Members earn 5.62% dividend rate on Regular Savings, 6.12% on MP2
Pag-IBIG Fund posted a net income of over P30 billion in 2020 for the fourth consecutive year despite the economic slowdown caused by the pandemic, its top executives announced during the 2020 Pag-IBIG Fund Chairman’s Report held online Wednesday (March 03).
“I’m happy to report that our net income reached P31.18 billion last year, marking the fourth consecutive year that Pag-IBIG Fund’s net income surpassed the P30-billion mark. Pag-IBIG Fund’s strong showing despite the pandemic is a testament of how well the Filipino workers’ fund is managed. And, as we continue to support the call of President Rodrigo Duterte for government agencies to provide more social benefits to more Filipinos, we are giving back P29.40 billion, around 94% of our net income, to members in the form of dividends,” said Secretary Eduardo D. del Rosario who heads the Department of Human Settlements and Urban Development and the 11-member Pag-IBIG Fund Board of Trustees.
Under Pag-IBIG Fund’s charter, the agency is required to declare at least 70% of its annual net income as dividends which shall be credited proportionately to its members’ savings. However, the Pag-IBIG Fund Board approved to declare 93.68% of its earnings – more than what its charter requires and the highest in the agency’s history– to extend the most benefit to its members especially during these difficult times, del Rosario added.
With this move by its board, del Rosario also stated that members will enjoy a higher-than-expected return on their Pag-IBIG savings. He said that the year 2020 dividend rate for the Pag-IBIG Regular Savings shall be at 5.62%, while the Modified Pag-IBIG 2 (MP2) Savings shall be at 6.12%.
“Again, we have achieved yet another ‘highest ever’ in 2020. With dividends payout set at 93.68% of our P31.38 billion net income exclusive of net foreign exchange loss, it’s the highest dividend payout ratio in Pag-IBIG’s history. It’s also the highest dividend payout ratio our Pag-IBIG Fund Board can declare while still maintaining our target Capital Adequacy Ratio. Considering the challenges that we faced last year, achieving over P31 billion in net income is an achievement in itself. With such earnings and the dividend approval by our Board, we are extending the most benefit to our members without risking the strong financial standing of the Fund, especially during these difficult times,” said Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti.
According to Moti, Pag-IBIG Fund maintains a Capital Adequacy Ratio (CAR) of 15%, which is higher than the 10% threshold set by the Bangko Sentral ng Pilipinas (BSP) for the banking industry. Even if Pag-IBIG is not regulated by the BSP, Moti said that the agency voluntarily maintains a high CAR which includes a buffer to account for current economic challenges, to protect the funds of its members and to maintain the agency’s financial stability.
He also thanked borrowers who continued to pay their loans last year, despite the economic slowdown. In 2020, home loan payments reached P46.65 billion, while cash loan payments totaled P56.17 billion enabling the agency maintain its strong fiscal position.
“We would like to thank our borrowers for continuously honoring their loan obligations despite the pandemic. The strong financial standing of Pag-IBIG is a good sign because this allows us to continue funding our members’ home loans and cash loans, especially now when these are needed the most. By fulfilling their obligations, they are helping Pag-IBIG Fund bring needed service to other members, while continuing to stimulate the housing industry and the economy. As we brave the months ahead, we assure our members and stakeholders that we will remain a reliable institution that they can count on, which is what we have been doing every year in the last 40 years,” Moti added.