Date of issuance and effectivity
- The guidelines take effect upon availability of the Short-Term Loan program for Non-IISP branches.
- The guidelines remain effective until the new Short-Term Loan System under the Integrated Information Systems Project (IISP) is already operational in the branch.
Objectives and program alignment
- The MPL program aims to align non-IISP branches (where the new STL system under the IISP is not yet operational) with the specific provisions of Circular No. 323.
- The alignment is treated as a prelude to actual implementation of the MPL guidelines.
Loan purpose and covered needs
- The MPL provides financial assistance to a Pag-IBIG member for house repair, minor home improvement, home enhancement (including purchase of appliance and furniture), tuition/educational expenses, health and wellness, livelihood, or other purposes.
Borrower eligibility requirements
- The program is open to a Pag-IBIG member who meets all eligibility requirements.
- The member must have made at least twenty-four (24) monthly mandatory savings (MS).
- For members who withdrew their MS due to membership maturity, the reckoning date for the updated 24 MS is the first MS following the month the member qualified to withdraw MS due to membership maturity.
- The member must have five (5) MS for the last six (6) months as of the month prior to the date of loan application.
- If the member has an existing Pag-IBIG Housing Loan, the Housing Loan account must not be in default as of the date of application.
- If the member has existing MPL and/or Calamity Loan, those account(s) must not be in default as of the date of application.
Loan amount and entitlement limits
- A qualified borrower may borrow an amount based on the lowest of: desired loan amount, loan entitlement, and capacity-to-pay.
- Loan entitlement depends on the number of contributions, using the following schedule based on number of MS:
- 24 to 59 months: up to 60% of Total Accumulated Value (TAV).
- 60 to 119 months: up to 70% of TAV.
- At least 120 months: up to 80% of TAV.
- Capacity to pay limits the loan so that statutory deductions, monthly principal and interest repayment, and other obligations will not reduce the borrower’s net take home pay below the minimum requirement prescribed by the General Appropriations Act (GAA) or company policy, whichever is applicable.
- The borrower’s net take home pay is the monthly compensation net of statutory deductions, other authorized deductions, outstanding loan obligations, and computed monthly repayment for the loan being applied for.
- Statutory deductions include income tax withheld, and contributions/premiums for GSIS/SSS, Pag-IBIG, and PhilHealth.
Special rule for existing Calamity Loan
- If the borrower has an existing Calamity Loan, the loanable amount is the difference between 80% of the borrower’s TAV and the outstanding balance of the Calamity Loan.
- The Calamity Loan adjustment must not exceed the borrower’s loan entitlement under these guidelines.
Interest rate and loan term
- The MPL bears an interest rate of 10.75% per annum for the duration of the loan.
- The loan is repaid over a maximum period of twenty-four (24) months, with a grace period of two (2) months.
Release of loan proceeds
- Loan proceeds are released through any of the following modes:
- Crediting to the borrower’s cash card/disbursement card.
- Crediting to the borrower’s bank account through Landbank as Payroll Credit Systems Validation (PACSVAL).
- Check payable to the borrower.
- Other similar modes of payment.
- Checks unclaimed after three (3) days from the DV/check date are mailed to the member-borrower.
Loan payments and remittance deadlines
- The loan must be repaid in equal monthly payments sufficient to cover principal and interest over the loan period.
- Amortization is made, whenever feasible, through salary deduction.
- Payments must be remitted to the Fund on or before the 15th day of each month, starting on the 3rd month following the date on the DV/check.
- The borrower may fully pay the outstanding balance prior to loan maturity.
- If the borrower cannot pay through salary deduction due to any of the circumstances such as (for example) suspension from work, leave of absence without pay, or insufficiency of take home pay at any time during the term, the borrower must pay directly to the Fund.
Penalties for late or non-payment
- A penalty of one-half percent (½%) of any unpaid amount is charged for every month of delay.
- For borrowers paying through salary deduction, penalties are reversed only upon presentation of proof that non-payment was due to the fault of the employer; in that case, penalties due from the borrower are charged to the employer.
- Non-remittance by the employer of total loan amortization subjects the employer to a penalty of one-tenth of one percent (1/10 of 1%) per day of delay, computed from the date the loan amortizations/payments fall due until paid.
