Metro Manila (CNN Philippines, March 3) — Despite a lower net income in 2020 due to the economic impact of COVID-19, Pag-IBIG Fund is raising its dividend payout ratio to its highest yet at nearly 94%.
The state-run corporation, which provides affordable housing loans, on Wednesday said it is declaring 93.68% of its net income in 2020 as dividends, which will be credited proportionately to its members’ savings. The corporation’s total earnings last year reached ₱31.18 billion — the fourth consecutive year its net income exceeded the ₱30-billion mark.
“Again, we have achieved yet another ‘highest ever’ in 2020,” Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy Moti said. “With dividends payout set at 93.68% of our ₱31.18 billion net income exclusive of net foreign exchange loss, it’s the highest dividend payout ratio in Pag-IBIG’s history.”
This ratio beats the previous record of 90% in 2019. However, as Pag-IBIG’s net income in 2020 was down by around 9% from the ₱34.37 billion recorded the year prior, this also means that while the payout ratio is larger, its actual amount is lower.
The 2020 payout ratio translates to ₱29.4 billion given back to members. In 2019, the actual dividend earnings of members stood at around ₱31 billion, which remains to be the biggest in the agency’s history.
Moti said the 93.68% is the highest the Board can declare without risking its strong fiscal standing. Under its charter, Pag-IBIG is mandated to declare at least 70% of its annual earnings as dividends.
For Pag-IBIG Regular Savings members, the 2020 dividend rate will be at 5.62%, its chairman Sec. Eduardo del Rosario said. Meanwhile, members of the Modified Pag-IBIG 2, or the voluntary savings program, will enjoy a dividend rate of 6.12%.
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Although the agency is not regulated by the Bangko Sentral ng Pilipinas, Moti noted they maintain a Capital Adequacy Ratio of 15%, which is higher than the 10% threshold set by the BSP for the banking industry. This 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 added.
Moti also thanked those who continued to pay their loans last year despite financial challenges brought by the pandemic. In 2020, home loan payments hit ₱46.65 billion, while cash loan payments totaled ₱56.17 billion.
“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,” Moti said.
“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,” he added.
