REPUBLIC ACT NO.

9679

AN ACT FURTHER STRENGTHENING THE HOME DEVELOPMENT MUTUAL

FUND, AND FOR OTHER PURPOSES

What is the summary of the law?

Republic Act No. 9679 is known as the “Home Development Mutual Fund Law of 2009”,
otherwise known as PAG-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya at
Gobyerno) Fund” was approved on July 21, 2009.

The Fund is deemed private in character, owned wholly by the members, administered in
trust and applied exclusively for their benefit. All the personal and employer contributions shall
be fully credited to each member, accounted for individually and transferable in case of change
of employment. They shall earn dividends as may be provided for in the implementing rules. The
said amounts shall constitute the provident fund of each member, to be paid to him, his estate or
beneficiaries upon termination of membership, or from which peripheral benefits for the member
may be drawn (Sec. 10, RA 9679). It is created under this Act is a government financial
institution involved in mobilizing provident funds primarily for shelter finance (Sec. 4, RA 9679).
This is constituted as a body corporate, with principal office in Metro Manila, and shall replace
the Home Development Mutual Fund established under Presidential Decree No. 1752 (Sec. 5,
RA 9679).

What is the Policy and Purpose of the Law?

The said law was established in pursuit of the policy of the State to establish, develop,
promote, and integrate a nationwide sound and viable tax-exempt mutual provident savings
system suitable to the needs of the employed and other earning groups, and to motivate them to
better plan and provide for their housing needs, by membership in the Home Development
Mutual Fund, with mandatory contributory support of the employers in the spirit of social justice
and the pursuit of national development. (Sec. 2, RA 9679).

What are the objectives of the law? (Sec. 2, Rule II, IRR of RA 9679)

As having established such end, the following are the State’s objectives in the constitution of RA
9679:
 a. Improve the quality of life of its members by developing and promoting an integrated
nationwide, sound, and viable tax-exempt mutual provident savings system suitable to the
needs of the employed and other earning groups;

b. Improve the quality of life of its members by promoting home ownership through the
extension of affordable housing loans;

c. Stimulate and assist the shelter industry through the extension of developmental and
institutional financing;

d. Invest the provident savings of its members taking into consideration profitability and safety
of the funds as a means of providing them provident benefits upon termination of their
membership in the Fund;

e. Provide small and short term loans, other benefits and assistance programs to its members,
consistent with the Fund’s provident character; and

f. Design and implement other programs that shall further promote and mobilize savings and
provide additional resources for the mutual benefit of its members with appropriate returns on
the savings and investments.

Who is covered by the law?

Mandatory Coverage and Membership of Employees (Sec. 1, Rule V, IRR of RA 9679)

Coverage under and membership in the Fund shall be mandatory for the following:

a. All employees who are compulsorily covered by the SSS; Provided, that for purposes of
mandatory coverage in the Fund of persons who are compulsorily covered by the SSS, the term
employee shall be understood the manner by which the SSS defines it, and shall include, but not
limited to:

1. A Private employee, whether permanent, temporary or provisional, who is not over 60 years
old.

2. A household-helper earning at least P1,000 a month. A household-helper is any person who

renders domestic services exclusively to a household such as driver, gardener, cook, governess,
and other similar occupations.

3. A Filipino seafarer upon the signing of the standard contract of employment between the
seafarer and the manning agency which, together with the foreign shipowner, act as employers.

4. A self-employed person, regardless of trade, business or occupation, with an income of at least

P1,000 a month and not over 60 years old. This includes, but not limited to; self-employed
professionals; business partners, single proprietors and board directors; actors, actresses,
directors, scriptwriters and news reporters who are not under an employer-employee relationship;
professional athletes, coaches, trainers and jockeys; farmers and fisherfolks; and workers in the
informal sector such as cigarette vendors, watch-your-car boys, among others. Provided, that a
self-employed person subject to compulsory coverage by the SSS shall be treated by the Fund as
both employee and employer at the same time, and shall therefore be required to pay both the
employee and the corresponding employer contributions.

Provided finally, that actual membership in the SSS shall not be a condition precedent for
mandatory coverage in the Fund, it being sufficient that the person ought to be covered
compulsorily by the SSS.

b. All employees who are subject to mandatory coverage by the GSIS, regardless of their
employment status.

c. Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, the
Bureau of Jail Management and Penology, and the Philippine National Police.

d. Filipinos employed by foreign-based employers. Coverage under the Fund shall be mandatory
for Filipinos employed by foreign-based employers whether deployed here or abroad, or a
combination thereof, but whose respective employers are exclusively based outside of the
Philippines. The employers shall not be subject to mandatory coverage. Provided, that if the
employer maintains an office or agent in the Philippines that effectively acts as an employer of
the Filipino, then such office or agent shall be deemed an employer subject of mandatory
coverage under R.A. 9679.

