The Home Development Mutual Fund, commonly known as Pag-IBIG, plans to finance more than 700,000 housing units under the Marcos administration as it banks on its low interest rates.
Pag-IBIG CEO Marilene Acosta said the agency’s business model remains on track, but it plans to increase the number of homes that it will fund over the next six years.
“We intend to finance at least 708,000 housing units. This is an increase of about 33 percent from the 531,000 units that we financed during the past administration,” Acosta said.
“We will continue to extend affordable interest rates for our Pag-IBIG members. As of now, we offer the lowest rate at three percent,” she said.
Under the Pag-IBIG’s Affordable Housing Program, eligible borrowers have a special subsidized rate of three percent per annum for home loans of up to P580,000 for socialized subdivision projects.
Standing out as the lowest interest in the loan market, Pag-IBIG first offered the subsidized rate five years ago to help more members, particularly those from the minimum-wage sector, have their homes.
Pag-IBIG managed to maintain the three percent rate steady due to the program’s tax exempt status under the Pag-IBIG Fund Law of 2009.
Amid rising inflation that leads to higher interest rates globally and locally, Acosta admitted that it’s difficult to maintain such rate, but it can be done by making sure that the housing finance is sustainable.
“Simply if we lend, we should be able to collect. What we lend are the collections or savings of our members, which we return to them upon maturity,” Acosta said.
To meet its target over the next six years, Pag-IBIG plans to intensify its countryside housing initiative, which is similar to a public-private partnership where the agency encourages stakeholders, local government units, cooperatives, and developers to come up with housing units in the countryside.
“Countryside does not only mean in the rural areas, but also underserved areas. Like in Metro Manila, there is a low production of socialized housing units,” Acosta said.
She explained that production of socialized units is low because developers believe these are not profitable.
“That’s why we are pushing for the initiative. LGUs can come up with their own housing projects that can afford lower packages. We can provide them with developmental loans and later on take out the housing units,” Acosta said.
For this year, Pag-IBIG is targeting to release as much as P110 billion in home loans. As of end-September, the agency has so far released P83 billion.
In terms of savings, Pag-IBIG aims to collect some P70 billion, of which 50 percent will come from its Modified Pag-IBIG 2 Savings (MP2), a voluntary program for members.
Pag-IBIG has 14 million active members and has P800 billion in total assets which is expected to reach P1.5 trillion by 2028.
Source: Philstar