Law Summary
Scope and Coverage
- Applies to all Pag-IBIG I members.
Definitions
- Actual Need: Education or medical costs net of aid or discount.
- Active Member: 5 monthly savings in last 6 months.
- Beneficiary: Person benefiting from loan payment for education or health services.
- Desired Loan Amount: Amount requested in application.
- Discount/Rebate: Deduction offered by partners.
- Educational Expenses: Total fees from educational institution.
- EMI: Monthly installment.
- Financial Aid/Grant: Includes scholarships, government grants, PhilHealth, etc.
- Healthcare Plan: Organized health service plans such as those offered by HMOs.
- Maintenance Medication: Regular medication for chronic illnesses.
- Medical Expenses: Costs for diagnosis, treatment, medicines, room, and related hospital charges.
- Partner-merchant: Accredited educational and medical institutions and HMOs.
- Total Accumulated Value (TAV): Sum of member savings, employer counterpart, and dividends.
Loan Purpose
- Cover educational expenses.
- Cover medical expenses.
- Cover healthcare plans from accredited HMOs.
Borrower Eligibility
- Minimum 24 monthly mandatory savings.
- Active member at application.
- Updated accounts on existing Pag-IBIG loans.
Loan Amount Determination
- Loan Amount is the lowest of:
- 90% of Total Accumulated Value minus outstanding loan balances.
- Borrower's capacity to pay without net take home falling below set minimum.
- Actual need.
- Desired loan amount.
Interest Rate
- Computed based on a full risk-based pricing framework considering costs, margin, expected losses, and capital use.
Loan Term
- Repayment either over 6 or 12 months with a 2-month grace period.
Loan Release
- Disbursed via check to partner-merchants for beneficiary's account.
- If not a partner-merchant, check payable to borrower.
Loan Payment Terms
- Equal monthly installments covering principal and interest.
- Preferably via salary deduction.
- Alternative payment methods include over-the-counter, accredited partners, or other approved modes.
- Payments due by 15th day of third month from check date.
- Full prepayment allowed.
- Borrowers must pay directly to Fund if salary deduction is not feasible due to suspension, leave without pay, insufficient net pay, resignation, or termination.
Penalties
- 1/20 of 1% daily penalty on unpaid amounts.
- Employer responsible for penalties if non-payment due to employer fault.
- Employer also liable for additional penalties for failure to remit deductions.
Application of Payments
- Payments applied first to penalties, then interest, then principal.
- Excess payments applied to future amortizations.
Default Conditions
- Willful misrepresentation.
- Non-payment of any 3 consecutive EMIs.
- Non-payment of any 3 consecutive monthly savings.
- Default on other Pag-IBIG loans.
- Violation of Pag-IBIG policies.
Consequences of Default
- Loan becomes immediately due and demandable.
- Outstanding obligations including other loans may be deducted from TAV.
Additional Provisions
- Up to 3 members may borrow for the same beneficiary separately.
- Members with multiple employers may have only one outstanding loan and must select employer for salary deduction.
- Required documentation varies by loan purpose (education, medical expenses, healthcare plans).
- Loan renewal allowed after paying a portion of existing loan.
- Pag-IBIG HELPs loan is distinct from housing and calamity loans.
- Reapplication after TAV offset only allowed after 2 years; no replenishment of TAV after offset.
- Upon membership termination, outstanding loans become due and deducted from TAV.
Issue Resolution
- Issues resolved by Department Manager III or escalated to higher authorities.
Amendments
- Senior Management can amend guidelines within the program's objectives and Pag-IBIG mandate.
Effectivity
- Guidelines effective once the program is available.