Mandatory Coverage of Employers (Sec. 2, Rule V, IRR of RA 9679)

Coverage under the Fund shall be mandatory for the following:

a. Employers of employees compulsorily covered by the SSS. These shall include private
employers previously granted waiver or suspension of coverage for whatever reason under
Presidential Decree 1752, as amended. Provided, that manning agencies together with the foreign
ship owners shall be considered jointly and severally as the employers of Filipino Seafarers.
Provided finally, that a self-employed person subject to compulsory coverage by the SSS shall be
treated by the Fund as both employee and employer at the same time.

b. Employers of employees subject of mandatory coverage by the GSIS.

c.The Armed Forces of the Philippines, the Bureau of Fire Protection, the Bureau of Jail
Management and Penology, and the Philippine National Police.

Voluntary Coverage (Sec. 3, Rule V, IRR of RA 9679)

Persons who are at least eighteen (18) years old but not more than sixty five (65) years
old and are not subject to mandatory coverage may be covered by the Fund on a voluntary basis,
subject to such terms and conditions stated in these Rules or as the Board may impose, and shall
include, but not limited to, the following:

a. Spouses who devote full time to managing the household and family affairs, unless they also
engage in another vocation or employment which is subject to mandatory coverage.

b. Filipino employees of foreign government or international organization, or their wholly-

owned instrumentality based in the Philippines, in the absence of an administrative agreement
with the Fund.

c. Employees of an employer who is granted a waiver or suspension of coverage by the Fund

under R.A. 9679.

d. Leaders and members of religious groups;

e. A member separated from employment, local or abroad, or ceased to be self-employed, but

would like to continue paying his or her personal contribution. Such member may be a
pensioner, investor, or any other individual with passive income or allowances.

f. Public officials or employees who are not covered by the GSIS, such as Barangay Officials,
including Barangay Chairmen, Barangay Council Members, Chairmen of Sangguniang
Kabataan, and Barangay Secretaries and Treasurers.

g. Such other earning groups as may be determined by the Board by rules and regulations.

Provided, that any foreign government, international organization or their wholly-owned

instrumentality employing workers in the Philippines or employing Filipinos outside of the
Philippines, may enter into an agreement with the Fund for the inclusion of their employees as
members of the Fund; Provided, further, that the terms of such agreement shall conform with the
provisions of R.A. 9679 and these Rules on coverage and amount of payment of contributions
and benefits; Provided, finally, that the provisions of the said Act shall be supplementary to any
such agreement.

What benefits are afforded by the law?

Mandatory Contributory Support of the Employer

The member’s contribution to the Fund shall be with the mandatory contributory support
of the employer as provided for under these Rules or as may be provided for by the Board.
Notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly,
from the compensation of its employees covered by the Fund, or otherwise recover from them,
the employer’s contribution with respect to such employees (Sec. 1, Rule IX, IRR of RA 9679)

Acts of the Employer shall not prejudice the member

 Failure or refusal of the employer to pay or to remit the contributions herein prescribed,
or as may be provided for by the Board, shall not prejudice the right of the covered employee to
the benefits under R.A. 9679 and these Rules (Sec. 2, Rule IX, IRR of RA 9679).

Exemption from Tax, Legal Process and Lien

All laws to the contrary notwithstanding, all contributions collected and all accruals
thereto and income or investment earnings therefrom, shall be exempt from any tax, assessment,
fee, charge, or customs or import duty; and all benefit payments made by the Fund shall likewise
be exempt from all kinds of taxes, fees or charges, and shall not be liable to attachments,
garnishments, levy or seizure by or under any legal or equitable process whatsoever, either
before or after receipt by the person or persons entitled thereto, except to pay any debt of the
member to the Fund (Sec. 3, Rule IX, IRR of RA 9679).

Dividends

The Board shall set aside annually an amount which in no case shall be less than seventy
percent (70%) of the annual net income of the Fund, to be paid in the form of dividends to
members. The member’s contributions, inclusive of employee’s and employer’s contributions,
shall earn dividends which shall be distributed annually and credited to his or her TAV. Only
members with outstanding TAV as of year-end shall be entitled to dividends declared for that
particular year. All dividend earnings shall be tax-free (Sec. 4, Rule IX, IRR of RA 9679).

