Home Development Mutual Fund/Pag-IBIG Fund(HDMF)

16 October 2023 Dear MR. JOSHUA SIO, This refers to your eFOI request received on 25 September 2023 sent via the eFOI portal of the Home Development Mutual Fund (Fund) wherein you inquired about the legal basis for conducting inspection raising therein the following questions: 1. Is a regular inspection conducted to determine the employer's compliance with HDMF provisions, especially on registration, contribution, and remittance? 2. In relation to #1, what drives/triggers initiation and carrying out an inspection to determine an employer's compliance? 3. What is the legal basis for issuing an order to inspect determining employer's compliance? We deemed it proper to raise this matter to the Operating Units Concerned (OUC) – Member Services Support Unit. As provided by the OUC, kindly find below the responses to the aforementioned inquiries: 1. Q: Is a regular inspection conducted to determine the employer's compliance with HDMF provisions, especially on registration, contribution, and remittance? A: Yes. 2. Q: In relation to #1, what drives/triggers initiation and carrying out an inspection to determine an employer's compliance? A: For Unregistered Employers On a quarterly or semi-annually basis, the Fund secures from the Business Permit and Licensing Office (BPLO) the list of registered business/es in the Local Government Unit concerned. Thereafter, the Fund verifies if the name of the businesses/Employer in the list provided by the BPLO is registered with the Fund. Thereafter, should there be findings that the employer is unregistered, the Fund shall prepare a list of the same to generate a “Reminder of Fund Coverage”. Within fifteen (15) days from the issuance of the Reminder notice, the Fund will monitor the employer’s compliance therewith. For Delinquent Employers Using its system, the Fund shall verify the remittance made by the employer. For employers without remittances, the Fund shall thereafter generate a “Reminder of Fund Coverage”. Within fifteen (15) days from the issuance of the notice, the Fund will monitor the employer’s compliance therewith. Thereafter, a Demand Notice shall be issued for non-compliant employers. For non-compliant employers, a Notice of Endorsement to Collection Agency (NECA) shall be issued to the Employer and the account shall be endorsed to a Collection Agency. For hard accounts with more than three (3) months in arrears on the remittance of provident obligation and returned by Collection Agency, a visitorial enforcement shall be conducted by the Fund. 3. What is the legal basis for issuing an order to inspect determining employer's compliance? In accordance with Republic Act No. 9679 (RA 9679) and its Implementing Rules and Regulation (IRR), each employer is mandated to promptly notify the Fund of specific details concerning their covered employees. This includes information such as their names, ages, civil status, occupation, salaries, and the number of dependents (Section 24). Likewise, Sections 5 and 6 of the IRR of RA 9679 provides for the mandatory registration of employers with the Fund prior the start of its business operations and the duty of all employers to register all their employees subject of mandatory coverage. Thus, in order to determine the employer’s compliance with the provisions of the law the Fund or its duly authorized representative is empowered to inspect the premises, books of accounts and records of any person or entity covered by the law. The Fund can also require the regular submission of reports and take action against any violations of the law's provisions (Section 27). In compliance with Section 6.6.1 of the Anti-Red Tape Authority (ARTA) Memorandum Circular No. 2019-002, series of 2019 entitled Guidelines on the Implementation of the Citizen’s Charter in Compliance with Republic Act 11032, otherwise known as the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018,” and Its Implementing Rules and Regulations, may we kindly request your thoughts or feedback on how we can improve your experience by filling out the Feedback Form in this link: https://forms.office.com/r/A652CzriXW Thank you. ATTY. JOSE ROBERTO F. PO Department Manager III, Legal Department and Deputy Compliance Officer