I. Introduction to Pag-IBIG Employer Obligations

The Pag-IBIG Fund, formally known as the Home Development Mutual Fund, is a government-owned and -controlled corporation established under Republic Act No. 9679, otherwise known as the Pag-IBIG Fund Law of 2009. This statute mandates compulsory membership and contributions from all employees and their employers in the private sector, as well as certain public sector workers, to provide housing loans, short-term loans, and savings programs.

Employers play a pivotal role in the system. Under Section 9 of RA 9679 and its Implementing Rules and Regulations (IRR), every employer must register with the Pag-IBIG Fund within thirty (30) days from the date of registration with the Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI), or other appropriate regulatory body. Once registered, employers are required to:

Deduct employee contributions from salaries and wages;
Remit both employee and employer shares monthly, together with the prescribed penalties for late remittance if applicable;
Submit the Monthly Remittance Report (MRR) or its electronic equivalent through the Pag-IBIG Employer’s Portal; and
Maintain accurate records of employee data, including membership numbers, salaries, and contribution histories.

Failure to comply with these reporting and remittance requirements exposes employers to civil liabilities, administrative fines, and potential criminal prosecution under Section 23 of RA 9679, which imposes penalties of up to six (6) years imprisonment and/or a fine of not less than Ten Thousand Pesos (₱10,000.00) but not more than One Hundred Thousand Pesos (₱100,000.00), or both, at the discretion of the court.

In practice, however, not all registered employers maintain continuous operations. Seasonal businesses, start-ups that have not yet commenced trading, corporations undergoing reorganization, firms that have temporarily suspended operations due to force majeure, or entities that have completely ceased business activities often find themselves with zero employees and zero payroll during specific periods. To address this reality without triggering automatic penalties, the Pag-IBIG Fund accepts the Affidavit of No Operation (sometimes referred to as Affidavit of Non-Operation or Declaration of Zero Remittance) as a compliant substitute for the regular monthly remittance report.

II. Legal Basis and Regulatory Framework

The acceptance of an Affidavit of No Operation is rooted in the general principles of administrative due process and the discretionary authority granted to the Pag-IBIG Fund Board under Section 6 of RA 9679, which empowers the Fund to prescribe rules and regulations necessary to carry out the provisions of the law. While RA 9679 itself does not explicitly mention the affidavit, the IRR and subsequent circulars issued by the Pag-IBIG Fund Management have institutionalized the document as part of the employer compliance toolkit.

This mechanism aligns with parallel requirements in other social security agencies. The Social Security System (SSS) under Republic Act No. 11199 (Social Security Act of 2018) and the Philippine Health Insurance Corporation (PhilHealth) under Republic Act No. 11223 (Universal Health Care Act) similarly accept affidavits of no operation or zero contribution declarations. The Pag-IBIG Fund’s policy ensures uniformity across the “SSS-PhilHealth-Pag-IBIG” tri-agency reporting ecosystem, preventing employers from being caught in conflicting compliance regimes.

The affidavit serves as prima facie evidence that no employer-employee relationship existed during the covered period, thereby extinguishing the legal obligation to remit contributions for that month or quarter. It also protects the employer from the automatic imposition of surcharges and penalties under Pag-IBIG Circular No. 001, Series of 2010 (as amended), which otherwise applies to late or non-remittance.

III. When an Affidavit of No Operation Is Required or Appropriate

An employer may or may not be strictly “required” to submit the affidavit in every instance of inactivity; however, it is the recommended and accepted practice to avoid adverse records in the Pag-IBIG Employer Compliance Monitoring System. The affidavit is typically utilized in the following scenarios:

Newly Registered but Non-Operational Employers – Entities that have secured their Employer Registration Number (ERN) but have not yet hired employees or commenced business activities.
Temporary Suspension of Operations – Companies that have shuttered due to economic downturns, natural calamities, pandemic-related lockdowns, or internal restructuring, with no payroll processed for one or more months.
Seasonal or Project-Based Employers – Construction firms, agricultural enterprises, or event organizers whose workforce is engaged only during specific months.
Complete Cessation or Dissolution – Corporations that have filed for dissolution with the SEC or DTI and no longer maintain any workforce.
Zero-Employee Periods – Sole proprietorships or partnerships that operate without hired employees (owner-managed only).
Annual or Periodic Reconciliation – During employer account audits or when updating the Pag-IBIG Employer’s Portal status.

Submission is generally required for each month of non-operation if the employer wishes to maintain an active and compliant status. Some regional Pag-IBIG branches allow quarterly or semi-annual consolidation of affidavits for long-term inactivity, subject to the branch manager’s discretion.

IV. Essential Contents of a Valid Affidavit of No Operation

A legally sufficient Affidavit of No Operation must adhere to the formalities prescribed under Rule 132, Section 19 of the Revised Rules on Evidence (as amended) and the Notarial Rules of 2004 (A.M. No. 02-8-13-SC). The document is executed under oath before a notary public, a judge, or an authorized Pag-IBIG officer.