Return of Contributions

A member shall be entitled to receive his Total Accumulated Value upon termination of
membership in accordance with Section 9 of Rule V of these Rules, less any and all pending
obligations with the Fund. In the event of death, the member’s heirs shall likewise receive the
same less any and all pending obligations with the Fund (Sec. 5, Rule IX, IRR of RA 9679).

Housing Features

A member of good standing shall be eligible to apply for housing loans, under such terms
and conditions as may be authorized by the Board, taking into account ability to pay. The Board
of Trustees shall institute policies to ensure that lower-income members obtain such housing
loans (Sec. 6, Rule IX, IRR of RA 9679).

Benefit Programs

A member may avail of the Fund’s various short term loans and other benefit programs,
provided that he or she satisfies the eligibility requirements set by the Board (Sec. 7, Rule IX,
IRR of RA 9679).

Portability of Membership
 A member who transfers to another employer or who becomes self-employed carries with
him his Total Accumulated Value (Sec. 8, Rule IX, IRR of RA 9679).

Optional Withdrawal of Contributions

Those who become members of the Fund after the effectivity of R.A. 9679 shall have the
option to withdraw his or her Total Accumulated Value on the fifteenth (15th) year of continuous
membership. Provided, that said member has no outstanding housing loan with the Fund at the
time of withdrawal (Sec. 9, Rule IX, IRR of RA 9679).

The exercise of this option by the member shall not be considered as a ground to terminate his
membership with the Fund. The member shall continue to be mandatorily covered by the Fund
and his or her employer is mandated to continue deducting and remitting the employee’s required
contribution together with the corresponding employer’s contribution pursuant to these Rules.

Death Benefits

Upon the death of a member, his or her beneficiaries shall be entitled to death benefits in
an amount to be determined by the Board in addition to the Total Accumulated Value as
mentioned provided for under in Section 5 hereof (Sec. 10, Rule IX, IRR of RA 9679).

Government Guarantee

The benefits prescribed under R.A. 9679 shall not be diminished and to guarantee said
benefits the Government of the Republic of the Philippines accepts general responsibility for the
solvency of the Fund (Sec. 11, Rule IX, IRR of RA 9679).

Pag-IBIG Contributions are Excluded from the Computation of the Gross Income

Pursuant to Section 32 (B) (7) (f) of the National Internal Revenue Code of 1997, as
amended, Pag-IBIG Contributions are excluded from the computation of the gross income and
shall be exempt from taxation (Sec. 12, Rule IX, IRR of RA 9679).

What are the requirements in order to avail or, or to continue enjoy, the intended benefits?

According to pagibigfund.gov.ph as pursuant to the IRR of RA 9679, Pag-IBIG Fund

registration imposes different document requirements for different types of members according
to their employment status. Depending on your current type of employment, you will need the
following:
Employed individuals
 Individuals with formal employment are automatically applied for a Pag-IBIG
membership by their company.
Voluntary members
There are various types of voluntary members and each will come with their own set of
requirements which are as follows:
Self-paying employee
Formally employed individuals who just want to pay their Pag-IBIG contributions
on their own.
● Company ID
● Certificate of Employment and Compensation
● Latest Pay Slip
Self-employed
Small business owners, professionals, freelancers, and consultants belong to this
category.
● Latest Income Tax Return with a CPA-certified Financial Statement from
the previous year
● Two (2) 1×1 ID photos
● Certificate of Remittance or ESAV (this for old members)
● Mayor’s Permit or Business Permit
● DTI or SEC Registration (under the person’s name)
Self-employed professionals
Government licensed professionals such as lawyers, physicians, dentists, and etc.
who are doing private practice.
● PRC or BAR License
● Latest ITR from the previous year
● Certificate of Remittance or ESAV (this is for old members)
● Two (2) 1×1 ID photos
1. Overseas Filipino Workers (OFWs)– these are reactivating members.
● Valid and latest Contract of Employment (has original POEA stamp)
● POEA License, passport, or any valid ID
● Certificate of Remittance or ESAV
● Two (2) 1×1 ID photos
○ Special Power of Attorney – if a representative will submit the
requirements and pay the contributions.
Unemployed Spouse
An unemployed individual whose spouse of a Pag-IBIG member.
● Affidavit of Unemployment
● Certificate of Employment and Compensation of the member-spouse
● Written consent from the member-spouse
Franchise Holders or Operators
Entrepreneurs who run a franchised business.
 ● Latest ITR from the previous year
● Franchise Permit (under the person’s name)
● Car Registration or Official Receipt (under the person’s name)
● Certificate of Remittance or ESAV
● Two (2) 1×1 ID photos
1. Member-Spouse with Business– this is the same to no. 5, but here, the member-
spouse has a business.
● DTI or SEC Registration
● Mayor’s Permit or Business Permit
● Affidavit of Unemployment
● Latest ITR (from the previous year)
● Certificate of Employment and Compensation of the member-spouse
(must be notarized)
● Written consent from the member-spouse
● Two (2) 1×1 ID photos
Unemployed (reactivating members)
Unemployed individuals
● Affidavit of Unemployment

What is the procedure to be followed in order to avail of the intended benefits or

protections?

