HDMF (Pag-IBIG FUND) CIRCULAR NO. 332, October 29, 2013

GUIDELINES IMPLEMENTING THE Pag-IBIG HEALTH AND EDUCATION LOAN PROGRAMS (Pag-IBIG HELPs)

National Administrative Register October 29, 2013
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Pursuant to the approval of the Pag-IBIG Fund Board of Trustees
during its 295th meeting held last 2 July 2013, the “Guidelines
Implementing the Pag-IBIG Health and Education Loan Programs (Pag-IBIG
HELPs)” is hereby issued:

I. OBJECTIVES

The program aims to:

  1. Provide additional benefits to members by extending financial
    assistance in payment for educational and health related expenses of the
    member and/or his beneficiaries.
  2. Extend goodwill to our members.

II. COVERAGE

These guidelines shall cover all Pag-IBIG I members.

III. DEFINITION OF TERMS

For the purpose of implementing this program, the following terms shall be defined as follows:

  1. Actual Need shall refer to 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.
  2. An Active Member shall refer to a member with at least five (5)
    monthly mandatory savings within the last six (6) months prior to date
    of application.
  3. Beneficiary shall refer to a person who shall benefit from the
    loan proceeds that will be released under the Pag-IBIG HELPs in payment
    for products and services offered by the educational or medical
    institution, or Health Maintenance Organizations (HMOs).
  4. Desired Loan Amount shall refer to the amount indicated in the loan application form.
  5. Discount/Rebate shall refer to the amount allowed by the
    partner-merchant to be deducted from the assessed costs of products or
    services that it will provide.
  6. Educational Expenses shall refer to total fees charged by an educational institution indicated in the assessment form.
  7. Equated Monthly Installment (EMI) shall refer to the installment amount to be paid by the borrower.
  8. Financial Aid/Grant shall refer to financial assistance or
    support provided by: Partner schools’ scholarship programs, Government
    Scholarship Grant (DOST, LGUs, etc), PhilHealth, PCSO, etc.
  9. Healthcare Plan shall refer to any plan or organized format for
    delivering health care services, such as but not limited to 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.
  10. Maintenance Medication shall refer to medical treatment with
    medication on a regular basis for a chronic or long-term medical
    condition.
  11. Medical Expenses shall include costs of diagnosis, treatment and
    other forms of health care of patients, including but not limited to,
    doctor’s fees, fees for clinical and ancillary services rendered,
    charges for room, meals, medical supplies, medicines, and payments for
    use of equipment.
  12. Partner-merchant shall refer to the accredited educational and
    medical institution, and health maintenance organizations by the Fund.
  13. Total Accumulated Value (TAV) shall refer to the sum of the
    mandatory member’s savings and employer’s counterpart, when appropriate,
    and the corresponding dividends credited thereto.

IV. LOAN PURPOSE

To provide loan facility to Pag-IBIG members in payment for the following:

  • Educational Expenses;
  • Medical Expenses; and/or
  • Healthcare Plan from HMOs accredited by the Fund.

V. BORROWER ELIGIBILITY

A Pag-IBIG Member may avail of the Pag-IBIG HELPs, provided he satisfies the following:

  1. Has at least twenty-four (24) monthly mandatory savings (MS);
  2. An active Pag-IBIG member at the time of application;
  3. If with Pag-IBIG Housing Loan, the account must be updated as of date of application; and
  4. If with existing MPL and/or Calamity Loan, the account/s must be updated as of date of application.

VI. LOAN AMOUNT

A qualified borrower shall be entitled to the lowest of the following:

1.
Loan Entitlement

Equivalent to ninety percent (90%) of TAV less outstanding balance on MPL and/or Calamity Loan, if any.
2.
Capacity to Pay

An eligible borrower’s loan shall be limited to
an amount for which statutory deductions, monthly repayment of
principal and interest, and other obligations will not render 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.

The member’s net take home pay refers to the
member’s monthly compensation net of statutory deductions, other
authorized deductions, outstanding loan obligations, and computed
monthly repayment for loan being applied for. Statutory deductions shall
refer to income tax withheld as well as contributions/premiums for
GSIS/SSS, Pag-IBIG and PhilHealth.
3.
Actual Need; or
4.
Desired loan Amount

VII. INTEREST

The loan shall be charged an interest based on the full risk based pricing framework.[1]

VIII. LOAN PERIOD

The loan shall be repaid over a period of six (6) months or
twelve (12) months at the option of the borrower, with two (2) months
grace period.

IX. LOAN RELEASE

The loan proceeds shall be released through check payable to the
Partner- Merchant for the account of the beneficiary of the Pag-IBIG
HELPs.

If the provider is not a Partner-Merchant, check shall be payable to the borrower.

X. LOAN PAYMENTS

  1. The loan shall be paid in equal monthly installments in such
    amounts as may fully cover the principal and interest over the loan
    period. Said amortization shall be made, whenever feasible, through
    salary deduction.
  2. In instances where salary deduction is not feasible, loan
    amortization payments to Pag-IBIG Fund shall be made through any of the
    following modes:

    2.1 Over-the-Counter;
    2.2 Thru accredited collection partners; and
    2.3 Other modes that may be approved by Pag-IBIG Fund in the future.
  3. Promissory Note/Agreement Number must be indicated in the remittance form or Pag-IBIG Fund Receipt (PFR).
  4. Payments shall be remitted to the Pag-IBIG Fund on or before the fifteenth (15th) day of the third (3rd) month following the DV/check date.
  5. The borrower may fully pay the outstanding balance of the loan prior to loan maturity.
  6. The borrower shall pay directly to Pag-IBIG Fund or its
    accredited collecting agents in case the borrower is unable to pay
    through salary deduction due to any of the following circumstances, such
    as but not limited to:

    6.1
    Suspension from work;
    6.2
    Leave of absence without pay;
    6.3
    Insufficiency of net take home pay at any time during the term of the loan;
    6.4
    In case of resignation or termination,
    wherein outstanding balance is not fully settled by the separation pay;
    provided, an agreement has been made between the employer and the
    borrower to effect the deduction of the loan amortization payments from
    the separation pay.

