MANILA, Philippines -- A bill exempting the PAG-IBIG Fund from paying taxes has been approved by a panel at the House of Representatives.

On a motion by Makati Representative Teodoro Locsin Jr., the committee on ways and means chaired by Antique Representative Exequiel Javier unanimously passed on Tuesday the still unnumbered consolidated bill that would increase the dividends of seven million PAG-IBIG members both from the private and government sectors.

The bill will now be transmitted for plenary debates and approval.

During the hearing, PAG-IBIG president and chief executive officer Romero Quimbo lamented that if not for the taxes, the institution would have “dramatically” increased the dividends of its members.

“In fact last year, we distributed 85 percent of our net income. Had we had the tax exemption last year, we would have distributed not just 85 percent of the P7.4 billion that we made last year but we would have been able to distribute 85 percent of the 9.4 billion that we could have made,” Quimbo told the committee.

“It would have dramatically increased the dividends that we could have given out because if there’s any affect here, the effect here is that we would be able to increase the dividends that we will be distributing,” he pointed out.

Quimbo said the institution was also double-taxed since its source of funds comes from ordinary workers, whose income has also been taxed.

“So it really amounts to double taxation more than anything else,” he said.

When PAG-IBIG was created in 1980, the agency was exempted from taxes until 1987 when an executive order was issued lifting that exemption.

But Quimbo said the Department of Finance has been giving the agency tax subsidy for the past seven years now.

“In fact, while we’re not a tax institution, the DOF has been kind enough to actually grant us tax subsidy in complete recognition of the fact that the taxes that we pay are better off being remobilized back into housing,” he said.

But what was more important, Quimbo said, was that the tax exemption would not go to the coffers of the institution since it was mandated by law to distribute 70 percent of its net income to its members.