Purpose and program objectives
- The Pag-IBIG HELPs aim to provide additional benefits to members by extending financial assistance for payment of educational and health-related expenses of the member and/or his beneficiaries (Section I).
- The program aims to extend goodwill to members (Section I).
Coverage and who may apply
- The guidelines cover all Pag-IBIG I members (Section II).
- A Pag-IBIG member may avail of the Pag-IBIG HELPs if he meets the eligibility requirements under Section V (Section V).
Key terms defined
- Actual Need means educational or medical expenses, or cost of a healthcare plan to be incurred by the borrower or beneficiary net of financial aid, grant or discount (Section III).
- Active Member means a member with at least five (5) monthly mandatory savings within the last six (6) months prior to application (Section III).
- Beneficiary means a person who benefits from the loan proceeds released under the Pag-IBIG HELPs for payment of products and services of the educational/medical institution or Health Maintenance Organizations (HMOs) (Section III).
- Desired Loan Amount means the amount indicated in the loan application form (Section III).
- Discount/Rebate means the amount allowed by the partner-merchant to be deducted from assessed costs of products or services it will provide (Section III).
- Educational Expenses mean the total fees charged by an educational institution shown in the assessment form (Section III).
- Equated Monthly Installment (EMI) means the installment amount to be paid by the borrower (Section III).
- Financial Aid/Grant includes support provided by partner schools’ scholarship programs, Government Scholarship Grant (DOST, LGUs, etc), PhilHealth, PCSO, etc. (Section III).
- Healthcare Plan means any plan or organized format for delivering health care services, including in-patient, out-patient, emergency, preventive care, optional dental care, and other needs pertaining to the health security of the member or his dependents/beneficiaries (Section III).
- Maintenance Medication means regular medication treatment for a chronic or long-term medical condition (Section III).
- Medical Expenses include costs of diagnosis, treatment, and other health care charges, including doctor’s fees, fees for clinical and ancillary services, room and meals, medical supplies, medicines, and payments for use of equipment (Section III).
- Partner-merchant means the accredited educational and medical institution, and HMOs accredited by the Fund (Section III).
- Total Accumulated Value (TAV) means the sum of the mandatory member’s savings and employer’s counterpart (when appropriate) and the corresponding dividends (Section III).
- Full Risk Based Pricing Framework refers to the model used by the Fund to determine pricing/interest rates covering base rate, cost of servicing and administering, reasonable margin, expected loss, and use of capital (footnote [1]).
Loan purpose and covered expenses
- The Pag-IBIG HELPs provide a loan facility for Educational Expenses and/or Medical Expenses and/or a Healthcare Plan from HMOs accredited by the Fund (Section IV).
Eligibility requirements
- A qualified borrower must have at least twenty-four (24) monthly mandatory savings (MS) (Section V).
- The borrower must be an active Pag-IBIG member at the time of application (Section V).
- If the borrower has a Pag-IBIG Housing Loan, the account must be updated as of date of application (Section V).
- If the borrower has an existing MPL and/or Calamity Loan, the account/s must be updated as of date of application (Section V).
Loan amount limits
- A qualified borrower’s loan entitlement is the lowest among the following limits (Section VI).
- The first limit is Loan Entitlement, equal to ninety percent (90%) of TAV less outstanding balance on MPL and/or Calamity Loan, if any (Section VI.1).
- The second limit is Capacity to Pay, meaning the loan amount is limited so that statutory deductions, monthly repayment of principal and interest, and other obligations will not cause the borrower’s net take home pay to fall below the minimum requirement as prescribed by the General Appropriations Act (GAA) or company policy, whichever is applicable (Section VI.2).
- Net take home pay means monthly compensation net of statutory deductions, other authorized deductions, outstanding loan obligations, and computed monthly repayment for the loan being applied for, where statutory deductions include income tax withheld and contributions/premiums for GSIS/SSS, Pag-IBIG, and PhilHealth (Section VI.2).
- The remaining amount limits are the Actual Need amount and the Desired Loan Amount, both of which operate as ceilings in the “lowest of” computation (Sections VI.3 and VI.4).
Interest rate and repayment term
- The loan is charged an interest based on the Full Risk Based Pricing Framework (Section VII).
- The loan is repaid over six (6) months or twelve (12) months, at the option of the borrower (Section VIII).
- The loan includes a two (2) months grace period (Section VIII).
Loan release and payment mechanics
- The loan proceeds are released through a check payable to the Partner-merchant for the account of the beneficiary (Section IX).
- If the provider is not a partner-merchant, the check is payable to the borrower (Section IX).
- The loan is paid in equal monthly installments that fully cover principal and interest over the loan period (Section X).
- Amortization is made through salary deduction whenever feasible (Section X).
- If salary deduction is not feasible, amortization payments are made through:
- Over-the-Counter (Section X.2.1),
- Accredited collection partners (Section X.2.2), or
- Other modes approved by Pag-IBIG Fund in the future (Section X.2.3).