Registration of Employers

All new employers shall first register with the Fund prior to the start of their business
operations. Provided, that all employers who are not subject of mandatory coverage prior to R.A.
9679 and these Rules, shall register for coverage before January 1,2010, unless a different date is
set by the Board by resolution.(Sec. 5, Rule V, IRR of RA 9679).

Registration of Employees
It shall be the duty of all employers to register all their employees subject to mandatory
coverage, by submitting to the Fund all data and information that it may require in relation to the
employers’ respective businesses and employees, within thirty (30) days from the start of their
business operations. For newly hired employees, the employer shall register them with the Fund
within thirty (30) days from the start of their employment.(Sec. 6, Rule V, IRR of RA 9679).

Registration of the Self-employed

The self-employed who are subject to compulsory coverage shall register with the Fund
within thirty (30) days from the date he or she started to be self-employed. Provided, that if the
self-employed shall be required to obtain the necessary permits and/or licenses, other than the
license required for practicing a particular profession, prior to the practice of his or her self-
employment, he or she shall register with the Fund prior to engaging in such.(Sec. 7, Rule V, IRR
of RA 9679).
Voluntary Membership Registration (Office Registration)
1. Submit two copies of MDF and other supporting requirements to the Marketing and
Enforcement Division of the local Pag-IBIG branch. The original documents should also
be brought for authentication.
2. Get a Payment Order Form (POF) from the said office, and go to the Cash Division to
pay for Membership Contribution.
3. Present stamped or verified documents to the Marketing and Enforcement Division.
4. Secure a POF before going to the Cash Division for the contribution payment.
(www.pagibigfund.gov.ph)

Online Procedure (www.pagibigfund.gov.ph)

● Step 1: Go to the Pag-IBIG Fund's website.

To register for a Pag-IBIG membership, visit their website at
www.pagibigfund.gov.ph. Scroll down a little and click the “e-services” button.
● Step 2: Proceed to membership registration.
On the next page, click “Membership Registration” to apply for a Pag-IBIG
membership.
You’ll be redirected to the Online Membership Registration homepage, which
caters to those who intend to become a member of Pag-IBIG Fund. Click
Continue.
● Step 3: Fill out your name and birth date.
Input your name and date of birth to allow Pag-IBIG to search its member
database and make sure that you haven’t registered before.
Don’t forget to enter the code at the bottom part to prevent spamming. Click
Proceed.
● Step 4: Fill out the application form.
You’ll then be redirected to the next page, which acts as a virtual application form
for Pag-IBIG Fund membership.
Make sure that you fill out all the details needed. Take note that the form consists
of several tabs, such as Member Info, Other Info, Address, Contacts, Heirs,
Member Category, and Employment History, so you should go through each tab
and input the details being asked.
● Step 5: Submit your application.
Once you finish the form, click the Summary tab and submit your registration. If
your sign up has been successful, you’ll be redirected to the Successful
Registration page. You might also receive an SMS confirming your registration.

What are the obligations of the beneficiaries?

CONTRIBUTIONS
Rate of Contributions
 Covered employees and employers shall contribute to the Fund based on the monthly
compensation of covered employees as follows:
a. Employees earning not more than One thousand five hundred pesos (P1,500.00) per
month – one percent (1 %).
b. Employees earning more than One thousand five hundred pesos (P1,500.00) per month
-two percent (2%).
c. All employers – two percent (2%) of the monthly compensation of all covered
employees.(Sec. 1, Rule VI, IRR of RA 9679).
Full-time Spouse
Full-time spouses who volunteer to be covered by the Fund as provided for under these
Rules, shall adopt as a basis of monthly contributions one-half (½) of the monthly compensation
income of the employed spouse. The full-time spouse shall not be required to pay the employer’s
contribution.(Sec. 2, Rule VI, IRR of RA 9679)
Contributions of Member with Multiple Employers
In cases where a member has two or more employers, such member shall contribute
monthly to the Fund a percentage of his or her monthly compensation per employer, which shall
be matched by the latter in accordance with Section 1 of this Rule.(Sec. 3, Rule VI, IRR of RA
9679)

What/who are the other stakeholders and their respective obligations?

