Vol. XXII, No. 24 [ BusinessWorld Online ]
Thursday, August 28, 2008 | MANILA, PHILIPPINES
Credit restructuring to start in a month
CONGRESS yesterday ratified a measure that would restructure delinquent loans, condone penalties and surcharges, and allow borrowers to keep their homes.
The Socialized and Low-Cost Housing Loan Restructuring Act of 2008 is expected to be signed into law by President Gloria Macapagal Arroyo next week.
The measure would extend the payment period of housing loans contracted from government financial institutions and housing agencies, and in effect lower borrowers’ monthly amortizations.
A bicameral panel last week agreed to put the cap on interest rates on the restructured original principal at 12% or the original rate, whichever is lower, from the proposed 6%.
Accounts qualified for the loan restructuring program are those with three months of unpaid amortizations and where the original principal does not exceed P2.5 million.
The loan restructuring could only be availed only once except in cases of unexpected circumstances affecting the ability of the borrowers to fulfill their financial obligations.
Senator Juan Miguel F. Zubiri, chairman of the Senate committee on urban planning, housing and resettlement and principal author of the Senate version of the bill, said about 300,000 families with houses under foreclosure proceedings would benefit from the law.
"This is a good economic driver and social reform legislation," Mr. Zubiri told BusinessWorld.
Parañaque Rep. Eduardo C. Zialcita, vice-chairman of the House committee on housing and urban development, said an interagency committee headed by the Housing and Urban Development Coordinating Council and composed by agencies involved in the National Shelter Program would draft the new law’s implementing rules.
These agencies include the Home Development Mutual Fund or Pag-IBIG, National Home Mortgage Finance Corp., Social Housing Finance Corp., Home Guaranty Corp. and National Housing Authority.
"We expect [the law’s] full implementation a month from now," he said in a phone interview. — Bernard U. Allauigan and Jhoanna Frances S. Valdez
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