BY RUELLE ALBERT D. CASTRO
[ Malaya.com.ph ] January 18, 2011
By itself, the government cannot meet the current demand for housing, let alone address the backlog which is estimated at close to 4 million units.
Lawyer Darlene Marie B. Berberabe, Home Mutual Development (Pag-IBIG) Fund chief executive officer, said the government housing sector has the capacity of providing 150,000 homes only, against a yearly demand placed by the Housing and Urban Development Coordinating Council at 300,000 to 400,000 units.
"Thus, it is imperative to encourage the private sector, particularly developers, to get involved in providing additional inventory for housing," she said.
Berberabe said Pag-IBIG is continuously looking into ways to better carry out its mandate of mobilizing forced savings and investing these housing.
"We are now reviewing our business model as well as our housing and provident guidelines," she said.
Berbarabe was reacting to a Malaya Business Insight story quoting University of the Philippines professor Toby Melissa C. Monsod as saying the housing mutual fund has failed in fulfilling its mandate.
Monsod said Pag-IBIG, for example, is not able to reach the bottom 20-30 percent of the poor.
She said the reason is Pag-IBIG is extending financing only to those who are capable of paying monthly mortgage payments.
Monsod also said the current business model of Pag-IBIG has been shown to be susceptible to abuse as in the case of Globe Asiatique Realty Holdings Corp.
Berberabe said the charter of Pag-IBIG allows it to service "other working groups," including the informal sector, even if majority of its membership are formal income earners.
"Majority of Pag-IBIG’s membership are formally-employed workers, with a growing portion of this membership (now at around 9 percent) composed of overseas Filipinos registering as members," she said.
"The housing needs of the bottom 20-30 percent of the poor are addressed by other shelter agencies like the National Housing Authority (NHA) and the Social Housing Finance Corp. (SHFC)," she added.
Berberabe said the Globe Asiatique fiasco did not stem from defects in the institutional loan programs but from the company’s breach of the warranties contained in its funding commitment agreement with the mutual fund.
"As a result of the problem with GA, HDMF (Pag-IBIG) is now reviewing the entire system and the program and is looking at how access to loans can be maintained for its members without compromising the speed of processing and the integrity of the Fund," she said.
"The system of enabling developers to pre-process and approve loans was put in place to enable more borrowers to access Pag-IBIG’s housing loan program. It was not meant to provide financing for developers," she added.
Berberabe in an earlier interview with Malaya Business Insight said the new system might be in place this month or the next.
Despite criticisms, Pag-IBIG remains the biggest provider of home financing.
Berberabe said its exposure is more than all other government financing institutions combined and more than the total loan portfolio of banks.
"HDMF still has the most affordable lending program – with the lowest interest rates, the highest loan-to-collateral ratios, and the longest repayment terms compared to banks," she said.
"For the period of January to November 2010, 79 percent of HDMF’s housing loan takeouts were in the P1 million and below packages. Fifty percent of its total loan takeouts were in the P400,000 to P700,000 range, while 13 percent are in the P400,000 and below range," Berberabe said.