Employer’s Fiduciary Obligation

The employer assumes a fiduciary relationship with both the Fund and the member
concerned as regards the letter’s contribution and the required employer contribution, as well as
the remittance thereof to the Fund.
The employer likewise assumes the same fiduciary relationship with both the Fund and
the member concerned as regards the collection and remittance of the latter’s loan amortizations
or payments to the Fund when the same is made through salary deductions as provided in the
succeeding sections of this Rule. (Sec. 1, Rule VII, IRR of RA 9679)
Method of Collection and Payment
Monthly contributions of members to the Fund shall be collected through payroll
deductions by their respective employers, who for this purpose shall act as agent both of the
Fund and the member.
If a member avails of any loan from the Fund and the member consents in writing to
amortize or pay the same through salary deductions, the employer shall be duty-bound to
faithfully implement the same and shall continue to do so until the loan is fully paid. Until the
loan is fully paid, the employer shall not discontinue the salary deductions without the prior
written consent of the Fund. For this purpose, the employer shall likewise act as agent both of the
Fund and the employee.
If a member-borrower who has previously consented to amortize or pay his loans through
salary deductions resigns or otherwise separates from the service of the employer, the employer
shall be bound to inform the Fund of such resignation or separation immediately upon notice
thereof, but not later than thirty (30) days from the effectivity of said resignation or separation.
Every employer shall issue corresponding receipts for all contributions or loan
amortizations or payments deducted from the employee’s compensation or shall indicate such
deductions on the employee’s pay slip.(Sec. 2, Rule VII, IRR of RA 9679)

Remittance of Collections
a. All employers shall remit to the Fund their contributions and the contributions of their
covered employees as well as the latter’s loan amortizations or payments to the Fund, as
provided for under Section 2 of this Rule, when applicable, within fifteen (15) days from
the date the same were collected unless another period is previously agreed upon between
the employer and the Fund, or within such periods as the Fund may prescribe otherwise.
The Fund may prescribe a different remittance schedule for Filipinos employed by
foreign based employers depending on the nature of their contracts or manner of their
deployment abroad.
b. Every employer is required to set aside and remit such contributions as prescribed
under R.A. No. 9679 and these Rules shall be liable for their payment, and non-payment
thereof shall further subject the employer to a penalty of three percent (3%) per month of
the amounts payable from the date the contributions fall due until paid. Every employer
who actually deducts from the salary of his employee the latter’s loan amortization or
payments to the Fund, as provided for under these Rules, shall be liable for their
payment, and non-payment thereof shall likewise further subject the employer to a
penalty of three percent (3%) per month of the amounts payable from the date the loan
amortizations or payments fall due until paid.
c. It shall be mandatory and compulsory for all government instrumentalities, agencies,
including government-owned and controlled corporations, to provide the payment of
contributions in their annual appropriations. Penal sanctions shall be imposed upon these
employers who fail to include the payment of contributions on time, or delay the
remittance of the required contributions to the Fund. The heads of offices and agencies
shall be administratively liable for non-remittance of the required contributions to the
Fund.
d. Failure or refusal of the employer to pay or to remit the contributions herein prescribed
shall not prejudice the right of the covered employee to the benefits under this Act.
e. No retroactive payment of contributions shall be allowed, except for unremitted
collections that are paid by the employer which shall be applied retroactively upon
presentation of proof that said contributions were previously collected or deducted from
the employee. Without prejudice to the employer’s civil, criminal and administrative
liabilities, the employer shall likewise be liable for all the applicable interests and
penalties arising from the late remittance of contributions and loan amortizations or
payments actually collected from the member, as well as the dividends which the
 contributions should have earned have it been remitted on time. Such interests and
penalties, excluding the penalty prescribed under Section 3b of Rule VII, shall be applied
for the account of the member concerned and the dividends added to said member’s TAV
Provided, that if the employer did not collect from his employee during the period of his
delinquency, but pays the mandatory employer counterpart for that period, the same shall
not be given retroactive effect but shall be treated as a single contribution for the month
in which the payment is made in favor of the concerned member. In the same manner,
when an employee opts to pay the sum of his or her personal contributions during the
period of his or her employer’s delinquency, such payment shall be treated as a single
contribution.
f. The contributions under R.A. 9679 and these Rules, in cases where an employer refuses
or neglects to pay the same, shall be collected by the Fund in the same manner as taxes
are made collectible under the National Internal Revenue Code, as amended.
The right to institute the necessary action against the employer may be commenced
within twenty (20) years from the time delinquency is known or the assessment is made
by the Fund, or from the time the benefit accrues, as the case may be.(Sec. 3, Rule VII,
IRR of RA 9679).

