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Fiscal break for housing loans approved

Vol. XXII, No. 3 [ BusinessWorld Online ]
Wednesday, July 30, 2008 | MANILA, PHILIPPINES

New corporate body to manage provident fund

THE HOUSE committee on ways and means yesterday approved a consolidated bill that will exempt from taxes contributions to the Pag-IBIG housing loan program.

The committee will propose for plenary approval the creation of Pag-IBIG Fund as a corporate body that will replace the Home Development Mutual Fund (HDMF) that manages the program. HDMF was created by Presidential Decree 1752.

Pag-IBIG Fund will supervise a mutual provident savings system for private and government employees and other earning groups, and matched by mandatory contributions of employers with housing as primary investment.

The coverage will be mandatory for all employees covered by the Social Security System, Government Service Insurance System, members of the Armed Forces of the Philippines and the Philippine National Police, as well as overseas Filipino workers.

Coverage may also be extended to other working groups with or without employer contributors, the bill states.

Provident fund membership will be for period of 20 years, provided that the member has contributed a total of 240 monthly contributions upon maturity.

Covered employees and employers will contribute to the fund based on the monthly compensation as follows: employees earning not more than P1,500 per month, 1%; and earning more than P1,500 per month, 2%. All employers will contribute 2% of the monthly compensation. The maximum monthly compensation shall not be more than P5,000.

The bill further states that the funds and all its assets and properties, all contributions collected and all accruals and income or investment earnings, will be exempt from any tax, assessment, fee, charge, customs or import duties.

All benefit payments will be exempt from taxes, fees or charges and will not be liable to attachments, garnishments, levy or seizure by or under any legal or equitable process, either before or after receipt of the beneficiary.

The committee report is a consolidated version of House Bills 410, 1097, 2922, filed by ParaƱaque Rep. Eduardo C. Zialcita (1st district), Northern Samar Rep. Emil L. Ong (2nd district) and Oriental Mindoro Rep. Rodolfo G. Valencia (1st district), respectively.

Meanwhile, over 2,000 urban poor families in Calbayog City, Leyte province have been relocated and provided their own homes under the local government’s urban planning program.

For as low as P1.50 per day, Calbayog City Mayor Mel Senen Sarmiento said the informal urban settlers in the city can acquire a house and lot.

He said the number of informal settlers in the city went down to 4,000 this year from 6,265 in 2002.

Since 2006, he said the city government has awarded 2,000 security of tenure certificates to families who once lived at the risk of being swept out to sea or being washed away by floods. — ETM and SQM

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