL after TAV Offsetting
If TAV offsetting has been effected on the borrower's defaulting MPL, he may apply for a new MPL subject to the following conditions:
7.1 If the borrower has paid at least the equivalent of six (6) monthly amortizations prior to default and its consequent offsetting against the borrower's TAV, the borrower may immediately apply for a new loan, subject to the eligibility criteria provided in these guidelines. CDaTAI
7.2 If the borrower has paid less than the equivalent of six (6) monthly amortizations prior to default and its consequent offsetting against the borrower's TAV, the borrower may apply for a new loan only after two (2) years from date of TAV offsetting, subject to the eligibility criteria provided in these guidelines.
XIV. Transitory Provision
All borrowers with outstanding MPL as of date of effectivity of these guidelines, regardless of the number of amortization payments already made, shall be allowed to apply for the MPL under these guidelines, provided, the outstanding loan is not in default, provided further, that the outstanding obligation shall be deducted from the proceeds of the new loan.
XV. Escalation of Issues
Any issue that may arise in the interpretation of these guidelines shall, as much as possible, be resolved by the concerned officer. Matters that are not thereby satisfactorily resolved shall be escalated to the next higher level of authority.
XVI. Repealing Clause
The Senior Management Committee may amend, modify, revise and/or update the guidelines as needed; provided, the amendments, modifications, revisions and updates thereof, are in furtherance of the objectives of this Program and consistent with the mandate of the Fund under its charter and existing laws.
These guidelines shall take effect immediately.
Makati City. November 5, 2014.
(SGD.) ATTY. DARLENE MARIE B. BERBERABE
Chief Executive Officer
Home Development Mutual Fund