What are the penalties, if any, for violations of the provisions of the law?
Penalty Clause
Pursuant to Section 25 of R.A. 9679, refusal or failure without lawful cause or with
fraudulent intent to comply with the provisions of said law and these Rules, particularly with
respect to registration of employees, collection and remittance of employee-savings as well as
the required employer contributions, or the correct amount due, within the time set under these
Rules or the policies and guidelines adopted by the Board, or specific call or extension made by
the Fund Management, shall constitute an offense punishable by a fine of not less than, but not
more than twice, the amount involved or imprisonment of not more than six (6) years, or both
such fine and imprisonment, in the discretion of the Court, apart from the civil liabilities and/or
obligations of the offender or delinquent.
When the offender is a corporation, the penalty shall be imposed upon the members of
the governing board and the President or General Manager, without prejudice to the prosecution
of related offenses under the Revised Penal Code and other laws, revocation and denial of
operating rights and privileges in the Philippines, and deportation when the offender is a
foreigner.
In case of government instrumentalities, agencies or corporations, the treasurer, finance
officer, cashier, disbursing officer, budget officer or other official or employee who fails to
include in the annual budget the amount corresponding to the employers’ contributions, or who
fails or refuses or delays by more than thirty (30) days from the time such amount becomes due
and demandable or to deduct the monthly contributions of the employee shall, upon conviction
by final judgment, suffer the penalties of imprisonment of not more that six (6) years, and a fine
of not less than, but not more than twice the amount involved.(Sec. 1, Rule XII, IRR of RA 9679).
Supreme Court Decisions

1. How is the imposition of the contribution upon the employer to its employee’s fund valid?

An example of a burden that can be validly imposed on a private establishment is the

requirement under Section 19 in relation to Section 18 of the Social Security Law and Section 7
of the Pag-IBIG Fund for the employer to contribute a certain amount to fund the benefits of its
employees. The amounts contributed by private employers form part of the legislated wages of
employees. The private employers are deemed fully compensated for these amounts by the
services rendered by the employees. (Manila Memorial Park, Inc. v. Secretary of Social Welfare
and Development, G.R. No. 175356, [December 3, 2013], 722 PHIL 538-663; Southern Luzon
Drug Corp. v. Department of Social Welfare and Development, G.R. No. 199669, [April 25,
2017], 809 PHIL 315-398)

2. Who are covered by the Home Development Mutual Fund?

As a provident fund, Home Development Mutual Fund relies on the required remittance
of savings by its members. Membership is either mandated or voluntary. Its mandated
membership consists of all private individuals covered by the Social Security System, all public
employees covered by the Government Service Insurance System, uniformed personnel in the
Armed Forces of the Philippines, the Philippine National Police, the Bureau of Jail Management
and Penology, the Bureau of Fire Protection, and all Filipinos employed by foreign employers
regardless of their place of deployment. Voluntary membership is open to Filipinos aged 18 to
65. (Home Development Mutual Fund Pag-Ibig Fund v. Sagun, G.R. Nos. 205698, 205780,
208744, 209424, 209446, 209489, 209852, 210095, 210143, 228452, 228730 & 230680, [July
31, 2018])

3. What is the limitation on the rule-making power of the HDMF Board of Trustees?

The HDMF cannot, in the exercise of its rule-making power, issue a regulation not
consistent with the law it seeks to apply. Indeed, administrative issuances must not override,
supplant or modify the law, but must remain consistent with the law they intend to carry out.
Only Congress can repeal or amend the law (Mercury Group of Companies, Inc. v. Home
Development Mutual Fund, G.R. No. 171438, [December 19, 2007].

4. What is the nature and character of the HDMF as a provident fund?

Section 10 of Republic Act (R.A.) No. 9679 or the HDMF Law of 2009 describes the
HDMF fund as "private in character, owned wholly by the members, administered in trust and
applied exclusively for their benefit." The personal and employer contributions are to be fully
credited to each member and shall earn dividends. The fund also constitutes as a provident fund
of each member, to be paid upon termination of membership. In other words, HDMF funds are
funds held in trust for the member and are provident funds to be paid to the member, or his estate
or beneficiaries, upon termination of his membership. As in the nature of provident funds, the
HDMF funds operate as a savings scheme consisting of contributions from the members in
monetary form which, in turn, earns dividends, may be used as a loan facility and provides
supplementary welfare benefit to members. It is akin to funds held by banks, which is still
wholly owned by the depositor but is loaned to the bank which the latter may use/invest and thus
earns interest for the depositor. In other words, HDMF funds may thus properly be regarded as
moneys contributed by HDMF members which may be the subject of syndicated estafa. (Home
Development Mutual Fund Pag-Ibig Fund v. Sagun, G.R. Nos. 205698, 205780, 208744,
209424, 209446, 209489, 209852, 210095, 210143, 228452, 228730 & 230680, [July 31, 2018])

