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June 11, 1978, The PAG-IBIG Fund was Established

The establishment of the Home Development Mutual Fund (HDMF), more popularly known as the Pag-IBIG Fund, was an answer to the need for a national savings program and an affordable shelter financing for the Filipino worker.

To address these two basic yet equally important needs, HDMF was established on 11 June 1978 by virtue of Presidential Decree No. 1530 instituting a system of voluntary contributions for housing purposes. The first two “Whereas” clauses of this Decree state that, “a prime concern of the New Society is the quality of human life, which cannot be improved without providing the citizens with sufficient human shelters and structures; …the Constitution of the Philippines, in its Article II, Section 7, mandates that: “The State shall establish, maintain, and ensure adequate social services in the field of . . . housing . . . to guarantee the enjoyment by the people of a decent standard of living..”

Under P.D. 1530, there were two agencies that administered the Fund: The Social Security System handled the funds of private employees, while the Government Service Insurance System handled the savings of government workers. Less than a year after on 1 March 1979, Executive Order No. 527 was signed. The order directed transferring the administration of the Fund to the National Home Mortgage Finance Corporation, which was one of the operating agencies of the then Ministry of Human Settlements.

Seeing the need to further strengthen the stability and viability of the two funds, Executive Order No. 538 was issued on 4 June 1979, merging the funds for private and government personnel into what is now known as the Pag-IBIG Fund. Pag-IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno.

However, It was only on 14 December 1980 when Pag-IBIG was made independent from the NHMFC with the signing of PD 1752, which amended PD 1530. With the improved law in effect, the Fund’s rule-making power was vested in its own Board of Trustees. Likewise, PD 1752 made Pag-IBIG membership mandatory for all SSS and GSIS member-employees.

Sources:

http://www.pagibigfund.gov.ph

http://www.officialgazette.gov.ph

http://www.kahimyang.com

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