Vol. XXII, No. 164 ] BusinessWorld Online ]
Monday, March 23, 2009 | MANILA, PHILIPPINES
DAVAO CITY — The Home Development Mutual Fund, also known as Pag-IBIG Fund, is encouraging its members to avail of its housing loans given lower rates for socialized housing and a new condonation program.
Jose W. Banzon Jr., Pag-IBIG vice-president for Southern Mindanao, said only 12% of 470,000 members in the region have availed of housing loans. "We want our members to avail themselves of these loans," he said.
Pag-IBIG has cut the interest rate for socialized housing loans to 6% with a monthly amortization of P2,398 from 7% that required a P2,661 monthly payment. He said the Fund is aggressive in extending loans to its members as part of its commitment to help stimulate the domestic economy.
Mr. Banzon also hoped the new condonation law will also help those having difficulty in paying their mortgages. The new law, Republic Act 9507, gives borrowers the "last opportunity" to pay their loans.
Unlike the previous condonation law, Republic Act 8501 does not require a borrower to pay a processing fee and does not require a down payment. The old law required a processing fee and a 10% down payment.
The new law also condones accumulated penalties and surcharges and does not impose interest on uncondoned interest, which will be paid in equal monthly amortization.
It also imposes the original interest or 12%, whichever is lower, and gives the borrower the flexibility to extend his or her loan to a longer period.
The new law is effective in the next 18 months starting last March 16, although Mr. Banzon said it does not have a provision that imposes a moratorium on the passage of another similar law within a given period.
Government financing institutions such as Pag-IBIG have been given the power to extend the life of the law, he added.
Last month, housing owners held protest actions after a private company that acquired housing loan packages from the National Home Mortgage Finance Corp., a government agency, threatened to eject them from their houses due to defaults on their loans. This prompted Rep. Ana Theresa Risa Hontiveros-Baraquel to propose the investigation of the issue as about 6,000 housing borrowers were affected. — Carmelito Q. Francisco
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