Policy purpose and scope
- The guidelines are issued to encourage delinquent employers to register with the Fund and/or collect and remit the mandated membership contribution and employer counterpart.
- The guidelines cover unregistered employers that will register by a specified deadline.
- The guidelines cover denied waiver applicants that refuse or fail to register.
- The guidelines cover employers already registered that fail to collect employee contributions and remit employer counterpart.
Coverage limits and exclusion rules
- Coverage includes unregistered employers if they register with the Fund on or before the last working day prior to December 31, 2009.
- Coverage includes employers whose applications for waiver from Fund coverage have been denied but who failed or continued to refuse registration.
- Coverage includes employers duly registered with the Fund but who did not collect contributions from their employees and did not remit employer counterpart.
- Coverage excludes employers who collected membership contributions and/or STL amortization payments from employees but failed to remit the same; such employers must pay:
- all unremitted membership contributions, including the employer counterpart, plus corresponding penalty charges from the time the employees should have been covered; and
- all STL amortization payments deducted from employees but not remitted.
- Penalties incurred by employees due to non-remittance are charged to the employer and are credited to the member as TAV thereafter.
- If the excluded employers cannot immediately pay the entire amount due, they may pay under a plan of payment acceptable to the Fund.
- If excluded employers have coverable employees from whom they did not collect membership contributions, they may apply for penalty condonation under these guidelines for those particular employees who are still under their employ.
- If the employer failed or refused to comply within thirty (30) days from demand, the employer shall be criminally prosecuted under PD 1752, as amended.
Application for penalty condonation
- Eligible employers must submit a letter signifying their request for penalty condonation.
- Section 2.1 recognizes the following grounds for granting penalty condonation:
- Financial difficulty to meet the statutory obligation under PD 1752, as amended, meaning remittance of required contributions affects business operations.
- Failure of the concerned official to register covered employees and/or remit required contributions under PD 1752, as amended, where the failure has not been brought to the knowledge of higher management.
- Coverage under PD 1752, as amended has been unsuccessfully contested in court.
- Other grounds/reasons acceptable to the Board of Trustees.
- The filing deadline for the application is the last working day before December 31, 2009.
Substantive conditions for condonation
- Eligible employers must remit:
- all unremitted employer contributions from the time their current employees should have been covered up to the point of approval of the application; and
- the employee and employer contributions due for the current remittance period, to be collected and remitted to the Fund.
- All penalty charges incurred by the employer from the first month of delinquency up to the point of approval of the application are condoned if the employer remits total obligations due within thirty (30) days from approval.
Payment plan, PDCs, and timing rules
- If the employer is financially incapable of remitting in full, the employer may submit a plan of payment for approval by the Fund within seven (7) calendar days from approval of the application.
- The plan of payment must comply with the following requirements:
- The settlement period shall not exceed twenty four (24) months.
- Condoned penalties are proportional to downpayments made under the approved plan.
- The remaining balance (arrearages and uncondoned penalties) earns interest of one percent (1%) per month.
- The employer must issue the corresponding number of PDCs to cover the approved plan.
- Payments must commence exactly one month from the date of approval of the penalty condonation application.
- If the employer signified intent to pay in full but fails to do so within thirty (30) calendar days from approval, the employer is given another seven (7) calendar days to submit a plan of payment acceptable to the Fund.
Consequences of default and restored penalties
- Any violation of the approved plan of payment, by defaulting or short-remitting, results in:
- restoration of penalties previously condoned, and
- filing of appropriate civil and/or criminal actions against the delinquent employer.
- If the employer fails to collect and/or remit employee and employer contributions due for the current period, the employer is charged a three percent (3%) penalty for every month of delay.
Reporting and endorsements
- Pag-IBIG Fund operating units must submit monthly reports on penalties condoned to the Senior Vice President for Provident Operations.
- The SVP-Provident Operations must endorse the consolidated report to the Board of Trustees.
Criminal liability and continued penalties
- Non-compliance with these guidelines keeps penalties accruing on the employer’s unremitted contributions and subjects the employer to criminal liability and prosecution under PD 1752, as amended for the following acts:
- failing to register with the Fund before December 31, 2009;
- failing to submit a plan of payment within seven (7) calendar days from approval;
- failing to pay in full after signifying intent to pay in full, and then failing to submit a plan of payment within seven (7) calendar days; and
- continuing to refuse to collect and/or remit membership contributions and employer counterpart.
Effect on employee membership coverage
- The effectivity of an employee’s membership registered by the delinquent employer is based on the date of the employee’s initial PFR.
- For members with previous deductions but not remitted, membership commences on the date the actual remittance should have been made.
Amendments, repeal, and internal governance
- The guidelines may be amended, revised, or modified by the Pag-IBIG Fund Senior Management Committee in furtherance of the program’s objectives, provided amendments remain consistent with the Fund’s charter and existing laws.
- All rules, regulations, policies, orders, and issuances contrary to or inconsistent with these guidelines are repealed or modified accordingly.