(The Philippine Star) Updated August 17, 2009 12:00 AM
MANILA, Philippines - The P172-million advertising spending for the government’s new housing loan program resulted in P78 billion housing loan approvals generated from 2007 to June 2009, said Jaime A. Fabiaña, chief executive of the Home Development Mutual Fund (Pag-IBIG Fund).
At the Senate Committee Hearing chaired by Sen. Miriam Defensor-Santiago Friday, Fabiana said Pag-IBIG’s advertising expenditure is very conservative, “only around one-fifth of one percent measured in terms of the total housing loan approvals.”
Fabiana said Pag-IBIG started to reduce its housing interest rate to as low as six percent in early 2006 but the housing loan approvals “did not pick up” amounting to only P16 billion in 2006. “The actual loan disbursements fell short of Pag-IBIG’s target for the year”.
In December 2007, the Fund launched an aggressive advertising campaign for its new housing loan program to announce its new low interest rates and extended repayment period with Vice President Noli De Castro as endorser.
“Who else should we get? As chairman of the Pag-IBIG Fund, he not only speaks for the institution in its commercials but is duty-bound to advance the housing mandate. VP De Castro is the ideal endorser for our program, as one of the most recognizable personalities in the Philippines, a respected broadcast journalist, and a trusted public figure. He lends his credibility to what he is endorsing, in this case, our housing loan program, “ Fabiaña said.
He also pointed out that De Castro did not receive a single centavo for his services. “Other agencies would pay through the nose just to get an endorser of his caliber and stature.”
In 2008, following Pag-IBIG’s aggressive marketing and advertising campaigns, housing loans jumped to P34 billion, exceeding its housing loan target for the first time. The agency projects that housing loan disbursements will exceed P45 billion this year.
The Fund also posted a 17-percent average growth in housing loan collection. In 2008, its collection reached P20.19 billion, 38 percent higher than the P12.52 billion level in 2005. This year, the Fund projects its housing loan collections to reach P22.34 billion.
Sale of foreclosed assets also soared to over P2.5 billion in 2008, a far cry from the slow pace of disposal in preceding years which only averaged P400 million per year.
Fabiana said the numbers show that the ad campaigns are effective.
“The increase in our collection and housing loan approvals has resulted in greater income for Pag-IBIG—P7.3 billion in 2007, P9.5 billion in 2008, and in 2009, we are on track to make P11.5 billion. This means greater dividends for our members, more funds for housing and better services for our over 7.4 million members worldwide,” Fabiana added.