5. Does HDMF have the power to amend its implementing Rules and Regulations|||?

The legislative power has been described generally as the power to make, alter, and
repeal laws. The authority to amend, change, or modify a law is thus part of such legislative
power. It is the peculiar province of the legislature to prescribe general rules for the government
of society. However, the legislature cannot foresee every contingency involved in a particular
problem that it seeks to address. Thus, it has become customary for it to delegate to
instrumentalities of the executive department, known as administrative agencies, the power to
make rules and regulations. This is because statutes are generally couched in general terms
which express the policies, purposes, objectives, remedies and sanctions intended by the
legislature. The details and manner of carrying out the law are left to the administrative agency
charged with its implementation. In this sense, rules and regulations promulgated by an
administrative agency are the product of a delegated power to create new or additional legal
provisions that have the effect of law. Hence, in general, rules and regulations issued by an
administrative agency, pursuant to the authority conferred upon it by law, have the force and
effect, or partake of the nature, of a statute.
The law delegated to the HDMF the rule-making power since this is necessary for the
proper exercise of its authority to administer the Fund. Following the doctrine of necessary
implication, this grant of express power to formulate implementing rules and regulations must
necessarily include the power to amend, revise, alter, or repeal the same. (Yazaki Torres
Manufacturing, Inc. v. Court of Appeals, G.R. No. 130584, [June 27, 2006], 526 PHIL 79-90)

6. Is the HDMF governing board subject to the control of the President of the Philippines?
The President's power of control applies to the acts or decisions of all officers in the
Executive branch. This is true whether such officers are appointed by the President or by heads
of departments, agencies, commissions, or boards. The power of control means the power to
revise or reverse the acts or decisions of a subordinate officer involving the exercise of
discretion.
In short, the President sits at the apex of the Executive branch, and exercises "control of
all the executive departments, bureaus, and offices." There can be no instance under the
Constitution where an officer of the Executive branch is outside the control of the President. The
Executive branch is unitary since there is only one President vested with executive power
exercising control over the entire Executive branch. Any office in the Executive branch that is
not under the control of the President is a lost command whose existence is without any legal or
constitutional basis.
The GSIS and HDMF fall under the Office of the President. The corporate powers of the
GSIS, PHILHEALTH, ECC and HDMF are exercised through their governing Boards, members
of which are all appointed by the President of the Philippines. Undoubtedly, the GSIS,
PHILHEALTH, ECC and HDMF and the members of their respective governing Boards are
under the control of the President. (Funa v. Chairman, Civil Service Commission, G.R. No.
191672, [November 25, 2014], 748 PHIL 169-204)

7. Is the section 7 of the Pag-ibig Fund Law a valid exercise of police power?
The Dissent discusses at length the doctrine on "taking" in police power which occurs
when private property is destroyed or placed outside the commerce of man. Indeed, there is a
whole class of police power measures which justify the destruction of private property in order to
preserve public health, morals, safety or welfare. As earlier mentioned, these would include a
building on the verge of collapse or confiscated obscene materials as well as those mentioned by
the Dissent with regard to property used in violating a criminal statute or one which constitutes a
nuisance. In such cases, no compensation is required.
 However, it is equally true that there is another class of police power measures which do
not involve the destruction of private property but merely regulate its use. The minimum wage
law, zoning ordinances, price control laws, laws regulating the operation of motels and hotels,
laws limiting the working hours to eight, and the like would fall under this category. The
examples cited by the Dissent, likewise, fall under this category: Article 157 of the Labor Code,
Sections 19 and 18 of the Social Security Law, and Section 7 of the Pag-IBIG Fund Law. These
laws merely regulate or, to use the term of the Dissent, burden the conduct of the affairs of
business establishments. In such cases, payment of just compensation is not required because
they fall within the sphere of permissible police power measures. (Justice Carpio dissenting
opinion; Manila Memorial Park, Inc. v. Secretary of Social Welfare and Development, G.R. No.
175356, [December 3, 2013], 722 PHIL 538-663)

