Housing fund sees higher profits with proposed tax exemption

MANILA, Philippines - Home Development Mutual Fund, the government-controlled firm that offers low-interest housing loans, expects earnings to jump by over 30 percent when a proposed bill exempting it from paying income tax is enacted into law. The company, also known as Pag-ibig Fund, said net income this year is expected to hit P8 billion, only 8.1 percent higher than last year's P7.4 billion profit. Pag-ibig President and Chief Executive Romero S. Quimbo said the housing fund can book as much as at P10.5 billion to P11 billion in 2009. The House of Representatives committee of ways and means this week approved a consolidated bill that would exempt Pag-ibig from paying the 35 percent corporate income tax. Exemption from the said tax would allow Pag-ibig to increase the dividends to its seven million members from the government and private sectors. Pag-ibig Fund was exempted from paying income tax since its creation in 1980 until 1987 when an executive order lifting the exemption was issued by Malacañang. Quimbo said Pag-ibig Fund has remitted P10 billion worth of taxes but only received less than P5 billion in subsidies over the last five years. Pag-ibig Fund's total assets stood at P202.63 last year, up 5.95 percent from P191.24 billion in 2006. - GMANews.TV