Under the TRAIN Law, 99 percent of taxpayers have been paying a lower tax rate since 1 January 2018.

Owning a house is no longer a dream for an increasing number of Pinoys.

The Tax Reform for Acceleration and Inclusion (TRAIN) Law has propped up voluntary contributions of members of the Home Development Mutual Fund or Pag-IBIG Fund, and thus spurred home purchases among small earners as their disposable income increased.

Under the TRAIN Law, 99 percent of taxpayers have been paying a lower tax rate since 1 January 2018. Only individuals earning P8 million and above annually pay a higher tax under the progressive schedule.

The TRAIN Law, which was pushed by the Duterte administration to boost the economy, was implemented on January 2018.

It also raised the threshold of exemption for personal income tax, which totals P250,000 per person a year under the law.

Pag-IBIG Fund chief executive officer (CEO) Acmad Rizaldy Moti during Tuesday’s “Straight Talk with Daily Tribune,” explained the TRAIN Law or Republic Act 10963 provided more liquidity to Filipino workers that prompted them to increase their contribution.

“When the TRAIN Law was implemented, most workers found excess liquidity in their pockets ranging from P5,000 to P8,000. So, they upgraded their contributions even without counterpart from their employers,” Moti said.

The Pag-IBIG CEO shared that for 2018, the Pag-IBIG Fund registered its highest ever collection of P40.27 billion from its 14 million members.

Part of the record-breaking collection in 2018 was the P4.5 billion voluntary contribution.

“We have done all of these in support of PRRD’s (President Rodrigo Roa Duterte’s) directive of uplifting the lives of the Filipino workers,” Moti pointed out.

He bared that Pag-IBIG Fund already surpassed the amount for the first six months of 2019 when it recorded a total P4.6 billion in voluntary contribution.

“Probably, we can reach P9 billion to P10 billion this year. So, nothing beats that. Voluntarily members are putting their money with Pag-IBIG Fund,” he added. “The public trust is there.”

Pag-IBIG chief Acmad Rizaldy Moti credited the tax reform program for a resurgent demand for housing among Filipinos. J. DODSON

The Pag-IBIG official said the 2018 dividends for voluntary savings went up to 7.41 percent higher than the 6.91 percent in 2017.

He said during the past three years, the Pag-IBIG Fund has been declaring from 85 percent to 95 percent in dividends payout.

“We say 2018 was our best year ever so far, because we feel 2019 might even be better than last year,” Moti said.

Under the law, the Pag-IBIG Fund is mandated to run a provident savings program for members and to deploy funds collected to finance housing loans.

Moti noted that since 2012, the fund consistently grew by an average of P2 billion per year until 2017 when it grew to P3.5 billion. Last year, it hit P4 billion.

“Our source of pride is from the voluntary side,” he explained, pointing also to the Modified Pag-IBIG 2 or M2 savings program that attracted members.