8. Can HDMF grant productivity incentive bonus to its personnel pursuant to Republic Act
No. 6971, otherwise known as the "Productivity Incentives Act of 1990”?
Petitioner is a government-owned and controlled corporation performing proprietary
functions with original charter or created by special law, specifically Presidential Decree (PD)
No. 1752, amending PD No. 1530. As such, petitioner HDMF is covered by the Civil Service
pursuant to Article IX, Section 2(1) of the 1987 Constitution, and, therefore, excluded from the
coverage of Republic Act No. 6971.
Since Republic Act No. 6971 intended to cover only government-owned and controlled
corporations incorporated under the general corporation law, the power of administrative
officials to promulgate rules in the implementation of the statute is necessarily limited to what is
intended and provided for in the legislative enactment. Hence, the Supplemental Rules clarified
that government-owned and controlled corporations performing proprietary functions which are
"created, maintained or acquired in pursuance of a policy of the state, enunciated in the
constitution or by law, and those whose officers and employees are covered by the Civil Service"
are excluded from the coverage of Republic Act No. 6971.
Therefore, even if petitioner HDMF granted the Productivity Incentive Bonus before the
Supplemental Rules were issued clarifying that petitioner was excluded from the coverage of
Republic Act No. 6971, the employees of HDMF did not acquire a vested right over said bonus
because they were not entitled to it under Republic Act No. 6971. (HDMF v. Commission on
Audit, G.R. No. 142297, [June 15, 2004], 476 PHIL 92-105)

9. Can HDMF grant amelioration allowance to a private corporation?

In approving the grant of amelioration allowance, the HDMF relied on Section 2, Rule
VIII of the Omnibus Rules ("Omnibus Rules") Implementing Executive Order No. 292. Section
2 of the Omnibus Rules provides:
SEC. 2. Each department or agency shall prepare a career and personnel
development plan which shall be integrated into a national plan by the
Commission which shall serve as the basis for all career and personnel
development activities in the government. The Career and Personnel
Development Plan shall include provisions on merit promotions, performance
evaluation; in-service training; overseas and local scholarships and training
grants; suggestions, incentive awards systems; provisions for welfare, counseling,
recreation and similar services; and other human resource development
 interventions such as on the job training, counseling, coaching, job rotation,
secondment, job swapping and others.
This provision, however, refers to career and personnel development plans. It covers
merit promotions, performance evaluation, in-service training, scholarships and training grants,
suggestions and incentive awards systems, and provisions for welfare, counseling, recreation and
similar services, as well as other human resource development interventions. In granting
amelioration allowance to the DBPSC personnel, HDMF stretched the scope of the "welfare
provision" beyond its meaning.
The COA points out that Section 2 of the Omnibus Rules does not provide for any grant
of allowance. Even if we consider "welfare" as including economic welfare, the grant of
amelioration allowance should cover only the regular employees of HDMF. The Omnibus Rules
specifically apply only "to all officers and employees both in the career and non-career service."
The DBPSC personnel are neither career nor non-career service employees. They are not even
employees of HDMF or the government. They are employees of DBPSC, a private corporation,
which temporarily assigned them to HDMF to perform DBPSC's contractual obligations to
HDMF.(Home Development Mutual Fund v. Commission on Audit, G.R. No. 157001, [October
19, 2004], 483 PHIL 666-684)

References

Laws:

Implementing Rules and Regulations of Republic Act No. 9679

REPUBLIC ACT NO. 9679: AN ACT FURTHER STRENGTHENING THE HOME
DEVELOPMENT MUTUAL FUND, AND FOR OTHER PURPOSES

Website:

Pagibigfund.gov.ph. 2020. [online] Available at: <http://www.pagibigfund.gov.ph/>

[Accessed 12 May 2020].

Jurisprudence:

Funa v. Chairman, Civil Service Commission, G.R. No. 191672, [November 25, 2014],
748 PHIL 169-204
HDMF v. Commission on Audit, G.R. No. 142297, [June 15, 2004], 476 PHIL 92-105
Home Development Mutual Fund v. Commission on Audit, G.R. No. 157001, [October
19, 2004], 483 PHIL 666-684
Home Development Mutual Fund Pag-Ibig Fund v. Sagun, G.R. Nos. 205698, 205780,
208744, 209424, 209446, 209489, 209852, 210095, 210143, 228452, 228730 &
230680, [July 31, 2018]
Manila Memorial Park, Inc. v. Secretary of Social Welfare and Development, G.R. No.
175356, [December 3, 2013], 722 PHIL 538-663
 Mercury Group of Companies, Inc. v. Home Development Mutual Fund, G.R. No.
171438, [December 19, 2007
Yazaki Torres Manufacturing, Inc. v. Court of Appeals, G.R. No. 130584, [June 27,
2006], 526 PHIL 79-90