    XI. PENALTIES

  1. A penalty of one-twentieth of one percent (1/20 of 1 %) of any
    unpaid amount shall be charged to the borrower for every day of delay.
  2. For borrowers paying through salary deduction, upon presentation
    of proof that non-payment was due to the fault of the employer,
    penalties due from the borrower shall be charged to the employer. Non-remittance
    of the total loan amortization shall likewise subject the employer with
    an additional penalty of one-tenth of one percent (1/10 of 1 %) per day
    of delay of the amounts payable from the date the loan amortization
    fall due until paid.

XII. APPLICATION OF PAYMENTS

  1. Payments shall be applied according to the following order of priorities:

    1.1 Penalties; if any
    1.2 Interest; and,

    1.3 Principal.

  2. Any amount in excess of the required EMI shall be applied to future amortization when due.

XIII. DEFAULT

The borrower shall be in default in any of the following cases:

  1. Any willful misrepresentation made by the borrower in any of the documents executed in relation thereto;
  2. Failure of the borrower to pay any three (3) consecutive EMls;
  3. Failure of the borrower to pay any three (3) consecutive MS;
  4. Default in an outstanding Pag-IBIG MPL and/or Calamity Loan; or,
  5. Violation by the borrower of any policies, rules, regulations and guidelines of Pag-IBIG Fund.

XIV. EFFECTS OF DEFAULT

In the event of default, the outstanding loan obligation shall
become due and demandable. Likewise, the outstanding loan obligation
from MPL and/or Calamity Loan shall also become due and demandable. Said
loan obligations shall be deducted from the TAV credited to the
borrower after exerting all collection efforts prove unsuccessful.

XV. OTHER PROVISIONS

1.
Number of Borrowers

A maximum of three (3) qualified Pag-IBIG members may apply for separate Pag-IBIG HELPs, to benefit a single beneficiary.
   
2.
Multiple Employers
     
2.1
An eligible member who is an
active member under more than one employer shall have only one
outstanding Pag-IBIG HELPs at any given time.
2.2
At point of application, the member shall choose which employer shall deduct and remit his Pag-IBIG HELPs EMI.
   
3.
Aside from submitting a duly
accomplished application form, the borrower shall be required to submit
additional documents corresponding to the loan purpose:
     
3.1
For Educational Expenses

– An assessment form or its equivalent (in original copy) from the educational institution.
3.2
For Medical Expenses

– Statement of account / hospital bill, net of PhilHealth and discounts.
3.3
For maintenance medication:

– A quotation from the company or drug store; and
– Prescription issued by the physician concerned.
3.4
For Healthcare Plan from accredited HMO

– An assessment form from the accredited HMO
4.
Loan Renewal
     
4.1
For loans with a repayment term of six (6)
months, the borrower may be allowed to renew his Pag-IBIG HELPs upon
payment of at least four (4) posted EMI.
4.2
For loans with a repayment term of twelve
(12) months, the borrower may be allowed to renew his Pag-IBIG HELPs
upon payment of at least eight (8) posted EMI.
4.3
The proceeds of the new loan shall be
applied to the borrower’s outstanding Pag-IBIG HELPs obligation and the
net proceeds shall then be released to the partner-merchant.
   
5.
The Pag-IBIG HELPs shall be treated as a separate and distinct loan facility from the MPL and/or Calamity Loan.
   
6.
Availment of Pag-IBIG HELPs after TAV Offsetting

If TAV offsetting has been effected on the
borrower’s defaulting Pag-IBIG HELPs, he may apply for a new Pag-IBIG
HELPs after two years from date of TAV Offsetting.

Replenishment of the member’s TAV after offsetting of the Pag-IBIG HELPs shall not be allowed.
   
7.
Membership Termination
     
7.1
In the event of membership termination prior to loan maturity, the outstanding loan obligation shall become due and demandable.
     
7.2
The outstanding loan obligation shall be deducted from the TAV of the borrower.

XVI. ESCALATION OF ISSUES

Any issue in the interpretation and implementation of these
guidelines shall be resolved by the Department Manager III concerned or
shall be escalated to the next higher approving authorities.

XVII. AMENDMENTS

Senior Management may amend, modify or revise certain provisions
of these guidelines, provided the amendments, modifications, and
revisions thereof are in furtherance of the objectives of this program
and consistent with the mandate of the Pag-IBIG Fund under its charter
and existing laws.

XVIII. EFFECTIVITY

These guidelines shall take effect upon availability of the program.

ATTY. DARLENE MARIE B. BERBERABE
Chief Executive Officer

[1]
Full Risk Based Pricing Framework refers to the model used by the Fund
to determine pricing or interest rates for its Programs or Products
which covers base rate, cost of servicing and administering, reasonable
margin, expected loss and use of capital.

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