Posted on 11:50 PM, February 24, 2010 [ BusinessWorld Online ]
THE HOME Development Mutual Fund, commonly called the Pag-IBIG Fund, has hiked its allocation for housing loans by 10.5% this year, as it expects more people to tap the fund for their housing needs.
Pag-IBIG Chief Executive Officer Jaime A. Fabiana told reporters on Tuesday that P50.5 billion is available for housing loans this year, up from the P45.7 billion extended to members in 2009.
“We expect an increase in housing loans because of the affordability of the loans and reduced interest rates,” he said in a telephone interview yesterday.
Interest rates of Pag-IBIG housing loans were slashed in April last year with the aim of making the loan program more affordable to members.
Interest rates have been reduced from 10.5% to 8.5% per year for loans of over P750,000 up to P1 million, and to 9.5% per year for loans of over P1 million up to P1.25 million.
“Despite the economic slowdown last year, housing loans increased,” Mr. Fabiana said.
Pag-IBIG housing loans grew by 34% last year from P34 billion in 2008.
“We think housing loans will continue to grow this year,” Mr. Fabiana added.
The Pag-IBIG Fund was formed in 1978 through a presidential decree.
It is mandated to provide affordable housing finance to its members.
The Pag-IBIG Fund will be issuing P12 billion worth of five-year bonds next month, the proceeds of which would be used to refinance its P7 billion worth of maturing obligations as well as to support its lending operations. -- Louella D. Desiderio