PENALTY CONDONATION FOR DELINQUENT EMPLOYERS

To encourage delinquent employers to register with the Fund and/or
collect and remit the mandated membership contribution and employer
counterpart, the following guidelines are hereby issued:

1. Coverage

1.1 These guidelines shall cover the following:

1.1.1 All unregistered employers, provided they register with the
Fund on or before the last working day prior to December 31, 2009;

1.1.2 Employers whose applications for waiver from Fund coverage
have been denied but who have failed or continued to refuse registration
with the Fund; and

1.1.3 Employers duly registered with the Fund but did not collect
contributions from their respective employees and did not remit
employer counterpart.

1.2 Limitation of Coverage

1.2.1 These guidelines shall not include employers who collected
membership contributions and/or STL amortization payments from their
respective employees but failed to remit the same to the Fund.

They shall be required to pay all unremitted membership
contributions, including the employer counterpart, as well as
corresponding penalty charges, from the time the employees should have
been covered by the Fund.

Employers shall also pay all STL amortization payments deducted
from their employees but were not remitted. The penalties incurred by
the employees due to non-remittance shall be charged to the employer and
shall be credited to the member’s TAV thereafter.

1.2.2 If said employers cannot immediately pay the entire amount
due, payments may be made at a plan of payment acceptable to the Fund.

1.2.3 In the event that said 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.

1.2.4 In cases where the employer failed or refused to comply
within thirty (30) days from demand, they shall be criminally prosecuted
in accordance with the penal provisions of PD 1752, as amended.

2. Applications for Penalty Condonation

2.1 Eligible employers shall be required to submit a letter
signifying their request for penalty condonation. The following shall be
considered as grounds for granting penalty condonation to delinquent
employers:

2.1.1 Financial difficulty to meet his statutory obligation under
PD 1752, as amended. Financial difficulty means that the remittance of
the required contributions shall affect the business operations of the
company;

2.1.2 Failure of his concerned official to register the covered
employees and/or remit the required contributions pursuant to PD 1752,
as amended and such failure has not been brought to the knowledge of the
higher management;

2.1.3 Coverage under PD 1752, as amended has been unsuccessfully contested in court;

2.1.4 Other grounds/reasons acceptable to the Board of Trustees.

2.2 The deadline of filing application for penalty condonation shall be on the last working day before December 31, 2009.

3. Penalty Condonation

3.1 Eligible employers shall be required to remit all unremitted
employer contributions from the time their current employees should have
been covered by the Fund up to the point of approval of application. In
addition, they shall be required to collect and remit to the Fund
employee and employer contributions due for the current remittance
period.

3.1.1 All penalty charges incurred by the employer from the first
month of delinquency up to point of approval of application shall be
condoned, provided said employer remit his/her total obligations due
within thirty (30) days from approval of application.

3.1.2 In the event that the employer is financially incapable of
remitting the required contributions in full, the employer may submit a
plan of payment subject to the approval of the Fund within seven (7)
calendar days from approval of application, provided that:

3.1.2.1 The period of settlement shall not exceed twenty four
(24) months. The penalties to be condoned shall be proportional to the
downpayments made by the employer pursuant to his/her approved plan of
payment. The remaining balance, composed of the balance arrearages and
the uncondoned penalties, shall earn an interest of one percent (1%) per
month.

3.1.2.2 The employer shall issue the corresponding number of PDCs to cover the approved plan of payment.

3.1.2.3 Payments shall commence exactly one month from date of approval of application for penalty condonation.

3.1.3 An employer who signified intent to pay in full but failed
to do so within thirty (30) calendar days from approval of application
shall be given another seven (7) calendar days to submit a plan of
payment acceptable to the Fund.

3.2 Any violation of the approved plan of payment, either by
defaulting or short-remitting what is required, shall result in the
restoration of penalties previously condoned and filing of appropriate
civil and/or criminal actions against the delinquent employer. In
addition, should the employer fail to collect and/or remit the employee
and employer contributions due for the current period, the same shall be
charged a three percent (3%) penalty for every month of delay.

4. Pag-IBIG Fund operating units shall submit monthly reports on
penalties condoned to the Senior Vice President for Provident
Operations. The SVP-Provident Operations shall endorse the consolidated
report to the Board of Trustees.

5. Due to non-compliance to these guidelines, the following shall
continue to incur penalties on their unremitted contributions and shall
be held criminally liable and prosecuted in accordance with the penal
provisions of PD 1752, as amended:

5.1 Employers who shall fail to register with the Fund before December 31, 2009;

5.2 Employers who shall fail to submit a plan of payment within seven (7) calendar days from approval of application;

5.3 Employers who signified to pay in full but failed to do so and
after which failed to submit a plan of payment within seven (7)
calendar days;

5.4 Employers who shall continue to refuse to collect and/or remit membership contributions and employer counterpart;

6. The effectivity of the membership of an employee registered by
the delinquent employer shall be based on the date of the said
employee’s initial PFR. However, for members with previous deductions
but were not remitted, their membership shall commence on the date the
actual remittance should have been made.

7. Amendments

These guidelines may be amended, revised or modified by the Pag-IBIG
Fund Senior Management Committee in furtherance of the objectives of the
program, provided that the amendments, revisions of modifications
herein adopted are consistent with the mandate of the Fund under its
charter and existing laws.

8. Repeal

All rules and regulations, policies, orders and issuances contrary
to or inconsistent with these guidelines are hereby repealed or modified
accordingly.

9. Effectivity

These guidelines shall take effect immediately. Please be guided accordingly.

Adopted: 26 May 2009

(SGD.) JAIME A. FABIANA
Officer-in-Charge