Typical mandatory recitals include:

Full corporate or business name, Employer Registration Number (ERN), Tax Identification Number (TIN), and principal office address;
Name, position, and authority of the affiant (usually the President, General Manager, or duly authorized Human Resource Officer);
Clear declaration that the business has not operated and has maintained zero employees during the specific period (e.g., “for the month of January 2026” or “from January 1, 2026 to March 31, 2026”);
Statement that no salaries or wages were paid, no employer-employee relationships existed, and consequently no Pag-IBIG contributions became due and payable;
Undertaking to notify the Fund immediately upon resumption of operations and to submit the corresponding remittance reports and contributions without delay;
Certification that the affidavit was executed freely and voluntarily and that the affiant has read and understood its contents;
Jurat clause with the notary’s signature, seal, and notarial commission details.

Supporting documents commonly attached are:

Latest SEC/DTI registration papers or Certificate of Incorporation/Registration;
Latest General Information Sheet (GIS) or Business Permit showing current status;
Proof of business closure or suspension (e.g., Mayor’s Permit indicating “closed” status, Board Resolution authorizing cessation, or DTI/SEC dissolution papers);
Copy of the Employer Registration Form (Pag-IBIG Form E-1) and ERN.

V. Procedural Steps for Filing

Preparation – Draft the affidavit using the employer’s official letterhead. While no official Pag-IBIG-prescribed template exists, branches often provide sample formats upon request.
Notarization – Have the document notarized. Notarial fees are regulated under the Notarial Rules and typically range from ₱100 to ₱500 depending on the locality.
Submission – File the original affidavit together with attachments at the Pag-IBIG branch where the employer is registered. Electronic submission through the Employer’s Portal is increasingly accepted in major branches, with scanned copies uploaded under the “Compliance” or “Declaration” module.
Acknowledgment – The receiving officer stamps the duplicate copy “Received” with date and signature. This stamped copy serves as proof of compliance.
Record Update – Pag-IBIG updates the employer’s account status to “No Operation” for the covered period, suppressing automatic penalty assessments.

VI. Consequences of Non-Submission and Remedies

Failure to submit either the monthly remittance report or the Affidavit of No Operation may result in:

Automatic delinquency status on the employer’s record;
Imposition of 2% per month penalty on any eventual contributions (once operations resume);
Withholding of future loan approvals or benefits for the employer or its officers;
Referral to the Legal Affairs Group for collection or prosecution.

Employers who discover an oversight may still submit a late affidavit accompanied by an explanation letter. In meritorious cases, Pag-IBIG may waive penalties under its authority to condone surcharges, provided the employer demonstrates good faith.

VII. Best Practices and Common Pitfalls

Timeliness – Submit within the same period as the regular remittance deadline (typically the 15th day of the following month, or as extended by circular).
Accuracy – Misstatement of facts in the affidavit may constitute perjury under Article 183 of the Revised Penal Code.
Consistency Across Agencies – Ensure the same declaration is filed with SSS and PhilHealth to avoid inter-agency discrepancies during joint audits.
Retention – Keep notarized copies and stamped acknowledgments for at least ten (10) years, as Pag-IBIG audits may extend retroactively.
Resumption of Operations – Immediately register new employees and resume remittances; failure to do so after declaring resumption may trigger back contributions plus penalties.
Corporate Housekeeping – Pair the affidavit with updated GIS filings and tax returns showing zero gross receipts or operating losses where applicable.

VIII. Sample Affidavit of No Operation (for Illustration Purposes Only)

REPUBLIC OF THE PHILIPPINES)
CITY OF _______________ ) S.S.

AFFIDAVIT OF NO OPERATION

I, ______________________, of legal age, Filipino, with office address at ______________________, after having been duly sworn in accordance with law, do hereby depose and state:

That I am the President/General Manager of ______________________ (Company Name), a corporation duly organized and existing under Philippine laws, with Employer Registration Number (ERN) ______________________;
That the said company has not conducted any business operations and has maintained zero (0) employees during the period from ______________________ to ______________________;
That no salaries or wages were paid to any person and no employer-employee relationship existed during the said period;
That, consequently, no Pag-IBIG contributions became due and payable for the covered months;
That I am executing this Affidavit to attest to the foregoing facts and to support the Company’s compliance with Pag-IBIG reporting requirements;
That I hereby undertake to inform the Pag-IBIG Fund immediately upon resumption of operations.

IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of ___________, 20 at ______________________.

Affiant

SUBSCRIBED AND SWORN to before me this ______ day of ___________, 20 at ______________________, affiant exhibiting to me his/her competent evidence of identity bearing No. ______________________ issued on ______________________ at ______________________.

Doc. No. ______;
Page No. ______;
Book No. __;
Series of 20.

IX. Conclusion

The Affidavit of No Operation is a vital compliance instrument that bridges the gap between strict statutory mandates and the practical realities of business cycles in the Philippines. It embodies the Pag-IBIG Fund’s recognition that not every registered employer maintains perpetual activity. By providing a clear, sworn declaration supported by documentary evidence, employers can protect themselves from unwarranted penalties while upholding the integrity of the national housing fund. Proper and timely use of this document ensures continued good standing with the Pag-IBIG Fund and contributes to the smooth administration of the country’s social security framework. Employers are encouraged to consult their local Pag-IBIG branch or legal counsel for branch-specific nuances, as procedural details may evolve through future circulars.