Application of payments priorities
- Payments are applied in the following order of priorities:
- Penalties (if any),
- Interest, then
- Principal.
- Any amount in excess of the required monthly amortization (accelerated payment) is applied to future amortizations.
Default triggers and consequences
- The borrower is in default in any of the following cases:
- Any willful misrepresentation made by the borrower in documents executed in relation to the loan.
- Failure to pay any three (3) consecutive monthly amortizations.
- Failure to pay any three (3) consecutive mandatory savings.
- Violation by the borrower of any Pag-IBIG Fund policies, rules, regulations, and guidelines.
- Upon default, the outstanding loan obligation becomes due and demandable.
- The outstanding obligation is deducted from the TAV credited to the borrower.
- Default creates a lien on the borrower’s Pag-IBIG I and/or Pag-IBIG II and/or Modified Pag-IBIG II (MP2) account, if any.
Program separation and aggregate limits
- The MPL and Calamity Loan programs are treated as separate and distinct, and the member may avail of MPL while still having an outstanding Calamity Loan, and vice versa.
- Loan availments for these two programs are governed by their corresponding guidelines.
- The aggregate short-term loan cannot exceed 80% of the borrower’s TAV.
Calamity Loan treatment for MPL proceeds
- If the borrower has an existing Calamity Loan at the time of MPL availment, the outstanding Calamity Loan balance is not deducted from the proceeds of the MPL.
- Borrowers with outstanding calamity loans availed prior to issuance of Circular No. 315 (covering members affected by Typhoon Gener and the monsoon rains brought about by Hanging Habagat) may avail of an MPL after paying at least 6 monthly amortizations.
- For these borrowers, the outstanding balance, interest, and penalties are deducted from the MPL proceeds.
Marginal MPL balance offset
- If an MPL account has a marginal balance of not more than PHP 10.00 despite payment of the required 24 monthly amortizations, the Fund offsets the marginal balance from the borrower’s TAV.
Membership termination and death effects
- If membership terminates prior to loan maturity, the outstanding loan obligation is deducted from the borrower’s TAV and/or any amount due him or his beneficiaries in the possession of the Fund.
- If the borrower dies, the outstanding obligation is computed up to the date of death.
- Payments received after death are refunded to the borrower’s beneficiaries.
Multiple employers and one outstanding MPL
- An eligible member who is an active member under more than one employer may have only one outstanding MPL at any given time.
- At the point of application, the member must choose which employer will deduct and remit monthly MPL amortizations.
Loan renewal and reuse of proceeds
- A borrower may renew the MPL after payment of at least six (6) monthly amortizations and meeting eligibility criteria.
- The proceeds of the new loan are applied to the borrower’s outstanding MPL obligation, and the net proceeds are released to the borrower.
- If the borrower fully pays prior to loan maturity, the borrower may apply for a new loan any time.
Immediate TAV offset based on verified reasons
- Immediate offsetting of the borrower’s outstanding MPL obligation against the borrower’s TAV is effected upon approval of the borrower’s request, provided the request is based on justifiable reasons verified by the Fund.
- Justifiable reasons include:
- Unemployment of the borrower.
- Illness of the member-borrower or any immediate family member as certified by a licensed physician showing failure to pay required amortizations when due.
- Death of any immediate family member resulting in failure to pay required amortizations when due.
MPL re-application after TAV offset
- If TAV offsetting is effected on a defaulting MPL, the borrower may apply for a new MPL subject to conditions.
- If the borrower paid at least 6 monthly amortizations prior to default and offsetting, the borrower may immediately apply, subject to eligibility criteria.
- If the borrower paid less than 6 monthly amortizations prior to default and offsetting, the borrower may apply only after two (2) years from the date of TAV offsetting, subject to eligibility criteria.
Escalation of interpretation and implementation
- Any issue in interpretation and implementation is resolved by the Department Manager III concerned or escalated to the next higher approving authorities.
Repealing and amendment rules
- All previous circulars or memoranda that conflict with or are inconsistent with the provisions and/or purposes of this circular are repealed, amended, or modified.
- The Senior Management Committee may amend, modify, or revise the guidelines, as long as amendments are in furtherance of the program objectives and consistent with the Fund’s charter and existing laws.