- The Promissory Note/Agreement Number must be indicated in the remittance form or Pag-IBIG Fund Receipt (PFR) (Section X).
- Payments are remitted to the Pag-IBIG Fund on or before the fifteenth (15th) day of the third (3rd) month following the DV/check date (Section X).
- The borrower may fully pay the outstanding balance prior to loan maturity (Section X).
- If the borrower cannot pay through salary deduction, direct payment to Pag-IBIG Fund or accredited collecting agents is required in circumstances including:
- Suspension from work (Section X.6.1),
- Leave of absence without pay (Section X.6.2),
- Insufficiency of net take home pay at any time during the term (Section X.6.3),
- Resignation or termination where the outstanding balance is not fully settled by separation pay, provided an agreement exists between employer and borrower to deduct amortization payments from separation pay (Section X.6.4).
Penalties for late payments
- A penalty of one-twentieth of one percent (1/20 of 1%) of any unpaid amount is charged to the borrower for every day of delay (Section XI).
- For borrowers paying through salary deduction, when proof shows non-payment was due to the fault of the employer, borrower penalties are charged to the employer (Section XI).
- Non-remittance of total loan amortization subjects the employer to an additional penalty of one-tenth of one percent (1/10 of 1%) per day of delay from the date the loan amortization fell due until paid (Section XI).
How payments are applied
- Payments are applied in this order of priorities:
- Penalties (if any),
- Interest, then
- Principal (Section XII.1.1 to 1.3).
- Any amount in excess of the required EMI is applied to future amortization when due (Section XII).
Default and its triggers
- A borrower is in default in any of the following cases (Section XIII):
- Any willful misrepresentation by the borrower in documents executed relating to the loan,
- Failure to pay any three (3) consecutive EMIs,
- Failure to pay any three (3) consecutive MS,
- Default in an outstanding Pag-IBIG MPL and/or Calamity Loan, or
- Violation of any policies, rules, regulations, and guidelines of Pag-IBIG Fund.
Effects of default and TAV offset
- Upon default, the outstanding loan obligation becomes due and demandable (Section XIV).
- The outstanding loan obligation from MPL and/or Calamity Loan also becomes due and demandable (Section XIV).
- The affected loan obligations are deducted from the borrower’s TAV after all collection efforts prove unsuccessful (Section XIV).
Borrower limits, multiple employers, and documents
- A maximum of three (3) qualified Pag-IBIG members may apply for separate Pag-IBIG HELPs to benefit a single beneficiary (Section XV.1).
- If a member is an active member under more than one employer, the member may have only one outstanding Pag-IBIG HELPs at any given time (Section XV.2.1).
- At point of application, the member must choose which employer will deduct and remit the Pag-IBIG HELPs EMI (Section XV.2.2).
- In addition to a duly accomplished application form, the borrower must submit additional documents corresponding to the loan purpose (Section XV.3):
- For Educational Expenses: an assessment form or its equivalent (in original copy) from the educational institution (Section XV.3.1),
- For Medical Expenses: a statement of account/hospital bill, net of PhilHealth and discounts (Section XV.3.2),
- For maintenance medication: a quotation from the company or drug store and a prescription issued by the physician concerned (Section XV.3.3),
- For Healthcare Plan from accredited HMO: an assessment form from the accredited HMO (Section XV.3.4).
Renewal, separateness of loans, and reapplication rules
- For loan renewal with a six (6) months repayment term, renewal is allowed upon payment of at least four (4) posted EMI (Section XV.4.1).
- For loan renewal with a twelve (12) months repayment term, renewal is allowed upon payment of at least eight (8) posted EMI (Section XV.4.2).
- Proceeds of the new loan are applied to the borrower’s outstanding Pag-IBIG HELPs obligation, and the net proceeds are released to the partner-merchant (Section XV.4.3).
- Pag-IBIG HELPs are treated as a separate and distinct loan facility from MPL and/or Calamity Loan (Section XV.5).
- After TAV offsetting of defaulting Pag-IBIG HELPs, the borrower may apply for a new Pag-IBIG HELPs after two (2) years from the date of TAV offsetting (Section XV.6).
- Replenishment of the member’s TAV after offsetting of Pag-IBIG HELPs is not allowed (Section XV.6).
- If membership terminates prior to loan maturity:
- The outstanding loan obligation becomes due and demandable (Section XV.7.1), and
- The outstanding loan obligation is deducted from the borrower’s TAV (Section XV.7.2).
Escalation, amendment authority, and effectivity
- Issues in interpretation and implementation are resolved by the concerned Department Manager III or escalated to the next higher approving authorities (Section XVI).
- Senior Management may amend, modify, or revise provisions when amendments advance program objectives and remain consistent with Pag-IBIG Fund’s charter and existing laws (Section XVII).
- The guidelines take effect upon availability of the program (Section XVIII).
Signatory
- The circular is signed by ATTY. DARLENE MARIE B. BERBERABE, Chief Executive Officer.